E.M. Forster suggested we should “mistrust all enterprises that require new clothes”2 but Shorelight has restyled its website and is offering aggregator type filters which reflect a change of direction. The filters help clear up what’s been going on with their portfolio and suggests that the pressures on their pathway offerings are causing them to pivot at pace. The site gives a clear sight into the dash for direct recruitment partners that looks to be the increasingly popular modus operandi for all pathway operators.
Searching suggests that a “groundbreaking new partnership”, signed with Mercer University in October 2018 who were described as “an exemplary partner for Shorelight” at the time, doesn’t even make the roster in 2022. The pathway program in the fifteen year contract with the University of Kansas signed in 2014 seems to have come to an end just eight years later. And the pathway with the University of Central Florida (UCF) heralded in 2013 as “another big win for the students of an institution that is clearly on the move” is also over.
Only nine university partners are shown offering the full service of undergraduate and postgraduate pathway option with direct recruitment in both. Leaving aside the three American Collegiate offerings there are a total of 14 undergraduate pathways and 12 postgraduate pathways. It’s a complex offering, including three which are postgraduate direct recruitment only and with some significant restrictions – the Johns Hopkins University choices appear to be for engineering programs only.
| UG Direct Only | 11 |
| UG Direct and UG Pathway Option (no PG) | 14 |
| PG Direct Only | 3 |
| PG Direct and Pathway Option (no UG) | 12 |
| PG and UG Direct with Pathway Options in both | 9 |
| UG and PG Direct Only (no pathways) | 12 |
For new readers, the American Collegiate offering is a “choice” program hosted by American University in Washington DC and with courses through UCLA Extension in Los Angeles. The goal is then to transfer to an institution that will accept the credits. American Collegiate Live offers online courses taught by UMass Boston and bearing academic credit with “full recognition” by 13 universities
The Past Is a Different Country1
When Elizabeth Redden reviewed the US pathway scene for InsideHigher Ed in 2018 she commented, “With a few notable exceptions, both Shorelight and INTO tend to contract with large institutions, and their partnerships tend to be larger scale.” Those days seem long past with Shorelight’s burgeoning list including a long string of smaller, regional colleges. INTO’s closures at Washington State University and Colorado State University also suggest the game has changed irrevocably.
For completeness, the current state of relationships3 on major pathway operator websites shows:
| Current Total US Partners | Current US With Pathway* | Closed in US Since 2018** | |
| Shorelight | 42 | 18 | 3 |
| INTO | 11 | 9 | 3 |
| Navitas | 3 | 1 | 7 |
| Study Group | 9 | 5 | 8 |
- *Excludes American Collegiate
- **Pathway announced/operational but no longer shown
It is difficult at this point not to recall the ill-fated words of Karen Khemka, a partner with the Parthenon Group, who said in 2014, “The U.S. third-party/outsourced pathway market is less than half the size of the Australian market despite having a higher education system that is 10 times the size. We anticipate that growth will be constrained only by the pace at which private providers can develop the market.” It came towards the end of a period when private equity invested over a billion dollars in pathway operators but as I asked in a 2018 blog, “..has attention to the supply side of the equation ignored the challenges of changing patterns of demand around the world?”
Unless We Remember We Cannot Understand1
Curiously, the pathway operators inverted the equation when they were promoting the growing supply of students to meet the demand of universities in the traditional recruiting countries of the US, UK and Australia. They quoted the dubious “8 million globally mobile students by 2025” mantra and largely ignored the potential growth of inter-country competition, relatively low cost of entry for new pathways, the rising cost of acquisition as agent and student choice grew, and the threat of substitute products through technology. Ignoring one of Porter’s Five Forces seems poor business sense but shunning all five seems less than sensible when you are investing significant amounts of money.
One talented US leader, running the American portfolio of a UK-based pathway operator, posed these fundamental questions shortly after INTO celebrated its £66m investment from Leeds Equity and Shorelight’s launch. The company carried on regardless, although US losses mounted, the quality of partners declined and the UK operation stopped adding new partners. As the Trojans found, it is unwise to ignore the insights and prophecies of a truth telling Cassandra.
Other observations that were rarely heard out or given sufficient attention included:
- the home of the pathways in Australia and the UK were 13-year schooling systems where the Foundation year of a pathway completed a fundamental requirement. This gave an ideal opportunity for language tuition and academic skill development. US universities already took students after 12 years schooling and those with larger international cohorts often had well developed ELIs to accommodate language needs;
- recognition that the bubble created by fast-growing demand from China, particularly at undergraduate level, was coming to an end as demographics changed;
- understanding that the bounty of state-sponsored language students was fading fast and unlikely to be replaced;
- for many US universities the attraction of students paying out of state fees was as attractive financially as international students and seemed more accessible as a market;
- the best US universities could already recruit if they wanted to and so the opportunities to have great brand names on the website was always going to be minimal.
A Room With A View?1
While new recruitment markets are emerging they are quite different in character and nature. The growth in students from India has led to a demand at post-graduate level, often without the need for significant English language or pathway academic skills. It seems likely that Shorelight’s willingness to take on direct recruitment for less well-known institutions reflects the reality that those students are less brand conscious, looking for lower fees and are more focused on a qualification that gives them post-study work options.
It may be a model that is less stable and less lucrative than the pathway model appeared to be in the early part of the 21st Century but INTO and Shorelight have found the going very tough at many of their US pathways and need to do something. As INTO launches its new strategy there may even be a longer term appetite for uniting forces with Shorelight in the US to become a super-dominant player. Bringing the two groups together would offer a large direct recruitment portfolio, allow some selective reduction in competing or uncompetitive institutions, fill a gap in terms of online technology for INTO and should enable significant reductions in overheads.
All of these types of potential mergers are riddled with questions about existing financial arrangements, for example Huron Consulting has $40.9 million in convertible debt in Shorelight Holdings LLC maturing in January 2024, competing institutions and cultural fit. But when the CEO of INTO is talking explicitly about “lighter touch, lower investment” (The PIE live interview, 11 July 2022) ways of having discussions with universities, it seems reasonably clear that there is a shared interest in building non-pathway relationships. The real question will be whether the new era for organizations that cut their teeth on pathways can drive enough revenue and profitability to be worthwhile and whether consolidation offers added value.
Of course, it may also be that the days of the recruitment behemoths are over. Twenty years of pathways has created some highly skilled individuals with strong in-country contacts who could simply choose to go solo with a smaller portfolio of hand-selected university names. Faced with a choice between being one of eight names in a portfolio or being in the bag of a sales team with 37, 48 or even 100 different products to promote, a smart university might choose to be in a select pack rather than a faceless herd.
Notes
- Shameless use of E.M. Forster book titles and quotes throughout the article.
- Apparently, Forster adapted this quote from Henry David Thoreau
- It is not always easy to interpret the websites of pathway operators and I am happy to accept authoritative and evidenced corrections and note amendments where appropriate
Image by yogesh more from Pixabay