Education – Page 11 – View From A Bridge – management, education and personal thoughts

Fatal Four Way Match for Universities?

Economist John Maynard is famous for saying, “In the long run we are all dead”, but he also wrote, “there will be no harm in making mild preparations for our destiny”. Universities might consider this as they struggle to encourage international students to overlook the near-term uncertainties of the pandemic in 2021. The real winners will be those readying for 2022 when all four of the major receiving Western countries are likely to be competing from a position of strength.

There is no point in the last twenty years when the US, UK, Canada and Australia have, at the same time, been growing aggressively or had in-country conditions enabling them to promote themselves effectively. While globally mobile student numbers have grown there has always been a country operating with at least one hand tied behind its back. It seems likely that this is about to change, which is going to bring unusual pressures to bear on recruitment efforts.

If there is significant headway on vaccination rollouts, the pandemic recedes and internal country politics align it will be time for a revitalized UK, a desperate Australia, a confident Canada and a Biden-powered USA to do battle. Those familiar with World Wrestling Entertainment’s Fatal Four Way match up may think it could be a contest that makes equally interesting viewing. For international students it will mean a smorgasbord of opportunity, offers and opening doors.

Overview and Trends

Data from individual countries are not standardized but the graph below focuses only on students identified as bachelors, postgraduate taught and doctoral for each country. This eliminates the language only, non-degree and/or OPT registered elements that provide wider fluctuation and distortion between countries. For example, significant elements of the recent Canadian international student growth are concentrated outside degree level programs.

The data indicates that when the US has done well Australia and the UK have been steady or in decline. It also demonstrates the increasing place of Canada in degree level awards with every likelihood that the explosive growth at lower levels will feed through over time.

A starker way of visualising the pattern is to consider each country’s percentage share of the aggregate enrollements of all four and show how it has risen or declined year on year. Changes in the US share correlate reasonably well to the shifts in the fortunes of other countries and particularly the UK and Australia. The Canadian share is relatively stable but is likely to have an increased impact as the volume increases.

From 2002/03 to 2011/12 the US consistently lost market share against the other countries. The burst of growth, which underpinned the expansion of investment in pathways in the US came from 2011/12 to 2015/16 when its share of the market grew. The subsequent decline of US enrollments from 2016/17 has correlated with accelerated growth from Canada and Australia and latterly, the UK.

Country by country factors broadly match the numbers and suggest that it was not competition alone that caused the ebbs and flows. US growth in the 2000s was sluggish as the country proceeded with caution after the terrorist attacks of 9/11. The UK stagnated after removal of post-study work visas in 2012. Australian visa restrictions, from 2009 were followed by significant benevolent changes from 2013 onwards. And Canada’s focus on growth came with particular emphasis from the 2011 Economic Action Plan and 2014-2019 International Education Strategy although its relative share was undermined by the US growth between 2011/12 and 2015/16.

The Global Picture

At a global level, the OECD measure of globally mobile students pursuing tertiary education gives an indicator of the competitive threats and opportunities that exist. What seems most clear is that the trend has been for the non-OECD countries to increase their share of the market over time. In 2018 they had 30% of the market while in 2000 they had only 24%, which suggests power is gradually moving away from the traditional receiving countries.

The big four will also suffer from the success of countries like Germany, the Netherlands and Russia taking an increasing share of OECD country growth. A by-product of that may be the way that pathways – which have come to be a dominant part of the UK and Australian landscape – have to respond to the new era. Pathways operations in Europe have become commonplace and Brexit may be another factor that accelerates their growth.

Number of international or foreign students enrolled in OECD and non-OECD countries

Source: Education at a Glance 2020. Figure B6.1.

With growth likely to come from more price sensitive markets it may also be worth universities taking account of the relative changes in costs that may be coming around the corner. It is interesting to watch foreign exchange predictions and there seems to be a view that the US dollar may weaken over the coming 18 months and increase the competitiveness of its services. Alongside this there are voices suggesting strengthening of the UK pound, the National Bank of Canada expects the Canadian Dollar to appreciate, and there seems to be plenty of confidence in the future value of the Australian Dollar.

