Director of Universities UK International (UUKi), Jamie Arrowsmith, has issued an update to the sector regarding various changes due to take place as a result of the government’s immigration white paper, published in May 2025.
UUKi, the sector body representing UK universities’ global interests, has been engaging with officials on the various proposals facing the sector. This includes the government’s ambition to implement an international student levy, shortening the Graduate Route from two years to 18 months, and tightening the Basic Compliance Assessment (BCA) thresholds that universities are held to.
Arrowsmith’s update brought the news that the Home Office has committed to phased implementation of the new BCA thresholds. He also said that the Home Office has also committed to “discretionary exceptions for smaller providers and for institutions that would have passed under current rules”.
The government’s proposal is to raise the minimum pass requirement of each BCA metric by five percentage points, so that a sponsor must maintain a course enrolment rate of at least 95% and a course completion rate of 90% in order to pass the compliance threshold.
However, the change that has most unsettled the sector is the proposal to tighten the visa refusal rate compliance threshold, halving it from 10% to 5%.
Arrowsmith told members that UKVI is now piloting enhanced data sharing to give sponsors more insight into visa refusals – a step UUKi has long called for.
“While this is welcome, we’re clear that further systems and data improvements are needed as a matter of course to support institutions in adjusting to the tighter thresholds,” said Arrowsmith.
The incoming measures also include a traffic-light banding system that rates sponsors on compliance performance, with underperforming institutions facing being placed on a UKVI action plan or a possible recruitment cap.
“We’re also seeking greater clarity on the proposed red-amber-green rating system and will continue to engage through the Education Advisory Group and regular discussions with UKVI and the Home Office,” added Arrowsmith.
A spokesperson for the Home Office told The PIENews: “We strongly value the contribution of international students and recognise their importance to the UK’s world-leading universities. That’s why we’re tightening the rules to ensure those coming here are genuine students and education providers take their responsibilities seriously.”
Communications surrounding curtailing the Graduate Route are “expected imminently”, said Arrowsmith, and UUKi is arguing strongly against the implementation from the January/February 2026 intake, “so that those students are able to access the two-year offer they applied for”.
“We continue to press for written confirmation that PhD graduates will retain three years’ eligibility, and for changes to apply from a set course start date rather than a graduation date, to provide clarity for institutions and applicants,” he continued.
We strongly value the contribution of international students and recognise their importance to the UK’s world-leading universities. That’s why we’re tightening the rules to ensure those coming here are genuine students and education providers take their responsibilities seriously UK Home Office
News from this week’s Labour Party conference has brought some overdue clarity on the proposed levy on universities’ income from international students. Education Secretary Bridget Phillipson confirmed the measure remains on the table, with the revenue earmarked to fund targeted maintenance grants.
The announcement sparked backlash from sector leaders. Some took aim at the government’s assumptions that universities will be able to simply pass the levy onto international students through higher tuition fees, while others argued that it’s unfair to force international students to essentially pay for domestic maintenance grants.
As the government seeks to implement these reforms, most can be enacted through changes to the immigration rules without requiring an act of parliament — the only exception being the levy on international student fees.
According to reports, a brief note issued by the Department of Home Affairs through the Provider Registration and International Student Management System (PRISMS), which oversees international student data, confirms that evidence levels have been updated.
“The September 2025 evidence level update for countries and education providers (based on student visa outcome data from 1 July 2024 to 30 June 2025) has taken place, effective for applications lodged on or after 30 September 2025,” read a statement by the DHA on the PRISMS website.
Consultants and universities in Australia are able to work out these levels through the government’s document checklist tool, which reveals a provider’s risk standing based on the requirements triggered when paired with a student’s country of origin.
Reports suggest that level 1 (lowest risk) includes Bangladesh and Sri Lanka; level 2 (moderate risk) includes India, Bhutan, Vietnam, China, and Nepal; and level 3 (highest risk) includes Fiji, the Philippines, Pakistan, and Colombia.
Although India and Vietnam, both prominent source markets for Australia, improved from level 3 to level 2 on the back of stronger grant rates, China slipped from level 1 to level 2, possibly due to a surge in asylum applications from Chinese nationals, particularly students, as some reports suggest.
While education providers in Australia registered under CRICOS (Commonwealth Register of Institutions and Courses for Overseas Students) are assigned an evidence level, each country is also given one based on its past performance with student visas, particularly visa refusals, asylum applications, and breaches of conditions.
Are there not more Indians applying for protection visas? Hasn’t Nepal followed Sri Lanka and Bangladesh in political turmoil, where the economy has suffered? This has raised concerns around students meeting GS requirements Ravi Lochan Singh, Global Reach
The combination of provider and country levels determines the documents required for an international student’s visa application.
Stakeholders have highlighted the lack of transparency in assessing country risk levels, particularly as students from countries with reduced risk ratings may still arrive in Australia under precarious conditions.
“Are there not more Indians applying for protection visas? Hasn’t Nepal followed Sri Lanka and Bangladesh in political turmoil, where the economy has suffered? This has raised concerns around students meeting GS requirements. There are also whispers that certain operators may encourage students to apply for protection visas,” stated Ravi Lochan Singh, managing director, Global Reach.
Visa prioritisation is already tied to intended caps, with applications processed on a first-in, first-out basis until a provider reaches 80% of its allocation, explained Singh.
With almost all universities now streamlined for visas and the majority promoted from level 2 to level 1, lowest risk, and almost none remaining in level 3, the evidence-level system appears unnecessary to some.
“The concept of ‘streamlining’ (and then the development later of the SSVF) took place at a time where there was a whole-of-government focus on growing international student numbers and increasing the value, while maintaining integrity, of the highly important international education sector,” shared Mike Ferguson, pro vice-chancellor of Charles Sturt University.
According to Ferguson, a former DHA official, “English and financial requirements were streamlined as part of the visa process, based on a risk assessment, given the other safeguards in place – obligations enforced by TEQSA and ASQA in terms of providers ensuring students have sufficient English proficiency and the use of the GTE requirement to consider a student’s holistic economic circumstances.”
However, with international student numbers rising since the early 2010s, “times have changed” and the focus has shifted to managing enrolments and ensuring sustainable growth, explained Ferguson.
“My view is that all students should provide evidence of funds and English with the visa process. That would align with community expectations, support enhanced integrity and potentially help to some degree with some of the course hopping behaviour we are seeing (though the latter requires a range of measures),” he contineud.
“DHA could still determine the degree to which they scrutinise the funds submitted but that would be based on a more holistic and granular risk assessment – not just based on country and provider.”
Evidence levels of select Australian institutions, showing whether they have remained steady, been upgraded, or downgraded, as shared by Ravi Lochan Singh. Correction: Deakin University was previously categorized under risk level 2 (not 1) and has since been upgraded to 1.
Singh further stated that concerns around visa hopping and attrition could be exacerbated, as international students may now enter Australia through universities and then transition to higher-risk, non-university sectors without needing new visa applications, especially since Australia has yet to mandate linking study visas to the institution of initial enrolment, unlike neighbouring New Zealand.
