For years, it has been predicted the increasing number of students flowing into the graduate jobs market would result in falling salaries, underemployment, and students taking on second and third degrees to get an edge in the competitive jobs marketplace.
But what of students who spend upwards of A$200,000 on obtaining a degree in Australia, New Zealand, Canada, the United States or Europe?
Many students come to Australia from overseas and pay full market rates – AU$100,000 (US$72,000) is a very conservative estimate for fees alone, topped with the cost of living – for undergraduate and postgraduate degrees.
Until now, we’ve known relatively little about how they fare when they return home and if there’s been a valuable return on their substantial investment.
New research from the International Alumni Job Network (IAJN) reveals the return on investment for an international education is still positive for international students, and they’re generally also positive about the experience.
But it’s in the best interest of individual universities to actively work with businesses in home countries to help secure job prospects for graduates.
Some universities currently do this, but most do not.
How many students study abroad?
According to the Institute of International Education, each year over 5 million students study abroad.
Of them, more than a million go to the US.
Australia is currently the third-largest destination country, but federal education minister Dan Tehan recently predicted Australia will overtake the UK in 2019.
Each year, the numbers increase in a seemingly unstoppable flow of students seeking an overseas degree as the passport to a better life.
In Australia alone, the figures are breathtaking, with a 17 percent increase in just one year to be now valued at A$34 billion to the Australian economy.
Return on investment
The IAJN survey covered alumni who originated from and returned to eight Asian regions: China, Hong Kong, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam. Respondents studied in Australia, the US, the UK, Canada, New Zealand or Europe.
The survey found, thankfully, the vast majority of students were more than satisfied with their international experience.
In general, Indonesians were the most positive about their international experience (92 percent) and Indians the least positive (75 percent).
Some 86 percent of Thai students thought international education was important, compared with 64 percent of Indians.
When it comes to satisfaction with return on investment, things get a little skewed. More than 70 percent of returned alumni were satisfied with the return on investment, with the exception of Indonesia (67 percent) and India (a lowly 46 percent).
Obviously, the reasons are far from straightforward. We hypothesize the responses are based on where students are getting their pre-enrolment information.
We suspect using agents and university websites as the primary source of information may be too steeped in marketing hype and not enough in reality.
By contrast, students who received their information by word of mouth from family, friends and other alumni were much more realistic in their expectations of studying abroad.
This study used US dollars to calculate the average wage of returned graduates because it’s the best benchmark.
In terms of income, the story is also mostly a positive one. While half of all returnees earned less than US$1,000 per month (A$1,411 per month or A$19,930 per year) in their first job, 33 percent reported earning more than US$4,001 per month (or A$67,729 per year).
Returns on investment depend very much on where students come from and how their earnings on return compare with their locally educated compatriots.
On the other hand, locally educated graduates from Singapore and Hong Kong earn on average US$1,966 and US$1,722 per month respectively.
As expected, earnings growth accelerates over time. Some 40 percent of returned alumni earned more than US$10,000 per month (AU$170,000 per year).
Although we must take account of the fact some alumni responding to the survey gained their degrees more than two decades ago and were part of a relatively elite group who travelled overseas for study at that time.
On the downside, 30 percent of PhD graduates reported currently earning less than US$500 per month.
One would assume this is a result of gender and age (such as for childbearing women). But within three to seven years, most graduates witness healthy salary increases, also as one would expect.
Attitudes towards Australian Go8 universities
The IAJN was also able to break down attitudes of students who attended a Group of Eight university (UWA, Monash, UNSW, ANU, the University of Melbourne, UQ, the University of Adelaide, and the University of Sydney).
Responses to other individual universities were too small to be meaningful.
According to the survey, there was little financial benefit from studying at a Go8 university (compared to a non-Go8 university) for a first job. The ANU provided the best returns on investment over time.
Monash and UNSW had the highest satisfaction with return on investment at 75 percent. Sydney alumni also downplayed the role their international education had on their subsequent career (69 percent satisfaction compared to 84 percent at ANU and Monash).
The dynamics behind these sorts of statistics will be up to individual universities to analyse and understand.
But the survey found Sydney University had the highest rate (15 percent) of alumni earning more than US$10,000 a month in their first job.
Somewhat ironically, Sydney also registered the lowest satisfaction with return on investment (62 percent) – perhaps a culmination of high fees and the cost of living in Sydney.
Obviously, it’s in the interests of individual universities to actively work with businesses in home countries to help secure job prospects for graduates. The power of word of mouth and social networks should not be undermined.
The value of the international education sector might have hit an all-time high, but there’s pressure on individual universities to do their best to ensure graduates get a genuine return on their massive investment in their education abroad.
The author would like to acknowledge the contribution of Shane Dillon, the founder of the International Alumni Job Network, made to this article.