Soft power to sales pitch: Are Australian universities losing their appeal?

A generation ago studying in Australia opened doors. Today, rising costs and falling satisfaction are making international students think twice, and locals feel sidelined.

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In the hallway of a marble-floored hotel in downtown Ho Chi Minh City, a series of oversized posters show the smiling faces of Vietnamese professionals, now leading companies in the academic fields they had studied in Australia. A software baron. A banker specialising in mergers. A renewable energy pioneer. A fintech founder. A meat importer-exporter.

Many of the graduates were there, milling about for the first meeting of a new group called the Australian Alumni Business Network. Decades after studying at universities from Sydney to Perth, I saw some of them throwing their arms around each other for photos. I shook hands with another, his eyes bright with excitement, as he caught me reading his poster.

And as we all moved into a conference room — flush with tropical flowers, large LED screens and a booming sound system — it was not hard to hear and feel Australian soft power in the stories of these executive-class alumni.

Many described feeling enormously grateful to Canberra for making Australia’s universities accessible and affordable after the Soviet collapse in 1989 erased opportunities in Moscow or Kyiv. Mostly middle-aged, they usually went with scholarships and left with strong connections.

“We saw a lot of opportunity for ourselves — and to contribute to both countries,” said Phung Van Dong, a successful software entrepreneur, who stood at the podium in the same discount suit he had bought at Birkenhead Point outlet mall in Sydney the day after he submitted his PhD to the University of Technology, Sydney in 2018. “Our mother country, Vietnam, and also Australia.”

Dong’s backstory was familiar. Since I moved from Sydney to Vietnam more than a year ago, I’ve often run across people who studied in Australia and as a proud, newish citizen, I’ve been thrilled by every discovery and the chance to trade impressions.

But as Dong and I spoke after the event, it was hard not to wonder if his positive experience still represented the norm for international students — or whether the power of education to burnish Australia’s image has been endangered by the transformation of many Australian universities into what critics now see as massive, corporatised degree factories.

You can listen to Damian Cave read this story here.

Money, money, money

The sandstone towers of Australian intellectual life have undeniably become global case studies in swollen enrolment. The University of Sydney more than doubled student numbers in a generation, mostly with Chinese arrivals paying hefty fees. Nearly half of the university’s income came from international students in 2022. Education is now a successful export industry worth around $54 billion, as Australians well know. Money, money, money is the chorus oft-repeated, as if revenue from overseas is a gift, a pokies payout that keeps Australians from having to contribute more for the same education they’ve always received.

But is it the same education? Or has the quality of Australia’s university experience been getting worse for years, for students both foreign and domestic?

Professors who see what’s going on often need more than one cup of coffee to unpack what disturbs them. To sum up, the problems they reveal include three-quarters of a class that won’t show up in-person; scores of students who can barely speak English; and the fact that cheating is big business and rampant, soon to be made worse by artificial intelligence.

“The integrity of the entire system is at risk,” a veteran professor at the University of Sydney told me, insisting on anonymity to avoid angering his bosses. “It needs remedial attention.”

The trade-offs that came with expansion, the impacts on quality, the way some universities are run with a ‘business first education second’ ethos that makes teaching feel like an afterthought, alienating students and professors while losing the world’s best and brightest to institutions with better faculty-student ratios and more school spirit — well, unsurprisingly, that has all been difficult for politicians and chancellors to honestly discuss.

But as a reporter and busybody father with two teens who are looking all over for where to go university, I can tell you that evidence for concern is there. Worldwide, the reputation of the average Australian university is declining as others rise in appeal.

Asian universities are improving and expanding. British, Canadian, Dutch and even some American universities cost the same or less for international students, giving them plenty of options. Many of these universities earn higher ratings for social, career and teacher support.

Meanwhile, student satisfaction in Australia has been stuck below the global average for years. More granular survey data of both domestic and international students shows that universities with some of the largest international student cohorts from just one or two countries (Sydney and Melbourne) are at the bottom of national rankings for satisfaction.