Moreover, Singh pointed out that when students arrive without adequate financial backing, it can increase visa misuse, which may lead authorities to tighten risk classifications again.
“The document checklist tool provides a clear framework for assessing the risk level of a university. However, it raises concerns about the recent trend of promoting the application of visas without financial funds, as suggested by the document checklist tools. While these visas may be approved, this approach could potentially lead to the return of the country to risk level 3 in the future,” stated Singh.
“For instance, if a country’s risk level is 3 (such as Pakistan), and Home Affairs requires financial and English requirements to be attached to the visa application, the university’s risk level is inferred to be 2. If the Home Affairs tool waives this requirement, the risk level is reduced to 1.”
The PIE has requested comment from the DHA and is awaiting a response.
Australia’s reported changes to country evidence levels come just a month after the government announced an additional 25,000 international student places for next year, raising the cap to 295,000.
Hey everyone, quick bit of exciting Re: University news before we get started. Our speakers are beginning to go live on the site here. We’ll be shouting them out on the blog over the next few weeks, so watch this space. Also, a huge thanks to our many dynamic partners and sponsors for making it all happen, check them out here. And of course, thank you to everyone who has already grabbed a ticket, we are already 75% sold out and we are looking forward to having some very interesting conversations with you in January. Anyway, on with the blog…
Question: What policy would increase student preparation for post-secondary education, thus lowering dropouts and average time-to-completion while at the same time lowering per-student delivery costs?
Answer: Introducing (or re-introducing) Grade 13 and move (or return) to make 3-year degrees the norm.
It’s a policy that has so many benefits it’s hard to count them all.
Let’s start with the basic point that older students on the whole are better-prepared students. In North America, we ask students to grow up and make decisions about academics and careers awfully early. In some parts of the world, they deal with this by having students take “gap years” to sort themselves out. In North America we are very Calvinist (not the good kind) about work and study, and think of tie off just to mature and think as “wasteful”, so we drive them from secondary school to university/college as fast as possible.
But there’s no reason that the line between secondary and post-secondary education needs to be where it is today. In antebellum America, the line was in people’s early teens; and age 18 wasn’t an obvious line until after World War II (Martin Luther King Jr. started at Morehead College age 15 because it decided to start taking high school juniors). The Philippines drew the line after 10 years of schooling until about six years ago. Ontario’s elimination of grade 13 was one of the very few examples anywhere in the world of a jurisdiction deciding to roll the age of transition backwards.
But it’s not clear in Ontario – which has now run this experiment for nearly 25 years – that the system is better off if you make students go to post-secondary education at 18 rather than 19. If you give students an extra year to mature, they probably have a better sense of what specific academic subjects actually consist of and how they lead to various careers. Because they have a better sense of what they want to do with their lives, they study with more purpose. They are more engaged. And almost everything we know about students suggests that more engaged students are easier to teach, switch programs less often, and drop out less frequently.
These all seem like good outcomes that we threw away for possibly no good reason.
Students would spend another year at home. Not all of them would enjoy that, but their parents’ pocket-books sure would. They’d also spend one more year in classes of approximately thirty instead of classes of approximately three hundred. Again, this seems like a good thing.
And as for cost, well, the per-student cost of secondary education is significantly lower than that of the per-student cost of post-secondary education. I don’t just mean for families, for whom the cost of secondary school is zero. I also mean for governments who are footing the bill for the post-secondary part of the equation, too (at least this is the case everywhere outside Ontario, which has abysmal levels of per-student spending on public post-secondary education).
There really is only one problem with moving from a 6+6+4 system of education to a 6+7+3 system. It’s not that a three-year degree is inherently bad or inadequate. Quebec has a 6+5+2+3 system and as far as I know no one complains. Hell, most of Europe, and to some extent Manitoba, are on a 6+6+3 system and no one blinks.
No, the problem is space. Add another year of secondary school and you need bigger secondary schools. And no one is likely to want to get into that, particularly when the system is already bursting – in most of the country, particularly in western Canada – from a wave of domestic enrolments. It is possible that some universities and colleges could convert some of their space to house high schools (the University of Winnipeg has quite a nice one in Wesley Hall), but that wouldn’t be a universal solution. Architecture and infrastructure in this case act as a limiting factor on policy change. However, by the early-to-mid 2030s when secondary student and then post-secondary numbers level off or even start to decline again, that excuse will be gone. Why wouldn’t we consider this?
(Technically another potential solution here of is to adopt something like a CEGEP, since these which arguably bridge the gap between secondary and university better that grade 13 did. But the real estate/infrastructure demands of creating a new class of institutions probably make that a non-starter).
Anyways, this is just idle talk. This might be a complete waste of time and money, of course. My suggestions about possible benefits could be totally off. Interestingly, as far as I know, Ontario never did a post-policy implementation review about eliminating grade 13/Ontario Academic Credits. Did we gain or lose as a society? What were the cost implications? Seems like the kind of questions to which you’d want to know the answers (well, I wish I lived in a country that thought these were questions worth answering, anyway). And even if we thought there were benefits to keeping students out of post-secondary for one more year, architectural realities would almost certainly get in the way.
But if we’re genuinely interested in thinking about re-making systems of education, these are the sorts of questions we should be asking. Take nothing for granted.
Some 16,100 international students could be deterred from studying in the UK in the first year universities are levied 6% of all their international student fees, comes the stark warning from a new report from the think tank Public First.
Should the government make good on the proposal – outlined in the immigration white paper earlier this year – this figure could rocket to more than 77,000 students in the first five years of its implementation, the report predicts.
The government expects universities to pass the increased costs onto international students themselves by raising fees. But Public First cautioned that such a move would have catastrophic consequences by driving international students away, hitting the UK’s economy by £2.2 billion over five years and leading to a reduction of 135,000 university places for domestic students.
The think tank projected that a 6.38% international student fee increase – necessary for universities to pass on the entire cost of the levy – would have a far greater impact on students’ decision to study in the UK than the government has anticipated.
This is because the government’s forecasts were based on data for EU students. However, Public First noted that price elasticity of demand for non-EU students is greater than their EU counterparts – meaning they would be more likely to be look elsewhere if they found UK fees too expensive.
Jonathan Simons, partner at Public First and author of the report, noted that the projected impact of the levy “is much more severe than had been predicted previously”.
It is not widely understood just how much our economy is supported by international students and it’s really crucial that any policy that could affect international student numbers is considered through this lens
Jonathan Simons, Public First
“This, of course, will hit our universities, around 40% of whom are already in deficit, and that could lead to a further loss of jobs, a loss of university places for UK students and a loss of vital research investment,” he added.
“Perhaps even more significant, though, is the hit an international student levy could cause to local, regional and national economies across the UK. It is not widely understood just how much our economy is supported by international students and it’s really crucial that any policy that could affect international student numbers is considered through this lens.”
Henri Murison, chief executive of the Northern Powerhouse Partnership and chair of the Growing Together Alliance, said that the levy was opposed by all of England’s major regional employer organisations “because the resulting decline in international students would be hugely damaging to all the regions of the country”.