Conclusions

It seems reasonable to conclude that over the past two decades each of the main four recruiting countries has, from time to time, benefited because one of the main competitors has struggled to create the conditions for growth. But no country with a thriving higher education section is going to willingly shut its doors forever and all the signs are that universities will need growth to offset economic conditions and government cutbacks in their home country or state. While it is easy to feel smart when things are going well; it is wiser to be smart about what is happening to the competitive set and what you can do to prepare for changing conditions.

2021 remains uncertain but there is every reason to believe that 2022 will see greater competition across the globe. In a head-to-head match, where the quality of the universities, visa availability and the possibility of post-study work become more equal, it will be interesting to see who wins. The US has all the tools to win and its fall from being the most favored destination owes as much to its decrease in popularity as the increase in desire to go elsewhere.

The time to prepare is now, and there is nothing to stop a smart US university giving real consideration to establishing a market-priced offering to students from the most rapidly growing source markets. Establishing a high-profile recruitment platform in early 2021 would take advantage of the market sentiment towards the Biden administration supported by the gradual re-opening of visa offices. Carpe diem may summarize 2021 but audentes fortuna iuvat should be on everyone’s lips for 2022.

Footnote

Data on international enrollments are not consistent across the main recruiting countries. The data used takes sources where it appears to be possible to secure an aggregate number for total enrollments of international students undertaking a bachelors, postgraduate taught or doctoral degree. The sources for each country are itemised below and any insights or corrections to my assumptions are welcome. The data are also subject to other anomalies which make comparison a subjective business. The main points to make in that regard are:

i) Australian data appears on a calendar year. Placing this against sources reporting academic years requires making a judgement about which year compares to which but is not material in the context of the main line of argument in this blog.

ii) UK data used are from the latest HESA release (27 January 2021) for the most recent five years and use historical data for the years before. In building the spreadsheets I noticed that the numbers in the most recent release differ slightly from those in prior releases. These differences are not significant enough to make a difference to the main argument.

iii) EU student data has been omitted from the UK data because the economic incentive to recruit them is not the same as international students who can be charged higher fees than home students.

iv) The timing of data collection is likely to be an increasingly important factor as universities increase their number of entry points in the year. This is likely to be a contributing factor to the HESA data noted above.

v) Sources

– US data from IIE Open Doors download of historical data and analysis of Undergraduate (Bachelors and Associate), and Graduate only:

– UK data from Higher Education Statistics Authority. Latest release for most recent five years but historical data before that time. Non-European Union, all levels (UG and PG) and all modes of study:

– Australia data from Department of Education, Skills and Employment, Higher Education Statistics, uCUBE, Enrolments Overseas, Sum of Postgraduate and Bachelors, 2001-2019 (removed enabling and non-award):

– Canada data from Statistics Canada, Postsecondary enrolments, by registration status, institution type, status of student in Canada and gender. Selected University, International Students, all fields of study, 2000/2001 to 2018/19. Sum of International Standard Classification of Bachelors, Masters and Doctoral (and equivalents) for Canada:

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Un-civil War for UK Universities If Welsh Break Ranks on EU Fees?

A tweet from Chris Marshall, Head of Policy and Strategy, at Swansea University on 6 January suggested that the first shots may have been fired in the battle to lure EU students to Wales when their fee status changes to ‘international’ later in 2021. The sub-text and purported THE headline is that the “Move sets Wales apart from rest of UK post-Brexit”. It implies that the Welsh Government is legislating, or planning to legislate, to mandate differential fee treatment for EU students attending Welsh universities which would probably provide legal protection from the anti-discrimination principles of the Equality Act 2010.

Just a word of caution. The link to the timeshighereducation.com source lead me to a page that read You don’t have permission to access this page.and a search of the THE web-pages does not find the article. It seems possible that someone jumped the gun, that the website has not updated or that the story, for some reason, never appeared.

If the Welsh Government does legislate in a way that gives legal cover for EU students being charged the same fee rate as Home students it may be the starting gun in a race to level the playing field in the UK. Those with long memories in UK higher education will recall the period when the post-study work rules in Scotland were more benevolent and seen as a boon for international student recruitment north of the Border. There seems little doubt that legislators in England, Scotland and Northern Ireland would come under pressure to allow the same benefit if Wales makes a break.

