Australian Universities are in trouble. During the past 10 years there has been a sharp growth in foreign student enrolments, however this is no longer the case and there are now fears that international student numbers may drop sharply in the next five years. If this happens some Australian Universities will be badly hurt as full fee paying international student's account for 15% of their revenue.

Australian universities seem to be losing their appeal due to claims that standards at local universities are falling due to declining resources. Commonwealth grants have declined from 57% of total revenue in 1996 to about 40% in 2004.
The rise of the Australian dollar this January has also had its impact on international student numbers as it has increased the study and living costs for foreign students.

International students are vital to the ongoing growth of Australia's universities as the executive dean of Science at Queensland University explains 'close to 20% of our core budget comes from international students'. For a small number, including the University of Ballarat and the Central Queensland University, 50% of students enrolled are from overseas.

The effects of the declining numbers of international students are seen clearly in NSW as in 2004 5 out of the 10 universities in the state ended with a negative result. The worst of which being the University of Newcastle, it lost $20.2 million, prompting the retrenchment of 20% of its workforce.

The Federal Government suggests that universities need to be more commercially orientated and produce income through their own endeavours. However, the abolition of the compulsory student union fees will simply add to the pressures that universities are already facing.