“The Chancellor should take note of the economic damage of this policy which undermines a critical UK export and we have requested an urgent meeting to raise our concerns,” he said.
The proposed levy has been widely criticised by higher education institutions.
Last month, a HEPI analysis predicted that UK universities could take a £621m hit if the policy goes ahead, with those situated in big metropolitan cities set to be the worst affected.
The notice, published in the Federal Register on September 24, proposes an overhaul of the H-1B visa process to establish a “weighted selection process” favouring “higher skilled and higher paid” workers.
If finalised, the proposal would give greater odds of selection to workers with higher wages, if the number of applicants exceeds the 85,000-limit set by Congress, which has been the case every year for over a decade. The system would replace the current lottery selection process.
The changes – initially put forward for White House review in July – follow a major hike in the H-1B visa fee to $100,000 announced last week, triggering widespread panic among US companies and prospective foreign employees.
Prior to the announcement, employers typically paid between $2,000 to $5,000 for H-1B visa applications, with Trump claiming the increase would put an end to employers “abusing” the system by hiring foreign workers at a “significant discount” in comparison to American workers.
As per yesterday’s proposal, prospective employees would be assigned to four wage bands, with applicants in the top band (level four) placed into the selection pool four times, those in level three entered three times, and so on.
The Department of Homeland Security (DHS) has said the process would “incentivise employers to offer higher wages or higher skilled position to H-1B workers and disincentivise the existing widespread use of the H-1B program to fill lower paid or lower skilled positions”.
The department said it “recognised the value” in maintaining opportunities for lower wage earners and maintained they would not be precluded from the visa, unlike the Trump’s 2021 proposal which “left little or no opportunity” for lower earners.
But critics argue the proposed weighted system will harm US employers’ ability to build international knowledge and fill jobs.
“By favouring more experienced foreign workers and reducing the number of new job entrants, US companies will find themselves struggling to grow,” Intead CEO Ben Waxman told The PIE News.
The plans now face a 30-day public comment period before they are considered by the administration for a final rule, a process that could take several months.
Extensive feedback to government from US businesses on how the proposal would damage US competitiveness is widely expected, with experts also anticipating possible court challenges against the legislation.
Early reports from Bloomberg have suggested the US Chamber of Commerce has begun polling member companies about a potential lawsuit to challenge the $100,000 fee hike.
DHS itself has estimated that 5,200 small businesses currently employing H-1B visa holders would suffer significant damages due to loss of labour.
“There simply are not enough American computer science graduates to support the decades-long record of US innovation and economic growth. That is the wonder of the US tech sector,” said Waxman.
“Why would the US government want to constrain that engine?” he asked.
With analysis by the Chamber of Commerce forecasting a continued decline in the US labour force participation by 2030, advocacy bodies such as IIE have emphasised the importance of international students to fill gaps in labour markets across the country.
There simply are not enough American computer science graduates to support the decades-long record of US innovation and economic growth
Ben Waxman, Intead
The visa, popular with tech companies, enables US employers to temporarily employ foreign workers in “specialty occupations” spanning a wide range of industries from healthcare and teaching to computer science and financial analysis.
Under the current system, there is a statutory annual cap of 85,000 new H-1B visas: 65,00 for regular H-1B visas and 20,000 for individuals with advanced degrees from US institutions known as the master’s cap.
Each year, US employers submit registrations to USCIS for each worker they want to sponsor for a visa. Typically, this number exceeds the cap, in which case, applicants are placed into a random lottery which determines who is awarded a visa.
Since 2012, 60% or more of H-1B workers have held a computer-related job.
Amazon remains the single largest sponsor, with 10,000 out of its total 1.56 million employees holding H-1B visas. Microsoft, Apple and Meta have also expanded foreign hiring through this stream in recent years, according to Newsweek analysis of new federal data.
Commentators have already warned that if the new structure is implemented, the US tech sector will ramp up offshoring facilities and jobs. “Not the outcome anyone in the US wants,” said Waxman.
The visa program has been the subject of much debate in recent months, with Elon Musk, himself once an H-1B worker, coming out in defence of the visa against calls for its abolition from some MAGA hardliners who argued it allowed firms to suppress wages and sidelines American workers.
Denial rates for H-1B visas peaked at 15% during Trump’s first administration due to stricter immigration rules and the tightening of the definition of “specialty occupations”.
India, America’s largest source of international students, is also the top country of origin for H-1B visa holders, with Indian nationals making up 73% of new H-1B approvals in 2023.
China was the second-most common birthplace of H-1B workers, accounting for 12% of skilled workers approved in 2023, while no other birthplace accounted for more than 2% of the total.
During the visit, Al-Benyan met with Australia’s minister of education, Jason Clare, where discussions focused on expanding ties in higher education, scientific research, and innovation, with emphasis on joint university initiatives, including twinning programs and faculty and student exchanges designed to build stronger academic links between the two countries.
The research collaboration was prominently featured on the agenda, with both sides highlighting opportunities in fields such as artificial intelligence, cybersecurity, renewable energy, and health sciences. The minister also discussed investment opportunities in Saudi Arabia’s evolving education sector under Vision 2030, with a view to establishing local branches and research centers.
Australia’s expertise in technical and vocational training was another focal point, as Saudi looks to enhance human capital development and equip its young population with the skills needed to succeed in the future labor market. Both ministers underlined the importance of supporting Saudi students in Australia by strengthening academic pathways and ensuring a welcoming educational and social environment.
As well as his meeting with Clare, Al-Benyan held talks with professor Phil Lambert, a leading Australian authority on curriculum development. Their discussions centered on collaboration with Saudi Arabia’s National Curriculum Centre to develop learning programs that promote critical thinking, creativity, and innovation.
The meeting reviewed best practices in student assessment, teacher training, and professional certification, aligning with global standards. Opportunities for joint research on performance evaluation and digital education methods were also explored with the aim of integrating advanced technologies into classrooms.
Al-Benyan also took part in the Saudi-Australian Business Council meeting in Sydney, where he highlighted investment opportunities in the Kindgdom’s education sector in line with Vision 2030.
Education is a key pillar globally and a central focus of Saudi Arabia’s Vision 2030, which aims to create a world class education system that nurtures innovation and drives future ready skills Sam Jamsheedi, president and chairman of the Australian Saudi Business Forum
Conversations covered the launching of scholarship and exchange programs, advancing educational infrastructure and technologies, and promoting joint research in priority fields such as health, energy, and artificial intelligence, underscoring the importance of developing programs to enhance academic qualifications and support initiatives for persons with disabilities, while reaffirming Saudi Arabia’s commitment to supporting investors through regulatory incentives and strategic backing.
“It was a pleasure to welcome the Minister of Education, His Excellency Yousef Al Benyan, as part of the official Ministry of Education, Saudi Arabia delegation from the Kingdom of Saudi Arabia to Australia,” said Sam Jamsheedi, president and chairman of the Australian Saudi Business Forum.
“Education is a key pillar globally and a central focus of Saudi Arabia’s Vision 2030, which aims to create a world class education system that nurtures innovation and drives future ready skills.”