It would probably be a relief for Swansea University who management of their current preferential treatment of EU students seem a bit convoluted. The main fees page states, “Your Tuition Fees will be chaged (sic) at the same rate as International students” but the Undergraduate Scholarships page tells us there will be an “automatic discount to tuition fees for EU students that join us in the academic year 2021/22 and will reduce the fees to the same level as UK tuition fees”. Perhaps this is just an attempt to spare the feelings of other international students who will be paying £5,550 a year more for a course in, say, Business Law, LLB (Hons).

Another version of the preferential pricing is seen at Bangor University which has a £5,000 EU student scholarship for EU undergraduate students in 2021/22 – with the spin that £2,500 is off fees and £2,500 is off university accommodation. The difference between the International fee for a BA in Business Studies and the Home fee is £6,000 so it nearly makes up the difference. Maybe there is a hope that having a ‘scholarship’ split between fee and accommodation is a way of defending a legal challenge on discriminatory pricing?

There may well be other variations on these themes but the trend for many universities reviewed in England and Wales appears to be to proclaim on the international fees page that EU students will be subject to international fees from 2021/22. The underlying blanket sweetener, discount, scholarship or bursary for students from 27 European countries is offered discretely, some might also say discreetly, on a separate page. It all seems less than transparent and might suggest that there are deliberate attempts to keep the preferential treatment of students from Europe under the radar.

Checking the Government Position

In a written statement from Kirsty Williams, the Minister of Education for the Welsh Government, on 10 August 2020 said that EU students ‘will not be eligible for support or, in the case of higher education courses, home fee status’ after 1 August 2021. A search of the Welsh Government pages shows a new statement on the fee situation (6 January, 2020) which says ‘the Welsh Government will provide support to EU, EEA and Swiss nationals who benefit from citizens’ rights under the various withdrawal agreements.’

The European Union statement on Citizens’ Rights under the Withdrawal Agreement says that ‘The Withdrawal Agreement protects those EU citizens lawfully residing in the United Kingdom, and UK nationals lawfully residing in one of the 27 EU Member States at the end of the transition period.’ This does not, however, include EU students who are resident in the EU.

The ‘citizens’ rights’ question relating to fees was also answered by Michele Donelan in October 2020 when she indicated that “current EU principles of equal treatment will continue to apply for those covered by the citizens’ rights provisions in the Withdrawal Agreement”. It is difficult to see that the Welsh statement makes allowances for a significantly wider group than has already been accounted for in England. The devil, as always, is in the detail and the intentions of Governments are not always clear so I would be very happy to have authoritative guidance on the issue and whether the statement from the Welsh Government makes a material difference.

Legal, Moral or Ethical?

A material change in legislation would, of course, save the blushes of English universities currently planning to discriminate in favour of EU students against other international students. But it would not save the moral dilemma of advantaging students from Europe over those from Asia, Africa and the Americas. Neither would it satisfactorily respond to international students who have long held the view that they are exploited by universities to subsidize home students.

What the THE did write about on 6 January was that UK universities were ‘‘weighing options’ on EU Student Fee Discounts”. In the article Smita Jamdar, head of education at Shakespeare Martineau, suggests that “in my mind there’s a question over whether ‘EU national’ really is a nationality-based discrimination”. There is also a suggestion that transitional arrangements could be considered a proportionate response to the changing situation for EU students.

It’s all interesting stuff that will play out over the coming year but thus far the vast majority of universities have decided to charge EU students international fees for 2021/22. When a university chooses to significantly increase the price of a course from year to year there are not usually ‘transitional arrangements’ for new students. It is also difficult to argue that EU students have not had fair warning of their likely change of status given the Government’s General Election promise to complete Brexit.

It really is about time that the organizations with an interest in students – Office for Students, National Union of Students, UKCISA and others – got to grips with the situation. Clarity would be a very good thing but so would some considered responses on how differential pricing is equitable even as a transition measure. At the very least, universities might be challenged to indicate the timetable for any transition rather than allowing a systemic, divisive and discriminatory system by default.

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Jeopardy for UK Universities – Part 2

Responses to an earlier blog showing that, post-Brexit, a number of UK universities would continue to offer all European Union students preferential tuition fee status over international students suggested it was worth digging deeper. It’s also worth considering what the consequences might be if a group of international students or the National Union of Students decided to test whether a university’s blanket discount for EU students was discriminatory. The recruitment implications for pathway operations if some university partners provide preferential fees for EU students is another dimension for consideration.

