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While the higher education sector worldwide is still digesting the economic consequences of the COVID-19 pandemic, some first analyses indicate that the financial impact is quite substantial, especially in those countries where (international) higher education represents a major source of revenue for institutions.
According to the recent estimates of the Irish Universities Association (IUA), commercial revenue streams, which have become a fundamental element of the university sector funding model, have been significantly impacted. Combined reductions in commercial income in 2019/20 and 2020/21 across the eight IUA universities are now projected to reach approx. EUR 270 million. These losses are topped by the significant additional costs associated with the impact of COVID-19. The combined projected deficit is estimated at EUR 40 million in 2020/21, which comes on top of the past reductions in university funding accumulated since 2008. Against this background, the IUA has called on the Irish government to substantially increase investment in higher education and research as part of the post-COVID, post-Brexit national recovery, having outlined a comprehensive set of measures in a EUR 900 million package.
Another study published by the Australia Institute's Centre for Future Work in September exposed harsh consequences of the pandemic for the country’s higher education sector, that is, significant job losses. The new report points out that Australia’s universities were uniquely impacted by the COVID-19 pandemic and recession — including the closure of borders to most international students, the implementation of new COVID-safe instruction practices, and effective exclusion from Commonwealth support programmes like JobKeeper.
As a result, total employment in tertiary education in the first half of 2021 fell by 40,000 positions compared to year-earlier levels. While early months of the pandemic were marked by casual staff layoffs, most of the job losses this year were permanent, full-time positions — and all of them were at public institutions. This indicates that universities are undertaking a more permanent downsizing, on the expectation that border closures are likely to persist. The report urges the Commonwealth government to provide special temporary assistance to universities at the level of AUD 3.75 billion to replace and preserve the job cuts until revenues return to normal.
A similar report published by the American Association of University Professors American Association of University Professors (AAUP) last month has established a considerable decrease in salaries at the US higher education institutions (see ACA Newsletter – Education Europe, August 2021).