“Our Council was proud to host a roundtable with leading Australian universities and training providers, giving Ministerial attendees first hand insights into Australia’s capabilities across higher education, vocational training, and research collaboration.”
“Australian education already has a strong presence in the Kingdom, with a growing number of partnerships across early childhood education, schooling, technical training & university programs,” he added.
It’s been about eighteen months since this podcast last visited Australia. The story at the time was about something called “the Universities Accord”, an oddly-named expert panel report which was supposed to give the Labor government a roadmap for re-structuring a higher education system widely believed to be under enormous stress.
Since then, lots has happened. There’s been an international student visa controversy, a whole ton of cutbacks at institutions (including a quite wild polycrisis at Australian National Universities) and a general election which saw the Labor Party unexpectedly returned to power with an increased majority.
So, what’s on the agenda now? To answer that question, we called up long-time podcast friend Andrew Norton, currently Research Fellow at the Centre for Independent Studies, and Policy and Government Relations Adviser at the University of Melbourne, and as usual he’s here to give us the straight dope down under. Our discussion ranges pretty widely over developments in the last 18 months: to me the most interesting question is why the government has been so slow to move on key aspects of the Universities Accord. Andrew’s answer to that question is, I think, pretty revealing, and should resonate both in Canada and the UK – quite simply, left-wing governments aren’t as different from right-wing ones as you might think when it comes to delivering change in higher education.
The World of Higher Education Podcast Episode 4.2 | Higher Ed at the Ballot Box: Australia’s Election and the Accord with Andrew Norton
Transcript
Alex Usher: Andrew, welcome back. Last time we talked was about 18 months ago, and the Universities Accord report had just dropped. There were a whole bunch of recommendations about funding, job-ready graduates, access, system regulation, and even something odd about a national regional university. Labor had about a year and a half between the time the report came out and the election this past May. What did they do with that time? What aspects did they move on most quickly?
Andrew Norton: It was a bit of an odds-and-ends approach. The big, expensive changes to the way students and institutions are funded have really been postponed. But they’ve done a range of things.
They’ve introduced a national student ombudsman—the first national complaints organization for students. They’ve created a new system for funding people in preparatory courses. They’ve increased regulations on universities to support students who are struggling or at risk of failing.
Mostly, they’ve done things aimed at helping students, while the big structural work is still to come.
Alex Usher: So, they did the cheap stuff?
Andrew Norton: Essentially. They did the things that were cheap for the government but shifted costs onto the universities.
Alex Usher: And with the other elements, did they say no to any of them? Or did they just leave it quiet—maybe we’ll do it, maybe we won’t?
Andrew Norton: The thing they’re attracting the most criticism for is the Job-Ready Graduate student contribution. Back in 2021, the previous government radically redesigned how students pay for their education. The idea was to encourage people into courses the government wanted, like teaching or nursing, by discounting student fees, and to discourage others by raising fees in areas the government regarded as “not job-ready,” like humanities and social sciences.
The Accord’s final report said the system should change—go back to something closer to what we had before, where there’s a rough relationship between fees and likely future earnings. But the government has deferred this to the Australian Tertiary Education Commission (ATEC), which currently exists as a website but doesn’t yet have legislation. That legislation will probably come early next year.
So, the earliest possible date for changes is 2027, and quite possibly later. The government is getting a lot of criticism because, while fees were being increased, they said it was a bad thing and that they’d fix it. Yet first they sent it off to the Accord review, then to ATEC, and now who knows when it will actually happen.
Alex Usher: So, there’s a lot of kicking the can down the road at a time when institutions are having financial trouble?
Andrew Norton: That’s true. A lot of institutions are reducing staff and cutting courses. Exactly why varies—some are still struggling with international student numbers, some with domestic enrolment. But the key problem is that costs are rising faster than revenues.
They’ve signed wage deals that are well above inflation, while government grants are only indexed to inflation. So they’re in a situation where they have to control costs, and staff numbers and courses are one of the few levers they have left.
Alex Usher: You mentioned international students. One of the things we noticed here in Canada—because we went through the same thing a few months before you—was this whole notion of international student caps. The idea was similar: there was a perception, I’m not sure how true it was, that international students were affecting the housing market. Both Labor and the opposition supported caps; they just disagreed on how severe they should be. What actually happened on that front? Are there caps, and how are they regulated?
Andrew Norton: I think the answer is: sort of.
The background is that in the second half of 2023, the government started to believe that international student numbers were contributing to housing shortages and rising rents. Many in the sector agree there’s some truth to that. If you add up all the students, ex-students on temporary graduate visas, and people on bridging visas—often students waiting on another visa—you’re probably looking at around a million people in a population of about 27 million. It’s hard to argue that it has no impact on the housing market.
The government introduced a range of migration measures: making visas more expensive and making it harder to get a student visa in the first place. But this wasn’t really affecting Chinese students, who remain the largest single group in Australia. So in May last year, they introduced legislation that would have put formal caps on the number of students each university and education provider could take. Everyone thought this was certain to pass, since the opposition also supported caps.
But in a big surprise last November, the opposition changed course and didn’t support the bill. Combined with the Greens’ opposition, it couldn’t get through the Senate and didn’t become law.
Instead, the government recycled the caps idea at the “national planning” level. The main feature was that once an institution hit 80% of its allocated number, further visa applications would go into a “go-slow” lane. The implied threat was that if an institution went over in future, there could be penalties. But so far, that hasn’t happened.
So now we’re essentially back to a migration-driven set of restrictions on international numbers.
Alex Usher: Before we get to the election, there was an interesting article—I think it was in Times Higher—about the idea that universities had nobody in their corner going into the election, that they’d lost some of the social license they once had.
Part of it was about the very large vice-chancellors’ salary packages, which have been an issue for a long time—many presidents earning over a million dollars. But there have also been persistent stories about wage theft, with universities systematically underpaying employees. Then there are the narratives about “management gone mad” and cuts—particularly at the Australian National University.
Is it true? Are universities more friendless in Australia than they used to be? Or is there something different this time?
Andrew Norton: I think there is something different this time. It’s not just that there have been a lot of issues.
On wage theft—as the union calls it—this has mostly resulted from universities relying heavily on casual or sessional employees. Payroll systems are complex, with different rates for different activities. It is genuinely hard to get right, but it seems almost every university has failed to align payroll systems with how people are actually employed.
As a result, about half the institutions have had to repay staff or correct wages they didn’t pay the first time. Roughly half a dozen universities are now facing high-level enforcement by workplace authorities, putting them in the same category as traditional rogue employers like those in retail.
The optics are terrible: people on very low wages aren’t being paid correctly, while vice-chancellors are earning over a million dollars a year. That contrast doesn’t look good.
The real big change, though, is political. The Liberal Party opposition has long been skeptical of universities, but what shocked institutions was that the governing Labor Party took the Accord review and, if anything, has been even harsher with universities than the previous government.
That’s why universities are reeling. They expected that after the change of government in 2022, life would get easier. It certainly hasn’t.