Research on university websites suggests that universities planning to give EU students the same tuition fee as UK students in the 2021 academic year include:

Bedfordshire	Buckinghamshire
Solent	Leicester
West London	Royal Holloway
De Montfort	Portsmouth
Oxford Brookes	Nottingham Trent

In most cases the intention is clearly stated but there are more subtle versions of preferential pricing such as the University of Gloucestershire where details are buried in the 2021/22 Fee and Bursary Policy (on page 14 of 19). It notes that “The International Grant Award is a tuition fee waiver of £3,000 deducted from your first year’s tuition fee” while the “EU Grant Award is a tuition fee waiver of £3,000 deducted from each year”. So, an EU undergraduate student on a three-year degree course gets the benefit of an additional £6,000 of grant “automatically awarded at the point of offer”.

Some of the university websites are so Delphic or poorly organized that it is difficult to confirm their position one way or another so the list may not be comprehensive. At least 13 universities reviewed do not seem to be in a position to show fees for 2021/22 or say they are awaiting further information from the Government. These include some surprisingly big players:

Coventry	Northumbria
Cambridge	Liverpool
University of the Arts, London	Brunel*
Queen Mary	Loughborough
Greenwich	SOAS
Brighton	Hertfordshire
London South Bank

*A source has indicated that Brunel are offering the same rate to EU as Home students in 2021 but I am unable to verify this on the website.

The legal consequences seem ill-defined and it remains possible that last minute Government action might change the situation. Scotland has already decided that post-Brexit it could not legally continue to offer EU students the same, free tuition as Scottish students. Edinburgh University is publishing 2021/22 fees that have three rates – those for Scottish students, Home/Rest of UK, and International/EU. This would suggest that the university sees little room for manoeuvre in maintaining even the Home/Rest of UK for European Union students.

Legal analysis is very thin on the ground with the Time Higher Education article by Elizabeth Jones of Farrer and Co being an exception and the piece does not run to exploring remedies that might arise if the differential fees are illegal. The university would, presumably, be obliged to honour its contract with the EU students to charge them at home rates so could not change that arrangement. If that is the case then it is possible they might be required to reduce fees for all other international students to the same level.

As an example, the difference for De Montfort would be around £5,000 a year per student. HESA data for 2018/19 indicates that the University had 1,020 EU and 2,025 other first degree, full time international students so, if one took a third of the latter number that could suggest around 675 first year international undergraduate students and, therefore, a potential cost of £3.375m a year in lost fees if they had to be charged at the lower rate. There are many ‘ifs’ involved in the calculation and I am happy to make any corrections needed if an authoritative source is able to say how much is at stake.

There’s also the interesting matter of what international students who are attending a course with a commercial pathway provider have been advised about their fees. Just as an example, De Montfort is aligned with Oxford International Education Group (OIEG) which offers an integrated degree – the student can either study an International Year Zero (IYZ) and then go on to do three years with the university or an International First Year (IFY) and go on to do two years with the university.

The point is that the OIEG website shows the “International or Tier 4 Visa students” fee for IYZ at £14,995 for 2020/21 and 2021/22 and for the IFY at £14,995 in 2020/21 rising to £15,995 in 2021/22. EU students on the same courses are being charged £9,250 in 2020/21 and the 2021/22 fees are not yet announced. Commercial providers in a similar situation may soon have to choose whether to continue to offer wholescale preferential rates on the basis of nationality.

Some pathway operations have grown large numbers of EU students into their operation with the lure of being charged the same as Home students when they go on to the university to complete their degree an important sales points. For example, the 2018 QAA Report on the Navitas pathway operation with Anglia Ruskin University (ARU) noted, “The significant growth in student numbers at the Cambridge College, based on recruitment of home and EU students, is a trend that the Provider is looking at in relation to other colleges.” Individual course pages suggest that ARU is currently planning that in 2021/22 EU students will be considered international but that could be tested if other universities and their partners appear to be successful in their recruitment efforts with preferential fees.

It would be good to see the UK Government confirm its position so that UKCISA and universities have to provide certainty to students about the fees they will pay. This is also a moment where the NUS could step up to ensure that international students are being treated equitably. The current situation was wholly foreseeable and organizations that are meant to have student interests at heart are only noticeable by their absence.

If universities offering lower EU fees are successful in their recruitment efforts it does not take a great leap of imagination to see how this could become widespread across the sector. It would mean universities choosing (rather than being obliged by Government) to embed preferential treatment based solely on nationality into their recruitment processes. That seems an unfortunate consequence which should be challenged at the earliest opportunity.