Add it all up and an uncomfortable truth starts to coalesce from the data and interviews: At a time of global disruption, when the government has insisted that Australia’s future depends on its regional relationships, universities, the country’s institutional powerhouses of opportunity and global connection, are mired in a crisis of quality and it’s-not-that-bad denial.

Second-rate and too expensive, a lifestyle gem of overpriced mediocrity. That’s how the young strivers of Asia increasingly describe Australia’s universities, and Australia.

For how long are Australians willing to accept such an abysmal grade?

The ‘enshittification’ of the system

The Albanese government has acknowledged problems, especially at a handful of bigger universities, and at the lower end of vocational education, where visa fraud has run rampant.

Julian Hill, the assistant minister for international education, told me Australians should be “very proud that our institutions are globally competitive, highly ranked and really interesting, diverse, complex, multifaceted entities”.

He also said that “there are certainly areas for improvement,” including governance, and a lack of sufficient diversity among international students. In 2024, roughly 73 per cent of international revenue for universities across New South Wales came from three countries, China, India and Vietnam. At six universities, China was the leading source, and at the University of Sydney and UNSW Sydney, nearly 80 per cent of international education income came from Chinese students alone, according to the state’s auditor general.

Federal reforms, so far, include: requiring that universities be more transparent about spending; creating the Australian Tertiary Education Commission, to act as an independent steward; and trying to limit immigration with enrolment caps, higher visa fees, and shorter stays after graduation.

But it’s not clear that any of this will do much to shift enrolment patterns or improve satisfaction and quality anytime soon. Experts and officials say many of the largest universities — with the strongest influence on Australian and global opinion — have been slow to change. And the problems that come with what Hannah Forsyth, a historian of Australian education, has called the “enshittification” of the system, stretch beyond national borders.

What worries some diplomats and scholars is the undermining of Australia’s foreign policy goals, and an enormous missed opportunity for building Australian strength and international influence. Universities, after all, are more than just exporters; they are frontline, multi-year ambassadors, shaping how overseas communities feel about Australia for decades to come.

Lost in the disputes over visas and budgets is the importance of that interaction, the student experience that touches more foreign lives, more deeply than anything that is Australian.

There are at least 160,000 alumni of Australian universities in Vietnam alone. And there’s a pretty clear relationship between time and gratitude. The further back the degree, the greater the appreciation for Australia; the more recent, the more those reviews are mixed at best.

‘Homo academicus’ is endangered

The response to such critiques from university leaders has been pretty consistent, at least since 2017, when I came to Sydney for the New York Times and started paying closer attention to what I hoped would be an alternative for my children to the exorbitant, opaque, hyper-competitive and just generally ridiculous racket of American higher education.

The gist of the argument can be found in the 2026-2027 pre-budget submission from Universities Australia, which represents 38 of Australia’s major universities. Administrators, at length, point the finger at the government for adding too much red-tape and failing to provide enough money for Commonwealth-supported students and capital expenditures. The document declares that universities want more — more funding, international students and more modern buildings. And to bolster the request, there are mentions of markets, competition, de-regulation and innovation along with calls to protect export income and jobs.

Above all, it’s a business case, largely devoid of broader values. Terms like social good, democracy, cohesion, culture, pride, international goodwill or soft power are entirely absent.

Luke Sheehy, the CEO of Universities Australia, stressed that the group participates in other policy forums where such issues “are front and centre.” He said that budgets are about “national priorities, productivity and economic growth, so it makes sense to frame the case for universities in those terms”.

University officials have told me privately that Canberra essentially insisted that universities behave like a business, with less public funding, and is now blaming the sector for problems that model has created. To state the obvious, according to veterans inside the system, the leaders of both major parties and these institutions share responsibility for the status quo.

John Keane, Australia’s renowned political theorist, who I ran into recently at the University of Sydney, described corporatism as a plague for “homo academicus.” With a nudge from the broader culture, a complacent host (ivory tower bureaucracy) embraced a common pathogen (managerial greed).