Alex Usher: Let’s talk about the election. Your election was only about a week after ours in Canada, and it seemed like a very similar story: a weak center-left government on course to be crushed by a right-wing party. But then that right-wing party suddenly didn’t seem so cuddly once Trump had been in office for two or three months. I think the difference, though, is that higher education actually played some role in the Australian election. What promises did the different parties make?
Andrew Norton: That was quite unusual. Higher education usually isn’t an election issue in Australia. But this time Labor picked up on discontent over student debt in its first term.
The issue was that we index student debt to inflation. And like in many other countries, there was a post-COVID inflationary period. At one point, indexation was around 7% in a single year.
I think that triggered what I’d call a latent issue. Over the 2010s, there was a big increase in student numbers and, correspondingly, in debt. We ended up with about 3 million people holding student debt, totaling over 80 billion Australian dollars. That’s a very large constituency. Labor realized that while this hurt them in their first term, maybe they could turn it into a positive.
They did something similar to what’s been discussed in the U.S.—or in some cases done in the U.S.—which was to promise cutting all debts by 20%. They announced this in November last year. During the campaign they didn’t push it hard until the final week, when they really started to focus on it.
There was a late surge in support for the government, which gave them a very large majority. My theory is that the 20% cut—which was worth more than $5,000 to the average person with student debt—was enough to swing people over the line and deliver Labor its big win.
Alex Usher: What I found odd about this is that debt doesn’t actually affect your payments in Australia, because you’ve got one of the purest and original income-contingent systems in the world. Cutting debt by $5,000 only reduces the length of time you’ll be paying—for example, my debt is paid off in 2050 instead of 2055. I’m amazed that would move the needle so much, because next year what everybody pays is still a function of their income, not the size of their debt. So how did that work?
Andrew Norton: I think it’s because the debt issue had become so salient in people’s minds. The strange thing is that, at the same time, Labor also promised to change the repayment system in ways that would actually reduce how much people repay this year, under laws already operating now. But that got almost no airtime.
When journalists called me, I’d ask, “Do you want me to talk about this too?” And they’d say, “What’s that?” There was zero recognition. It just wasn’t being highlighted.
One reason might be that the repayment change isn’t straightforward. While the average person will repay less, everyone will now face a marginal repayment rate of 47%—that’s including income tax plus the 15% of income they have to repay once they’re over $67,000 Australian.
As this comes into operation, I think there could be political problems. But during the campaign, the overwhelming focus—99%—was simply on the debt cut.
Alex Usher: Let’s be clear about that, because it’s interesting. Australia has always had an income-contingent system where, if you were below a threshold, you paid nothing. But as soon as you went over that threshold, you paid a percentage of your total income, not just the marginal income above the threshold.
Andrew Norton: The change is that it’s now a marginal system. And the threshold for starting repayment has moved from $56,000 Australian to $67,000. So a whole lot of people are now out of the repayment system as a result.
But there’s a downside: more people will see their debt keep rising through indexation, because they’re not making repayments—or their repayments are smaller than the amount added by indexation. I think that’s going to be a problem.
Alex Usher: What’s the marginal rate above that?
Andrew Norton: It’s 15% above $67,000, and then it goes up to 17% at $125,000 a year. Those are high numbers. Once you set a high threshold, you’ve got to set high repayment rates to bring in a reasonable amount of revenue for the government.
Alex Usher: Now that Labor has been reelected, what do you think their agenda looks like for the next three years? Which parts of the Universities Accord that they passed on last year are they actually going to move on? You’ve mentioned the Job-Ready Graduate program and the regulator. Anything else?
Andrew Norton: One thing they’ve already done, consistent with some of their earlier moves, is new legislation on what they call gender-based violence. That’s going to be quite complex regulation for the sector to manage.
The big issue ahead is how they’ll distribute student places in the future. Their general mantra is “managed growth.” What they’re aiming for is a system with much more government control over the number of student places at each university, and likely also more control over which courses those places are allocated to.
At the moment, universities have a maximum grant, but aside from niche areas like medicine, there’s effectively no control over how those places are distributed internally. And even though universities eventually use up all their public funding, they can still enroll more students if they’re willing to accept only the student contribution. Some universities have been quite happy to do that.
Alex Usher: Similar to what we have in Ontario.
Andrew Norton: Exactly. The universities that are currently what we call “over-enrolled”—taking more students than they’re being fully funded for—are feeling vulnerable. Some of them will find this shift very difficult to manage.
Alex Usher: So, the government wants to control domestic student numbers through this mechanism, and they’re effectively going to do something similar for international students through a system of caps, perhaps. Are they going to move on caps again, and will it be in line with this whole notion of managed growth?
Andrew Norton: I think so, yes. The Australian Tertiary Education Commission has said it will regulate international student numbers in the future—at least in the university sector. Presumably there will be some coordination between the domestic and international totals.
In the past, there’s been discussion of saying international students should make up no more than a certain percentage of total enrollments. Some universities already do this voluntarily, so I wouldn’t be surprised if a maximum percentage is formally set.
Alex Usher: It’s interesting you mention growth, because we’ve just been talking about how difficult it is for universities to balance their budgets. If there’s no new money—either from domestic sources or international students—how are they going to grow? I just saw, I think it was today, that the University of Melbourne is giving up on building a second campus.
Andrew Norton: That’s partly due to problems with the particular site they had chosen.
To backtrack a little—when they say “managed growth,” that doesn’t necessarily mean actual growth. They used the same phrase for international students even when the goal was clearly to reduce numbers. So in that case, it was really managed degrowth rather than growth.
What they do want in the long run, as recommended in the Accord, is for a higher percentage of people—particularly from disadvantaged backgrounds—to acquire a university degree. That’s the growth they want to achieve.
The challenge is the student market. The school-leaver market, in my analysis, is probably recovering after being flatter than usual. Universities that rely on school leavers are likely the ones that have managed to over-enroll.
But the mature-age market is in a long slump, apart from a brief spike during COVID. I don’t think that market will fully recover, because many in that cohort have already earned their bachelor’s degrees at a younger age and aren’t returning in the same numbers as before.
Alex Usher: With all these restrictions—fewer international students, slumping domestic enrollments, and declining government funding—what do you think the system looks like five years from now? By 2030, is this a sector that’s found its mojo again, or are we looking at long-term decline?
Andrew Norton: I don’t think it’s as bad as it looks in some other countries, where demographics are worse than in Australia. But I do think the 2020s will continue to be a difficult period.
We’ve been talking about potential structural changes in the labor market and the impact of AI, which could devalue a degree. That could cause shocks in the system we haven’t yet seen.
Higher education has survived numerous ups and downs in the labor market over the decades. Usually, any drop-offs are short-term, and then growth returns. But maybe this time is different—I’m not sure. Right now, we’re not seeing huge effects of AI in either international or domestic enrollment numbers. But it’s definitely possible that, once we start seeing negative labor market signals—like new graduates struggling to find work—that could hit demand.
Alex Usher: Andrew, thanks for joining us on the show.
Andrew Norton: Thanks, Alex.
