{"id":12503,"date":"2018-11-30T16:08:31","date_gmt":"2018-12-01T00:08:31","guid":{"rendered":"https:\/\/lapost.us\/?p=12503"},"modified":"2018-11-30T16:08:31","modified_gmt":"2018-12-01T00:08:31","slug":"insuring-against-drop-in-chinese-students","status":"publish","type":"post","link":"https:\/\/lapost.us\/?p=12503","title":{"rendered":"Insuring Against Drop in Chinese Students"},"content":{"rendered":"

The\u00a0University of Illinois at Urbana-Champaign<\/a>\u00a0has paid $424,000 to insure itself against a significant drop in tuition revenue from Chinese students.<\/p>\n

In what is thought to be a world first, the colleges of business and engineering at the university signed a three-year contract with an insurance broker to pay the annual six-figure sum, which provides coverage of up to $60\u00a0million.<\/p>\n

The university came up with the idea in 2015 and implemented it last year but received permission from the broker to discuss it in public only earlier this month.<\/p>\n

Jeff Brown, dean of the Gies College of Business, told\u00a0Times Higher Education<\/em>that the insurance would be \u201ctriggered\u201d in the event of a 20\u00a0percent drop in revenue from Chinese students at the two colleges in a single year as a result of a \u201cspecific set of identifiable events.\u201d<\/p>\n

\u201cThese triggers could be things like a visa restriction, a pandemic, a trade war — something like that that was outside of our control,\u201d he said.<\/p>\n

Tuition revenue from Chinese students makes up about a fifth of the business college\u2019s revenue.<\/p>\n

Brown said that the insurance would cover the colleges\u2019 losses if the decline was temporary and buy the university time to \u201cmake some adjustments to where we recruit\u201d if it became a longer-term issue.<\/p>\n

\u201cHedging the risk that we face gives us more confidence to be able to continue proactively investing in the very strong relationships that we have in China,\u201d he added.<\/p>\n

\u201cWe chose the $60\u00a0million figure because that roughly is our exposure across the two colleges. If demand had actually completely disappeared, we\u2019d be \u2018made whole\u2019 for that year.\u201d<\/p>\n

Last month, Peter Varghese, chancellor of Australia\u2019s University of Queensland, suggested that universities should put revenues from Chinese students into a trust fund to insulate themselves against a future drop in enrollments from East Asia.<\/p>\n

Sylvie Lomer, lecturer in education at the University of Manchester, said that Illinois\u2019s move was \u201can interesting development\u201d and \u201crepresents the logical extension of the marketplace in international higher education.\u201d<\/p>\n

\u201cThere are a number of institutions in the U.K. which would be overexposed to this particular form of risk\u00a0\u2026 so this could be a long-term trend,\u201d she added.<\/p>\n","protected":false},"excerpt":{"rendered":"

The\u00a0University of Illinois at Urbana-Champaign\u00a0has paid...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-12503","post","type-post","status-publish","format-standard","hentry","category-u-s-a"],"_links":{"self":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/12503","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12503"}],"version-history":[{"count":1,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/12503\/revisions"}],"predecessor-version":[{"id":12504,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/12503\/revisions\/12504"}],"wp:attachment":[{"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}