“‘Neo-liberal’ pressures on scholars are everywhere intensifying,” he said. “Overstaffed and overpaid university managers are fixated on KPIs, global rankings, reputation building among donors, cutting costs, shedding full-time staff, casualising teaching, downgrading research, advancing their own careers, and awarding themselves handsome bonuses.”

Julian Hill has framed it as more of a growth problem. At the Universities Australia Solutions Summit in February, he said the sector’s social license with the Australian public was at risk due to “unchecked expansion”. He defended the government’s cap on international students as “pruning the tree to save the tree”.

In reality, the problems of size and what many see as a misguided focus are intertwined. Australia, even at current numbers, is a bloated anomaly. Its education-as-export approach (try to picture Plato saying that to grasp how weird it is) has created a larger, less diverse “customer base” of foreign students than what exists at global peers.

The contrasts are especially stark at the undergraduate level.

For Oxford University — one of the planet’s most global institutions of higher learning since Queen Victoria — international students make up about 20 per cent of undergraduates. The best-known American universities, big and small, tend to have a similar proportion. New York University sits at the higher end with 27 per cent. Harvard and most of the Ivy League maintain levels below 15 per cent, along with the University of California, Berkeley.

At the University of Sydney, the ratio is roughly twice as high: 38 per cent of undergraduates were international in 2025, according university data. At many schools, such as Monash, popular undergraduate business majors are nearly 90 per cent international.

Even the University of Edinburgh, which has become an international mecca, has a lower share of foreign undergraduates (around 33 per cent), and a broader mix. At Edinburgh, my kids or yours would sit in lecture halls with a majority of Scots and others from the UK, a smaller group of Chinese students, and a bunch of Americans and Canadians squeezing in beside friends from other nations.

At McGill in Montreal last year, 30 per cent of the entire university’s 39,000 students (11,715) were international. Chinese students (2,416) only slightly outnumbered their French (2,139) and American (2,253) classmates.

The scene at Australia’s large research universities is more crowded and less balanced. At Sydney Uni in 2024, more than half of its roughly 75,000 students were foreign, with Chinese students outnumbering all others. The University of Melbourne has reported that around 24,000 of its 53,000 students were international, with more than 15,000 of them coming from China. That puts the Chinese contingent at roughly the size of Yale’s entire student body.

The universities say they are trying to diversify, though in 2022, Melbourne officials acknowledged that China “will likely remain the largest market over the next decade”.

Education Ministry officials have said they would like to see one country represent no more than 50 per cent of total international enrolment. Too many students from China in particular is not the problem, they argue. Too high a concentration of students from any one nation poses economic and cultural challenges.

As Peter Varghese, the chancellor at the University of Queensland has been arguing since at least 2019, tying a third or more of university budgets to one nation puts the entire business model at risk in the case of a diplomatic, health or economic crisis. At the same time, an overabundance of one group undermines cohesion and cultural exchange.

Students of all backgrounds are often unhappy with the result.

On a recent afternoon at the University of New South Wales I noticed a woman in glasses taping up posters for a “sushi and talk” session. Her name was Cheryl Mao, a graduate student in Asian Studies and originally from China. She had just returned from a semester in Japan, where she said there was lasting, meaningful interaction across nationalities.

“I want more of that here,” she said, nodding at the poster.

For many international students, dismay in many forms often follows arrival, especially as fees rise faster than inflation. Nearly 600 university courses now cost international students more than $250,000. And if you do a quick scan of Reddit chats, you’ll see struggle street all over the place — students taking loans at high interest rates; parents selling family homes for tuition payments; students living 10 to a two bedroom apartment and working every chance they get because mum and dad only covered the first semester.

Online, I often saw the same message: “Unless you’ve got rich parents or a scholarship, studying abroad in Australia isn’t the smartest investment,” as one student wrote. For many, what you get in education, connections and career growth, doesn’t match the quality, prestige and cross-cultural interaction offered by other global institutions.

And on campus?

I interviewed students from several countries as classes began at UNSW and Sydney Uni The most satisfied I met were Iman Al Buwaiqi and Walaa Abbad — women in their 30s, getting PhDs in maths and engineering from USyd. Both were fully funded, with scholarships and living costs covered by their governments in Oman and Jordan.