Alex Usher: And thanks as always to our excellent producers, Sam Pufek and Tiffany MacLennan, and to you—our listeners and readers—for joining us. If you have any questions or comments about today’s episode, or suggestions for future ones, please don’t hesitate to get in touch at [email protected].
Join us next week when Marcelo Rabossi from the Universidad Torcuato Di Tella returns to talk about new developments in Argentina’s university financial crisis, and the showdown between Congress and President Javier Milei over a new higher education law. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service.Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
International students are placing getting a quality education over policy developments – with the UK keeping its spot as the preferred desitnation for 80% of nearly 1,000 pathway students surveyed by NCUK.
A new report covering the survey’s findings analyses data from 921 students across 88 countries studying an international foundation year or Master’s preparatino programs, looking at their motivations for studying in top destinations, as well as other preferences.
It found that Australia was the second most popular choice, with 4% of students surveyed marking it as their preference, followed by Canada, the US, New Zealand and Ireland at 3%. Meanwhile, the most coveted programs are business and computer science, as the preferred subjects for just under a third (31%) of respondents.
Students’ continued preference for the UK comes in spite of a slew of policy changes affecting international students. In May, the government unveiled its long-awaited immigration white paper, setting out the way Keir Starmer’s Labour party intends to tackle migration over the coming years.
It included plans to reduce the Graduate Route by six months to a total of 18 months, as well as new compliance metrics that higher education institutions must in order to continue recrutiing international students. Tougher Basic Compliance Assessment (BCA) requirements are set to take effect this month, meaning that universities will face penalties if more than 5% of their students’ visas are rejected, down from 10%.
And last September, the UK increased international student maintenance requirements for the first time since 2020. Under the new rules, students coming to London must show evidence of having £1,483 per month, while studying outside of London need proof that they have at least £1,136 per month.
But NCUK’s chief marketing officer Andy Howells pointed out that students are looking beyond arbitrary political decision when choosing their preferred study destination, thinking instead about their long-term prospects.
“This research demonstrates that international students are sophisticated decision-makers who look beyond political headlines to focus on educational quality and career outcomes,” he said. “While policy changes generate significant discussion in our sector, students are primarily motivated by the academic excellence and opportunities that institutions can provide.”
The survey found that, of a sample size of 646 students, just 12% who said they were considering studying in the UK said that financial requiremwnr increases would stop them from applying to UK instiutuons.
However, the popularity of other major study destinations were ore impacted by political headwinds, the survey found.
Over a third (36%) interested in applying the Australian institutions said that proposed international enrolment caps would affect their decision, while 26% of those looking to study in Canada said they would no longer apply to Canadian institutions over policy changes – particularly changes to the country’s postgraduate work permit scheme.
And almost four in 10 (38%) considering the US said Donald Trump’s second presidency would negatively impact their choice to study in America.
For the majority of students surveyed (69.9%), education quality is the primary driver leading them to seek study abroad opportunities, closely followed by enhanced career development opportunities (56.4%) and gaining new knowledge (55.2%).
The survey also shone a light on students’ post-graduation plans. Half of respondents said they wanted to stay in their study destination, with 31% planning to work and 19% looking at further studies.
This research demonstrates that international students are sophisticated decision-makers who look beyond political headlines to focus on educational quality and career outcomes Andy Howells, NCUK
But a growing number of students plan to return to their hoe country immediately after graduating, with 23% saying they want to do this – up from 18% in last year’s survey.
Immigration has continued to be a hot topic in the UK as the anti-immigration Reform party grows in popularity.
Just earlier this week, Home Secretary Yvette Cooper drew ire from the international education sector after announcing that the government will be tougher on overseas students who make asylum claims that “lack merit” as a means to stay in the country after their visa expires.
Some 10,000 students have already been texted and emailed warning them that they will not be allowed to stay in the UK if they have no legal right to remain and explicitly warning them against making bogus asylum claims.
Earlier this month, China’s State Council amended the Regulations on the Administration of the Entry and Exit of Foreigners, highlighting the growing importance of its global talent strategy.
Effective from October 1, the visa, which will be subject to approval by the authorities of the People’s Republic of China, will be open to international youths who have earned undergraduate or STEM degrees from leading domestic and global research institutions.
The visa will also be open to young international professionals engaged in education and research in STEM fields.
As per reports, compared with ordinary visa categories in China, the K visa is designed to provide greater convenience for holders through multiple entries, longer validity, and extended stay durations.
We see it as a powerful signal that China is not only open for business but is actively and competitively seeking to attract the world’s best and brightest minds Charles Sun, China Education International
It will also create opportunities for exchanges and collaboration across education, science, technology, culture, business, and entrepreneurship with applications no longer needing sponsorship from a local enterprise, relying instead on the applicant’s age, educational background, and work experience.
“We see it as a powerful signal that China is not only open for business but is actively and competitively seeking to attract the world’s best and brightest minds,” Charles Sun, founder and managing director of China Education International, told The PIE News.
“A key attractive feature is the inclusion of provisions for spouses and children. Making it easier for families to relocate together is perhaps one of the most important factors in convincing top-tier talent to make a long-term commitment to a new country.”
According to data from Studyportals, this move comes at a time when interest in pursuing Artificial Intelligence degrees in the US is declining, while interest in studying the same in China is on the rise.
“When comparing January to July 2025 to the same period in 2024, relative demand for artificial intelligence degrees (on-campus Bachelor’s and Master’s and PhDs) in the US on Studyportals dropped 25% year-over-year, while interest in AI degrees in China rose 88%,” read a report shared by Studyportals.
“Both Beijing and Washington are racing to secure technological leadership in the ‘Race on AI’. According to Harvey Nash “Digital Leadership Report 2025” artificial intelligence has created the world’s biggest and fastest-developing tech skills shortage in over 15 years. This shortage has created a race for talent, with companies like Meta reportedly handing out $100m sign-on bonuses to win top talent.”
While interest in pursuing such degrees in China is growing amid its global talent push, the US remains a powerhouse in the field.
International students account for 70% of all full-time graduate enrolments in AI-related programs and make up more than half of all international students in the country enrolled in STEM disciplines.
“Nations that succeed in drawing the brightest minds and in creating an environment for innovative business to thrive, will not just advance their economies, they will command the future of technology, security, and influence,” stated Edwin Rest, CEO of Studyportals.
“International students do not only bring revenue to local economies and soft power, they also fuel innovation, startups, and job creation.”
Welcome back to our fourth season. Time Flies. We’ve gone back to an audio only format ’cause apparently y’all are audio and bibliophiles and not videophiles, so we decided to chuck the extra editing burden. Other than that, though, it’s the same show. Bring you stories on higher education from all around the world. So, let’s get to it.
Today’s guest is Pedro Teixeira. He’s a higher education scholar from the University of Porto in Portugal, focusing to a large extent on the economics of education, but he also just finished a term as that country’s Secretary of State for higher education. That’s a position closer to a junior minister rather than a deputy minister, but it has elements of both.
I first met Pedro about 20 years ago, and I ran into him again this summer in Boston at the Center for International Higher Education’s biannual shindig, where he was giving the Philip Altbach lecture. And let me tell you, this was the best lecture I have listened to in a long time.
