Internationalization dilemma

Hong Kong has long relied on students from developing economies to internationalize its campuses, luring them with grants and immigration benefits.

Over the last five years, The Hong Kong PhD Fellowship Scheme, established by Research Grants Council of Hong Kong, increased its number of places from 250 to 400 annually, offering a yearly stipend of HK$337,200 ($42,960) and HK$14,000 a year for research and travel.

But experts warn such a system is financially unsustainable.

Wong Yuk-shan, who retired as the Research Grants Council chairman last year, said the cost of nurturing an undergraduate student in Hong Kong is around HK$380,000 a year — an amount so high that universities usually suffer a loss. Some universities have commercialized graduate programs to offset costs, which risks eroding academic quality.

Students from emerging economies could think twice about studying in Hong Kong, as the city's rising costs become prohibitive.

In 2024, Hong Kong ranked among the world's most expensive cities, with student housing costs soaring due to record rents and chronic shortages.

On average, six students compete for one bed on the campuses of the City University of Hong Kong and The Hong Kong Polytechnic University, a 2023 study by the global real estate company Cushman & Wakefield revealed. Half of the eight public universities have a student-to-bed ratio higher than five.

On-campus dorms are so scarce they're allocated by lottery, often limited to first-year students. Most students rent off-campus from their second year onward, said Hu from the consultancy.

Rents for some units near The Hong Kong Polytechnic University reached over HK$20,000 per month this year, according to real estate agent Spacious.

Inflation could dampen the appeal of Hong Kong to talent from countries like India and Vietnam — the very students who are enriching US and European campuses, experts said.

Proposed fixes include easing housing costs, allowing part-time work, and balancing graduate program commercialization with academic integrity.

Hu believes Hong Kong's property market downturn should be capitalized on to develop a student housing sector.

In June, the Development Bureau and Education Bureau introduced a pilot scheme streamlining the conversion of hotels and commercial buildings into student dormitories. Under the plan, the majority of conversions won't require additional planning approvals, with the first projects expected to open by the 2026/27 academic year.

This approach could simultaneously address accommodation shortages and help stabilize property prices.

Since Nov 1, 2024, the Hong Kong Special Administrative Region government has waived part-time work restrictions for nonlocal undergraduates to encourage post-graduation retention. Lau advocates expanding this to postgraduates to offset expenses.

With over HK$20 billion allocated annually to higher education, Hong Kong's eight public universities can attract top professors and maintain academic excellence, However, Wong warns against prioritizing profits over quality education.

The QS World University Rankings 2025 showed of the UK universities, 22 percent climbed in position, 58 percent dropped, and 20 percent maintained their rankings. In the 2025 ranking, 15 UK universities made the world's top 100, two fewer than the previous rankings.

"British universities, once world-leading, declined in standards over the past 30 years due to funding cuts. Their overreliance on international student fees diluted educational quality," Wong said. "We must avoid repeating this pattern."

Zhao Yimeng contributed to this story.

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