More common were the comments of Heon Lee, who I met outside the International House dorm at UNSW. He was in his third year, a Korean computer science major with floppy hair who had attended a private international high school in Malaysia. He was exactly the kind of student that education ministry officials have called on universities to prioritise.

That’s why universities that actively engage South East Asia will be able to take in more students, expanding enrolment caps. They hail from a part of the world Australia increasingly thinks it needs for future growth and security, and they help schools diversify away from Asia’s population giants of China and India.

But don’t expect to see Heon playing promoter. He described his experience as just ok. The cost-value proposition feels out of whack. The rooms at International House need renovation. The classes are big, he said, with many unmotivated to learn.

“If you have other options, Australia is not exactly worth it,” he told me. With costs going up, he added, “a lot of it just feels unfair.”

After graduation, he said he would pursue his next degree in another country, somewhere more ambitious and less expensive.

At the international school in Ho Chi Minh City that my children attend, I often hear the same.

Soft power damage

In Vietnam, Indonesia and in other countries, alumni from Australian universities can draw on funds from the Department of Foreign Affairs and Trade to stay connected. The event in Saigon with DFAT support was half go-go business conference, half post-pandemic reunion.

“One of the best indicators of quality is outcomes,” said Sheehy at Universities Australia. “Australian university graduates continue to perform exceptionally well here and abroad.”

Fair enough, but that may say more about the past rather than current conditions, and it amounts to a pretty narrow gaze. At the University of Edinburgh, where outcomes are also strong, efforts are underway to shift the perception of international students from “guests” to members who co-create university culture. In Australia, “guest” would be a step up from “overpaying customer” at universities where campus life often slips through the cracks.

When I visited the international student centre at UNSW, the furniture in the ground floor meeting space was in disarray, and no one was there. A plaque celebrating its opening in 1999 by former Prime Minister Paul Keating hinted at a time of more optimism and balance. The university had around 5,500 foreign students that year. In 2024, there were 38,433.

Along the way, annual reports show that student-faculty ratios widened from 16.7:1 to 22.9:1. Top universities like Stanford have about six faculty for every student. Edinburgh’s ratio is about 14:1.

UNSW did not respond to emails seeking comment.

“When it comes to the student experience, there’s no one who’s really responsible for it,” said Susannah Patton, South East Asia program director at the Lowy Institute. “Even though it is a kind of foreign policy issue, DFAT is not responsible for it. The education department would say it’s the universities, it’s state governments — and so it just doesn’t have and has never had that same level of focus.”

Patton was among the first to connect such problems with damage to Australian soft power. In a report from 2022, she warned that especially with the region, too much of a focus on international students as generators of revenue, would lead to Australia “missing opportunities to help build regional human capacity and advance its bilateral relationships.”

The 2024 Universities Accord, a long-term strategic plan developed by universities, acknowledged the existence of this blind spot, noting: “International education is well-recognised as a crucial export industry, but less so as an important element of Australia’s soft diplomacy, reputation and ability to generate relationships across the world.”

Hill agreed that the public discussion is often too weighted toward seeing education in transactional terms. He stressed that giving international students a good experience is in Australia’s long-term interest.

“The soft power benefits are incalculable,” he said, “as are the research links that then get created over lifetimes with other parts of the world.”

What many professors and education experts lament is that the slide in quality — most obvious at the institutions defining Australia’s international brand; less so at regional alternatives — could have been avoided. It didn’t have to go this way. And now, some say, would be a good time to look to the past for help.

Forsyth, who describes herself a historian of capitalism, work and education, told me that when Australia’s internationalisation push for universities started, in the mid to late ‘80s, there was more oversight and balance.

“It was fairly regulated for the first five or six years, maybe a little more,” she said. “There was a cap on the percentage of international students you could have and an indicator of how much you could charge them.”

Many Vietnamese alumni from that era went to Australia with scholarships. And they were not alone. The Colombo Plan paid to educate around 20,000 high-achievers from South and South East Asia from the ’50s through until the ’80s. They were seen as diplomatic assets and mostly received high-levels of institutional support. Many went on to become business leaders or cabinet-level officials in the region’s capitals as their countries developed.