Two reasons for this. First, Pedro spoke about his experiences as a Secretary of State trying to negotiate a new funding formula with universities in that country. I won’t spoil the details, but one big highlight for me was that he was in the rare position of being a politician, trying to convince universities not to have a performance-based element in their funding formula. And second, he talked about the future of higher education in the face of possible falling returns to education due to wider adoption of artificial intelligence.
It was such a good talk, I knew my World of Higher Education podcast listeners would think it was great too. And while I couldn’t record it, I did do the next best thing. I invited Pedro to be our lead off guest for this season’s podcast. Let’s listen to what he has to say.
The World of Higher Education Podcast Episode 4.1 | From Funding Formulas to AI: Pedro Teixeira on Higher Education’s Next Challenges
Transcript
Alex Usher: Okay, so Pedro, you were an academic at CIPES (Centre of Research on Higher Education Policy) at the University of Porto, and you went from that to being a minister of state. That’s not an unfamiliar path in Portuguese higher education—Alberto Amal, I think, did something similar. But that move from academia to government, how big a shift was that? What did you learn, and what were you not expecting when becoming a minister of state?
Pedro Teixeira: I think you’re right in the sense that there are quite a few people who have done this, not only in Portugal but also in other parts of Europe, in different areas. And I think it’s always a bit of a challenge, because there’s this expectation that, since you’re an academic—and especially if you’re an expert on the topic—people expect you to have a solution for all the problems. And it’s not exactly like that.
At the same time, I think one is worried that what you do in office will be coherent with what you had advocated as an academic and with what you had written about specific topics. That’s challenging.
In some respects, I wasn’t very surprised by what I faced, because I had been involved in advisory roles and I knew people who had been in that kind of policy role. So I think I wasn’t—I mean, there were the things you expect, like the amount of work and the long days. But I never felt that was really the most difficult part. Of course, going through these things and living them is a little different than knowing them in the abstract.
But I think the main concern for me was the permanent pressures. You are always concerned with something, always worried either about the problems you have to deal with or the problems that will emerge.
What I was not so happy with was the lack of a sense of urgency in some of the actors, both on the government side and on the side of stakeholders in the sector. Because if you feel the problems are significant, you need to move forward—of course not rushing, but you do need to move forward.
On the positive side, I think the quality and dedication of staff was very important. Civil service is often criticized, but I found that very important. And the other thing that was also very important was the role of data and evidence, while at the same time you also need to develop arguments and persuade people about the points you’re trying to make.
Alex Usher: So what were those urgent issues? I know one of the big things you dealt with was a funding formula—and we’ll come to that later—but what, to your mind, were the other big urgent issues in Portuguese higher education at that time?
Pedro Teixeira: As we know, most people in their higher education system always think their system is very specific, very different from everyone else. But in fact, we know there are a lot of commonalities across education sectors.
In many ways, the challenges were the same ones that people describe as belonging to mass systems, or what others might call mature systems. One significant issue, of course, was the adverse demographic trends.
Another was the tension between, on the one hand, wanting to broaden access and enhance equity in the system, and on the other, facing enormous pressures toward stratification and elitism, with the system tending to reproduce socioeconomic inequalities.
There were also issues related to diversity versus isomorphism. On the one hand, people agree that in order for a mass system to function, it needs to be diverse. But there are pressures in the system that tend to push institutions toward mimicking or emulating the more prestigious ones.
The balance between missions is another challenge. This relates to that issue of isomorphism, because research has become so dominant in defining what higher education institutions do and how they see their mission.
And, of course, there were issues of cost and relevance: who should pay for higher education, and how can we persuade society to put more resources into a sector that, because it is a mass system, is already absorbing a significant amount of public funding?
Alex Usher: All right. On that point about demographics, I saw a story in one of the Portuguese newspapers this week saying that applications were down 15% this year. Is that a rapidly evolving situation? That seems like a lot.
Pedro Teixeira: No. There’s been a downward trend over the last three or four years, but because the number of applicants was bigger than the number of places, it didn’t disturb things much. Most of what we’re seeing now is actually due to the fact that in 2020, with the pandemic, exams for the conclusion of secondary education were suspended.
They were only reintroduced this year. That decision was taken at the end—actually by the government I was part of—at the beginning of 2023. But in order to give students and schools time to adjust, the change only applied to the students who were starting secondary education then. Those are the students who applied this year for higher education.
Basically, when you look at the data—we don’t yet have the numbers on how many graduated from secondary education—but the number of applicants is very much in line with what we had in 2019, which was the last year we had exams for the conclusion of secondary education.
And in fact, if you take into account the declining trend of the last three or four years, I would say it’s not a bad result. It actually means the system managed to compensate for those losses.
Alex Usher: Managed to absorb.
Pedro Teixeira: Yeah, yeah. But it’s also a signal for the sector in that respect.
Alex Usher: So let’s go back to the funding formula issue, because I know that was a big part of your tenure as Secretary of State for Higher Education. What was wrong with the old formula, and what did you hope to achieve with a new one?
Pedro Teixeira: There are two things. I think there were some issues with the old formula. It was designed in 2006, so 15 years had passed. The sector was very different by then—the situation, the challenges, everything had changed.
Also, like many formulas of that time, it was quite complicated, with many indicators and many categories for fields of study. That didn’t make the system very transparent. If you introduce too many indicators and variables, in many ways the message you want to convey is lost. A funding formula is supposed to be an instrument to steer the system.
But the larger problem was that this old formula hadn’t been applied for the last 12 years. When the Great Recession started around 2005–2010, the government suspended its application. Since then, the budgets of all institutions have evolved in the same way—same amount, same direction—regardless of their number of students or their performance.
So when we came into government in 2022, the situation was, in many cases, very unbalanced. Some institutions that had grown significantly didn’t have funding to match that growth. Others that had declined hadn’t seen any adjustments either.
The idea of having a new formula was preceded by an OECD review commissioned by the previous government, which we took over. Our idea was to design a simpler and more transparent formula that would form part of the funding system. In addition to the formula, we introduced funding contracts, focused mainly on institutions located in more peripheral regions of the country.
The idea was also to have a four-year period of gradual implementation of the new model and funding system. At the same time, this would correct some of the imbalances caused by not having applied any formula for 12 years.
Alex Usher: And how did institutions respond to those proposals? Were they on your side? Were there things they liked, and things they didn’t like? Universities don’t like change, after all.
Pedro Teixeira: On the other hand, I think a significant part of the sector was very keen to finally have some kind of formula—some set of rules that would be applied to the whole sector. Of course, some institutions were afraid that by reintroducing a formula, given their recent evolution, they might end up on the losing side.
But one of the key aspects of the process was that this was always seen as a formula, or a new system, that would be introduced within a pattern of growth in funding for the sector—not as a way of redistributing funds from some institutions to others. That made the process easier. It would have been much more difficult if we had been taking money from some institutions to give to others.
This required political commitment from the government, and it was very important to have the backing of the Prime Minister and the Minister of Finance. That meant we could correct imbalances without creating disruption for institutions.
