Dean Forbes



International Higher Education:

Managing Risk to Ensure Sustainable Growth

Melbourne, 14-15th February 2012

Professor Dean Forbes

Deputy Vice-Chancellor (International & Communities)

Flinders University

There are forces bringing shifts in universities risk profiles and approaches to managing risk. The goalposts have moved.

Some changes are the outcomes of reforms to university governance and perceptions of risk. An example is growing attention to the role and the composition of university councils. It is accelerating initiatives to reduce the size of Councils, reduce or eliminate direct government appointments, and phase in a more independent governance role for Councils. Councils that more closely resemble corporate Boards may have a different perception of risk.

Other changes are the product of shifts within the financial circumstances of public/private universities that are financial hybrids, a consequence of their diverse sources of revenue. The recent slowdown, and in many cases decline, in the number of international students will impact on risk. Slower growth in international students could conceivably reduce risk as it is easier to manage lower growth rates. However, sharp declines in international student revenue will jeopardise particular university activities and increase the risks of institutional stress.

Following the Government’s acceptance of the Knight Review recommendations most universities opted in to the new processes. They quickly warmed to thoughts about the rewards of visa streamlining, while simultaneously pondering the risks that might be involved.

Last December DIAC informed universities about their Overall Risk Ratings (ORR) based on hitherto unseen student visa data. Measured on their international students visa performance universities were allocated into one of four bands.

The challenge crystallized.

•    Optimists wondered how to get promoted to a higher level

•    Pessimists were concerned with how to avoid relegation

•    And some of us were thinking, we must do this, but what are the risks, and will I lose my job if I get it wrong?


Universities have risk profiles, risk registers and the like. They have often been referred to in AUQA portfolios. While considering and managing risks is an important and challenging task, risk profile documents can be static and make mind-numbing reading. 

In their review of the internationalisation of Australian universities, based on the Cycle 1 AUQA audits, Stella and Liston (2008) commented on strategic issues including quality assurance mechanisms and benchmarking. However, risk management is only mentioned in the context of transnational education. It may have had a higher priority in the truncated Cycle 2 round of audits.

A few years back Flinders University undertook a comprehensive revision of its Risk Profile. In the process of identifying new risks and refreshing our approach we immersed ourselves in a discussion about the essence of the University, and what we were trying to achieve. It was a great experience.

In the course of 2012 another review of the Risk Profile will see a few changes, including more separation between strategic and operational aspects of the University, and a clearer identification of responsibility/ownership of risk. Fine tuning, but nothing major.

International education risks are incorporated in the overall risk profile, but are not treated separately in the Flinders document. International students are included with all students in terms of teaching and learning. Partnerships and collaborations are also mainstreamed. The exception is the commercial risk associated with onshore and offshore students, which is identified separately.

Some universities address international education separately. It enables a greater level of visibility for the risk and a more explicit set of current controls and proposed actions in the event of a problem.

Flinders current focus is on international travel risks for staff and students, which I think we underestimate, and, not surprisingly, the consequences of the Knight Review.


DIAC’s international education visa strategy has, since the introduction of the current five country Assessment Levels, been built around interpretations of risk. The structure has been supported by the universities, with the major criticisms directed at the speed of visa processing and the positioning of particular countries within the Assessment Levels (AL). There were never enough university students in lower risk AL1 and AL2 countries, as far as universities were concerned.

At their simplest, the post Knight Review visa arrangements will work like this. All prospective students intending to study in a university program will, if they chose a university in AL 1-3, be entitled to be treated as low risk. That is, they will be assessed by DIAC as if they came from low risk, AL1, countries. They will be treated preferentially. DIAC refers to it as a streamlining process: I will use that term as well.

In order to determine which universities are entitled to be treated in this way, DIAC developed an Overall Risk Index in which universities are categorised in the same way as are countries; in the AL1 to AL4 range. On the initial calculation of the ORI, the bulk of universities were allocated to the AL2 band, the second lowest level of risk out of four levels.

