The market for international students is growing dramatically. In Britain, more than 400,000 international students attended UK universities last year (UKCISA, 2018).
It is no longer just Oxbridge that attracts overseas pupils. Today, most institutions have realised the value of international students, especially as traditional revenue streams like certain government grants dry up.
Earlier this year, the government announced an international education strategy and unveiled bold new initiatives – such as visa extensions – to support its ambition of a 30% increase in the number of international students by the end of the next decade. Announcing the strategy, the Department for Education (DfE) said “there is no limit on the number of international students that can study in the UK”.
It is a wise decision given the reputation British universities hold and the UK’s need for overseas talent to fill jobs in specialist disciplines. In fact, a recent investigation by The Times found that UK universities are holding thousands of places aimed at prospective international attendees.
Increasing the population of international students poses challenges for schools, perhaps the most significant being processing tuition fees.
Currency overload
Having worked in education for a long time, I have seen this problem firsthand. International students will often receive a bill for upcoming schooling, organise a bank transfer and – despite paying in full – receive notifications a few days later that they have underpaid.
Why is this the case?
There are three reasons making a payment isn’t quite as easy as it sounds.
- Cross-border payments firms have historically taken big commissions when handling international payments.
- Currency fluctuations are also a big problem. The value of the pound or dollar can change every minute of the day, making it entirely possible that a payer will unwittingly underpay – even just a small underpayment can hold up the entire process. When this happens, both the student – who may need to find an extra £500 to cover further costs, and the university – which has holes in its books – are inconvenienced.
- The sheer number of different payments methods we’re now using has put pressure on a system that wasn’t designed to cater to the many types of credit cards, debt payments, bank transfers and digital wallets, like Chinese platform AliPay, that consumers prefer to use today.
When these issues are combined with slow reconciliation, retrieving payments is a sluggish process for the university, and one that could hold up administration teams for weeks as they fight to resolve it.
Universities, more than ever, need every revenue stream they can find and not receiving payments on time can impact cash flow, and limit a universities ability to invest and grow.
It is a double-edged sword. Universities want international students to bolster revenues, but the trouble of receiving their tuition payments can put a big strain on university admin teams and reduce profitability if handled incorrectly.
Making the money flow
This might all sound overly complicated, but it doesn’t have to be.
Payments can now be fully integrated into a university’s accounting system and wider workflows which provide a cost-efficient, operationally light and ‘high-touch’ means to solve the complex nature of cross-border tuition payments.
It is important for students to feel supported around the clock because universities are communities. As such, payments companies working in the higher education sector should also be offering campus visits and round-the-clock customer service to solve problems.
If universities provide this level of student experience for international students, they will remove the pain of cross-border tuition payments. It is simply in the business interest of universities to ensure they have these better payment systems in place.
Sharon Butler is vice-president of global education at Flywire