I would say the main critical points were, first, the differentiation between sectors. We have a diverse education system with universities and vocational institutions. Then there was the question of whether to differentiate between regions. Our decision was to have a formula that applied in the same way to all regions, and then use funding contracts as additional resources targeted for strategic purposes—mainly for institutions located in more deprived or less populated regions.
Another point raised in discussions was fields of study. Everyone wants their own fields—or the ones in which they are strongest—to be better funded. But we really wanted to simplify the mechanism, and I think that helped.
Finally, there was the issue of performance indicators. We didn’t propose to introduce them from the start. Because we had gone so many years without a formula, we didn’t have consistent data, and moreover we wanted performance indicators to be developed collaboratively with institutions. The idea was that institutions themselves would decide which areas they wanted to focus on, which areas they wanted to contribute to, and therefore which indicators they wanted to be assessed by.
Because we decided that performance indicators would come in a second step, some institutions wanted them introduced earlier. That was also a point of discussion.
Alex Usher: I find that fascinating, because I don’t think I’ve ever heard of universities—maybe “demanding” is the wrong word—but being disappointed that there wasn’t enough performance-based funding in a system. Why do you think that was?
Pedro Teixeira: I’m not sure I was surprised, but it was significant that some institutions were pressing for it. In some ways, it could have been a strategic approach by certain institutions because they thought they would be on the winning side.
But I think it also has to do with the fact that this competitive, performance ethos has so deeply permeated higher education. At some point, I even said to some institutions: be careful what you wish for. Because in some cases, this could curtail your autonomy and increase the possibility of government interference in your ability to devise your own strategy.
Actually, I think that was, in many ways, the only real public criticism that came up. And that was quite interesting, to say the least.
Alex Usher: I want to shift the ground a little bit from Portugal to Boston. Two months ago, you gave the Philip B. Altbach Lecture at Boston College’s Center for International Higher Education. You devoted a lot of your talk to artificial intelligence and how it’s likely to change higher education. Could you tell us a little bit about your views on this?
Pedro Teixeira: That’s a fascinating topic. Of course, it’s an important issue for many people around the world and for many education institutions.
It’s fascinating because, to a certain extent, we’ve been nurtured by a view that has dominated over the last decades—that progress has been skill-biased. In previous waves of technological progress, the labor market tended to favor those with higher skills. Education was often seen as contributing to that, helping people be on the winning side, and the returns to more education and more skills seemed to confirm it.
My concern is that this wave may be slightly different. I’m not saying it will destroy a lot of jobs, but I am concerned that it may affect skilled and experienced workers in ways that previous waves did not.
We’ve already seen, and many of us have already experienced in our own jobs, that AI is performing certain tasks we no longer have to do. It’s also changing the way we perform other tasks, because it works as a collaborative tool.
So I think there is a serious possibility that AI—especially generative AI—will change the tasks associated with many jobs that today require a higher education degree. We need to pay attention to that and respond to it.
I worry that because education has been such a success story over the last half-century in many countries, there is a degree of complacency. People take a relaxed attitude, saying: “We’ve seen previous changes, and we didn’t experience so many problems, so we’ll be fine this time as well.”
I think there are quite a few aspects we need to change in our approach.
Alex Usher: And what might those areas be? Because I have to say, whenever I hear people discussing AI and radical change in the labor market, I think: that’s the stuff that’s actually hardest for higher education to deal with—or for any kind of education to deal with.
Education is often about teaching a corpus of knowledge, and there is no corpus of knowledge about AI. We’re all flailing blindly here—it’s totally new.
I think a lot about James Bessen and his book Learning by Doing. He was talking about how education worked during the Industrial Revolution in Manchester, and in other parts of England that were industrializing. Basically, when there’s a totally new technology, who are you going to get to teach new people? There’s no settled corpus of knowledge about it.
What do you think higher education institutions should be doing in that context?
Pedro Teixeira: One of the major concerns I have is that we tend to focus so much on the impact of digitalization and technology on science and technology fields. But we should be much more attentive to how it’s changing non-technical fields—health professions, the humanities, and the social sciences. These make up a very large part of higher education, and a very large part of the qualified workforce in many of our countries.
I think there are several things we need to do. The first is to rethink the balance between the different missions of higher education. At the moment, so much of the pressure and so many of the rewards are focused on missions other than education, teaching, and learning. We need to rebalance that. If institutions don’t commit themselves to education, it will be much more difficult for anything significant to happen at the basic level—among professors, programs, and so on.
If AI does affect more experienced workers, that means many people will need more support in terms of lifelong learning. They will need support in reskilling, and in some cases, in changing their professional trajectories. This is an area where many higher education institutions preach much more than they practice.
So I think we need to rethink how we allocate our efforts in education portfolios, moving more attention toward lifelong learning. So far, the focus has been overwhelmingly on initial training, which has been the core of the sector in many systems.
Finally, we would need to rethink—or at least introduce—changes at the level of initial training: the way we teach, the way we assess students, the way we train and retrain academic staff. None of this will be obvious. But in the end, it will all come down to how much institutions are committed to education as the prime mission of higher education.
Alex Usher: So even if AI is not a mass job killer—either now or in the future—we are seeing declining rates of return on higher education around the world. There’s massive graduate unemployment in China, quite a bit in India, and in the United States, for the first time, young graduates are less likely to be employed than non-graduates of the same age.
What does it mean for the higher education sector globally if rates of return decline? Are we heading for a smaller global higher education sector?
Pedro Teixeira: I tend to be cautious with some of these conclusions. We may be extracting too much from what could be transitional situations. We’ve seen in the past moments where there were problems adjusting supply and demand for graduates, and those didn’t necessarily lead to a permanent or structural situation where education became less relevant.
In countries like China and India, higher education systems have expanded tremendously in recent years. In some ways, what we’re seeing now is similar to what other countries experienced when they went through massive expansions and the economy couldn’t absorb the rising number of graduates as quickly as the education system was producing them.
It’s also not surprising that in many countries we’re seeing lower relevance of initial training—bachelor’s or first-cycle degrees. That’s a supply-and-demand issue. As systems move from elite to mass, that’s normal. But in many cases, we’ve seen a growing premium for postgraduate degrees and for continuing education. So I’d be cautious about concluding that education will become less and less relevant.
That said, I would repeat my concern about complacency. I don’t necessarily expect a decline in the sector, but perhaps a slower pattern of growth. That will be a challenge, because we’re coming out of decades of relentless growth in many education systems.
I also think we’ll see a broader scope in how we approach education and differences in higher education portfolios. It’s not that there aren’t many things we can do, but it will probably require us to rethink what we expect from professors and where institutions should focus their attention.
Alex Usher: Right. Pedro, thank you so much for being with us today.
Pedro Teixeira: My pleasure.
Alex Usher: And it just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our listeners and readers, for joining us. If you have any questions or comments about today’s episode, or suggestions for future episodes, don’t hesitate to get in touch with us at [email protected].
Join us next week when our guest will be the University of Melbourne’s Andrew Norton. He’ll be talking about what lies ahead for Australian higher education under a second Labor government. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service.Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