If universities perform poorly, as measured by their ORI, they will be moved to AL3, where they are under observation. If the Index deteriorates for two years they will be placed in AL4 and blocked from having access to the streamline process. This means the time taken for DIAC to assess their visas will blow out to 90 days, compared to just five days for streamlined students.


The initial area of risk for universities was about the decision to opt in or opt out of the streamlined visa program. Where they had a real choice by being classified as AL1 or AL2, this was a relatively straightforward trade-off between risks and rewards.  It was more complex for universities categorised in AL3 or AL4.

For those that opted into the streamlined program, the area of risk shifted to the performance of the university. This centres on the ORI, which will be calculated on a six monthly basis. This is a short period; too short in my view. A rolling figure over 24 months would even out the impact of short-term blips. Deterioration in the visa performance of international students would see the university drop down the AL range and lose access to the streamlined program.

So what are the specific factors that could precipitate a slide down the Assessment Levels? Essentially, universities have greater responsibility for enrolling only bona fide students. That sounds straightforward: right? Well, no. DIAC’s assessment of students will be at the AL1 level, which is less rigorous than it is for AL2-AL4 countries. If there is a mis-judgement of an international student by either DIAC or a university it will affect the university’s ORI, and hence jeopardise their access to the streamlining process.

Universities are not required to do anything, but will still be held accountable. At the same time, they will need to manage the risks around the interpretation of visa requirements and of the information they have access to, and the risks of seeking out and assessing private information that may contravene privacy legislation.

There are five specific risk areas for universities that need to be managed. They must:

1.    Undertake a financial assessment of students in order to be sure that students can meet their obligations. Some universities may outsource this function or work with banks on assessments

2.    Ensure the students meet the appropriate English language requirements. DIAC has identified what it believes are appropriate levels of English for university study

3.    Deal only with student recruitment agents that have a high level of integrity and success with the students they recommend. Coincidentally, DEEWR/DIISTRTE has recently released a Statement of Principles for the Ethical Recruitment of International Students by Education Agents and Consultants

4.    Where visas are packaged with partner education institutions, ensure the partners standards are at the same level as the universities

5.    Be confident that students are Genuine Temporary Entrants (GTE). That is, they are not intending to stay in Australia on a long-term basis

Universities have for some time dealt directly with four of these five areas. The exception is the judgment call about whether a prospective student is a Genuine Temporary Entrant. The real difference is that the risks for universities is significantly higher. Some of the risk previously taken by DIAC has been shifted to the universities. These are risks by proxy.

Under the current regime, if a university misjudged a student it was dealt with on an individual basis, as for any other student issue. DIAC managed the consequences. If the national visa data demonstrated that there was a pattern in a particular country, and students were not complying with the visa requirements, DIAC adjusted the AL for the country. Under the streamlined process the adjustment will be based on the university with which the student is involved. If a negative pattern emerges, as measured by the ORI, the university will be penalised.


For universities the risk to reputation is the most serious concern of the streamline model.

The visa status of each university, based on DIAC’s calculation of the ORI, will be public knowledge via a website. It is a naming and shaming approach. Higher levels of transparency is an intrinsic part of the digital landscape that universities must accept.

The outcomes of AUQA audits in the past were made public without a significant impact on the overall reputation of an individual university. In parallel, AusList is a public indication of the Government’s overall assessment of transnational education programs. And university rankings pop up in the press almost daily, regardless of the information on which they are based or the competence with which they are put together. Every university seems able to find a handful of measures that suit it, and help it to minimise the downside.

The impact of the ORI will be more focused and have much more immediate impact. Prospective students, their families, and agents will zero in on the obvious. If a university is in the streamline process the visa bar is lower because of the lighter touch of the AL1 assessment (the exceptions are, of course students from countries that were already AL1). Moreover, visa processing times will be much faster.

