10 Jun 2016

Polytechs earn $150m from foreign students

10:29 am on 10 June 2016

Annual reports show foreign students paid the nation's polytechnics a record $150 million in fees, underpinning surpluses at many of the institutions.

International students at Unitec in Auckland

International students at Unitec in Auckland Photo: RNZ / John Gerritsen

The reports for 2015 show all but two of the 18 polytechnics made profits as international enrolments grew 22 percent to nearly 10,758 full-time students.

Polytechnic leaders say they would struggle without the students, most of whom are coming from India and China.

The polytechnic in Northland, Northtec, tripled its foreign student numbers last year to more than 500 on a full-time basis.

Northtec council chair Vern Dark said the increase was due to the campus it opened in downtown Auckland specifically for foreign students.

"We've had a small number of international students in Whangarei, but we actually opened a campus in Queen Street in Auckland, I think it's probably two years ago now, and so hence the large growth compared to the previous year in international students."

Mr Dark said international students did not distract from the institution's core role educating New Zealanders, but they were important.

"I guess if you looked at the numbers, there would be quite a large number of ITPs (International Tertiary Providers) that would be at sort of break even level, around that without internationals and last year we would be about that sort of number - we would be just above break even, without the funds coming in from internationals.

"So they're quite important to us, there's no doubt about that, in terms of the financial success of the business."

Waiariki Institute of Technology in Rotorua made an 8 percent surplus last year and its international enrolments grew 22 percent.

It merged with Bay of Plenty Polytechnic in Tauranga in May and its acting chief executive Neil Barns said international students had become increasingly important.

"They are now a pretty core part of your revenue which allows you to sustain the whole institution.

"For the Waiariki Bay of Plenty Polytechnic if you took away all the international students it would be very marginal. It would still be successful, but I think increasingly as time goes on that becomes less the case. We need them."

Neil Barns said the combined institution expected to grow enrolments further, but in Tauranga, not Rotorua, which he said had probably reached its capacity.

He said Rotorua people were very welcoming to international students, but the infrastructure of the city could only copy with so many students.

"The majority of students will look to work for their 20 hours allowed per week. And I think the ability of local communities and markets to absorb that is not unlimited. And the other big factor is accommodation - there's only so many homestays, plus you need availability of flats that students can take up."

Manukau Institute of Technology increased its international numbers by 56 percent to 961 full-time students last year.

The institute's director of sales and marketing Michelle Leadsom said the growth was the result of careful planning that started in 2012.

The chairperson of the Metro group of six big metropolitan institutes of technology, Mark Flowers, said income from foreign students had become more important, but the sector's finances were tighter than ever.

"We have absorbed cost increases for some years now without really the ability to raise fees. It is getting tighter, there's not as much head-room as there was. On the other hand increasing international revenues has definitely assisted, and I think we're putting in better systems."

Mr Flowers said there was huge international interest in New Zealand education, driven by a reputation for high quality.

Financial results

The Tertiary Education Education Commission recommends tertiary institutions make surpluses of between 3 and 5 percent.

The annual reports showed nine of the 18 polytechnics that reported results for 2015 achieved that goal and two, Aoraki and Tai Poutini, made deficits.

Aoraki, which was based in Timaru, made a $3.6m deficit, which increased to $6m if the costs of its merger with the former Christchurch Polytechnic Institute of Technology (CPIT) to form the Ara Institute were included.

The West Coast polytechnic, Tai Poutini, made a deficit of $1.6m.