Patton and others have called for a broader Colombo reboot, beyond the scholarships given to Australian undergrads to study in Asia, with more and more varied grant amounts going to international students, and with fewer visa restrictions on what scholarship winners could do after graduation. There’s a competitive logic to this. At the international school my children attend, like others in the region, what students win in scholarships is a mark of major achievement that gets blasted across social media alongside high scores.

More importantly, cultivating and supporting merit as a guiding principle would better align education policy with Australia’s foreign policy, especially in Southeast Asia. In nations of growing confidence seeking respect, it would make clear that Australia sees their countries in terms of human capacity not just as sources of revenue or potential harm.

Critics of the current system argue that even as the government has started cleaning up the shadier corners of higher ed — closing loopholes for vocational visas and shuttering hundreds of providers that essentially pushed workers to illegally pose as students — the political discussion is still too constrained, reduced mostly to intake numbers and visa fraud.

Immigration figures alone are reductive flatteners of humanity. Lost in arguments over the quantity of students and budgets is the quality of one or another’s contribution.

“You definitely have to get down into the data and filter between English language, vocational and higher education,” Patton said. “It’s not comparing like for like — someone who has come here for a few weeks for an English language course and someone who’s come here for a full degree.”

What Australia should be doing, according to educators, is rebalancing, announcing a move away from a mass-education model. Universities should be prioritising experience above all else, competing for high-achievers worldwide and then building stronger relationships by improving teaching, learning and the social life of universities.

For Australian students and their international classmates, the benefits would mutate and spread, yes through economies, but also through nodes of security, diplomacy and culture.

As Forsyth put it: “It’s almost hard to overstate the importance of education as a connector.”

The limits of pruning

In Vietnam, there is still a legacy of goodwill, and good people trying to keep bilateral bonds from fraying. In the course of my usual New York Times reporting, I can’t help but run into Vietnamese and Vietnamese-Australian success stories, graduates who proudly tell me their education led them to excel, including a scientist who’s doing globally groundbreaking work in Hanoi on DNA, a major leader in banking, and an award-winning chef.

But what Australia does next will define whether their experience becomes a historical footnote or a guide to the future.

Weihong Liang, a Chinese PhD candidate in sociology at the University of Sydney, and the president of a new council of international students seeking reform, told me that if Australia doesn’t fix its universities by 2030, foreign students of a high calibre will stop coming. All the country will get are “students who only want working rights”.

No one with deep knowledge of higher education (and that includes Hill, the assistant education minister) believes that pruning Australian universities of immigrants will be enough to make the country’s gardens of democracy, creativity and soft power thrive.

In a report just published by Universities Australia spotlighting the financial pressures facing its members, noting declines in public funding per domestic student over time, there’s no getting away from reality. More money will need to come from somewhere, to improve the student experience, recruit high-achievers and maintain research. And it’s not just money that needs adding. Australia, a rich country with declining productivity, a penchant for secrecy and an occasional inferiority complex, also needs more frank discussion about what’s gone wrong, where, and which audacious ideas might raise excellence and impact.

The government too often works behind the scenes to avoid bashing big universities or giving conservatives ammunition for culture war complaints. The opposition still treats higher education as a place to score nativist points. Australians deserve a less parochial debate that grapples out in the open with bigger questions than who is to blame, universities or politicians, and how many immigrants are coming to a particular campus or city.

What does Australia want to be for upcoming generations, and the world? Does the university experience and cost structure need to dramatically change, for a new age?

Universities define nations. Global thinking. Leadership in civic commitment. Humanistic, holistic education. All of these need backing. In a world where artificial intelligence and zero-sum transactional thinking are shoving us all toward cruelty, isolation or division, what we all need more than ever is a collective embrace of collaboration and higher learning.

If not now, when? If not Australians, who?

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Words: Damian Cave

Illustrations: Kylie Silvester

Editing: Catherine Taylor