For many Australian universities the inevitable consequence of losing access to the streamline program will be a significant reduction in international students and a precipitous decline in revenue. In a worst-case scenario, such as where this exacerbates reduced revenue due to the demand-based funding model, one or two might be pushed close to insolvency.

How might Flinders incorporate this in the Risk Profiles? There are two significant sets of controls that need attention.

First, controls that ensure that the university remains in the AL1 or AL2 categories:

•    Establish a quality assurance process, through the University ESOS Compliance Officer and Reference Group, aimed at the main components of risk (the five points documented in the previous section)

•    Ensuring awareness in the key offices of the University about the new requirements to assess and monitor international students (the International Office, International Student Services Unit, Student Finance Office)

•    Cease, or restructure, recruiting in high risk markets

•    Identify a financial institution able to provide services to support students

Second, controls mitigating the impact of suspension of access to the streamline process:

•    Revise forecasts of future international numbers

•    Increase the focus of recruitment on AL1 countries

•    Identify other new markets eg transnational or on-line education opportunities

•    Address the causes of the poor ORI score and develop a plan to re-apply for streamline status when eligible

•    Create a fund that could be drawn on if international student income nose-dived


Universities provide international students with an education, and combine this with an overall, beyond the classroom, education experience. However, the scope of university responsibilities is growing. Visa streamlining is not the only area where universities are expected to behave as an instrument (or proxy) of government policy in areas well outside education.

ESOS legislation and the National Code define and extend the span of university responsibilities. The boundaries of duty of care issues are expanding. Making students aware of the dangers of the Southern Ocean, or the risks of wandering along Hindley St after midnight.

In security matters universities have specific responsibilities as a result of United Nations Sanctions (DFAT 2009) and other specific measures to curb activities including terrorism and money laundering.  The UN Sanctions require us not to deal with goods, services or persons that are the subject of sanctions. How will we know if an international student from Sudan or the Congo is subject to a sanction or engages in activities in Australia that are subject to sanctions? Penalties are severe. Up to 10 years imprisonment for an individual, or a fine of up to $1.1 million for bodies corporate.

The re-casting of the government-university relationship alters the risk profiles of the university, its employees, and instruments of governance (eg University councils) by being proxies for DIAC.

The streamlining process adds more explicit expectations about each university’s responsibilities for student behaviour while they are students, and after they complete their program. Moreover, the university will be punished if it errs too often in its offer of a university place to too many students who overstay their visa.

The visa streamlining process further blurs the role of government and universities. On the one hand, government, in the guise of DIAC, assumes an enhanced role in determining English language standards for students.  On the other hand, universities take on visa assessment issues, not because they are responsible for issuing visas, but because they are expected to know the future immigration intentions of prospective students.

Overall the next 12 months promise interesting times for international heads in universities. The lesson of all this for universities: be careful what you lobby for!


The arguments put forward in this presentation have been influenced by discussions with colleagues at Flinders University and members of the Universities Australia advisory group.


AL  Assessment Level

AUQA  Australian Universities Quality Agency

DEEWR  Department of Education, Employment and Workplace Relations

DFAT  Department of Foreign Affairs and Trade

DIAC  Department of Immigration and Citizenship

DIISTRTE  Department of Industry, Innovation, Science, Research and Tertiary Education

ESOS  Education Services for Overseas Students

GTE  Genuine Temporary Entrant

ORI  Overall Risk Index

TEQSA  Tertiary Education Quality and Standards Authority


DEEWR 2011 Statement of Principles for the Ethical Recruitment of International Students by Education Agents and Consultants, Draft version December 2011.  (Ellen Poels email 22/12/11)

DFAT 2009 UN Sanction Enforcement Laws and the Tertiary Sector, powerpoint presentation, Canberra

Stella, Antony and Colleen Liston 2008 Internationalisation of Australian Universities: Learning from Cycle 1 Audits, Australian Universities Quality Agency, Melbourne.