Jeopardy for UK Universities Giving EU Students Financial Preference

Anyone who thought that “Brexit means Brexit” or that all UK universities would accept that EU students no longer have special protection on tuition fee levels should think again. Some institutions are publicizing that EU students starting in Autumn 2021 will pay Home student fees for the duration of their studies. Some suggest it may be illegal and for international students from other countries it will reinforce a suspicion that Euro or Western-centric policies, pricing and priorities continue to prevail in some English institutions.

The straightforward fact is that if you are a student from China, India, Nigeria, Brazil, Canada or anywhere outside the EU, there are at least six universities in England who have decided to charge you a significantly higher tuition fee to sit alongside an international student from a European Union country in the 2021/22 academic year. It is a distinction not based on that student’s language capability, their government’s contribution to English higher education, their intelligence, or their capacity to pay. The privileged treatment applies, without any form of means testing, to students from some of the wealthiest countries in the world.

A review of the 40 English universities with the most European Union students (HESA, 2018/19) shows that five have either maintained EU rates at the same level as UK students or put in place special ‘scholarships’ that have the same effect.

University	Number of EU Students	University Statement
Bedfordshire	1,725	Approved-schedule-of-mainstream-fees-2021-22-081220.pdf (beds.ac.uk)
Solent	1,310	Following the UK government’s confirmation that EU students will no longer be eligible for home fee status benefits, we’ve made the decision to keep EU tuition fees the same as UK tuition fees for 2021 entry.
West London	1,240	No statement – shown on fee schedules
De Montfort	1,175	DMU recognise the challenges this brings for our prospective EU students, and therefore for undergraduate EU students commencing their course in the academic year 2021/22 an automatic discount will be applied to reduce their undergraduate fees to £9,250 for the duration of their course.
Portsmouth	1,120	If you’re an EU, EEA or Swiss national or an EU national with settled status in the UK, starting a course in the academic year 2021/22 or later years, you will no longer be eligible for the same fees as UK students. You’ll pay the same fees as an international student. But a Transition Scholarship will be applied to your fees reducing them to the same amount as UK students.

A sixth, the University of Kent, which dubs itself “The UK’s European University”, has put in place a blanket 25% reduction on the international fee level. Seven others currently either indicate that they cannot confirm fee liability or do not have any 2021/22 academic year fees shown on their websites. Among these is Coventry University which, with over 3,600 EU students in 2018/19, has a lot at stake.

Beneath the top 40, Royal Holloway, University of London, was among the first universities to indicate its intention to maintain EU student fee levels in 2021/22. Their online statement suggests good intent as they note, “At Royal Holloway, we wish to support those students affected by this change in status through this transition. For eligible EU students starting their course with us in September 2021, we will award a fee reduction scholarship which brings your fee into line with the fee paid by UK students.” The institution is keeping its options open for the 2022 intake and a cynic might suggest it will see how enrollment goes before deciding whether to extend the reduction.

While the argument about support through transition sounds good universities do not, generally, take on wholesale financial risks incurred by students as circumstances change. Students often find that the currency exchange rate goes against them during the course of undergraduate study, in the case of Indian students by around 18% between September 2017 and July 2020, but universities don’t cover the cost. Giving a blanket dispensation on fees to favour students from 27 countries is unheard of and a cynic might argue that it is driven by enrollment objectives more than anything else.

It also raises the question about the nature of the cross-subsidy that non-EU international students might be giving to the new class of “EU international” students. The Migration Advisory Committee report of September 2018 made the point that, “There is no doubt that international students offer positive economic benefit, including cross-subsidising the education of domestic students and research.” This suggests that allowing EU students to continue paying “home” fees will mean that their full-rate international student peers will be subsidizing them.

Relatively little has been written about the legality of this type of favouritism for one group of international students over another. In July 2016 Elizabeth Jones, a senior associate at Farrer & Co, wrote for Times Higher Education that “Universities are required by the Equality Act 2010 to treat students in a way that does not discriminate on the grounds of any “protected characteristic” such as race (which includes nationality), age, sex and disability.” She noted that providing students from the rest of the EU with the same fees as UK “home” student fees was, at the time, an allowable exception because it was mandated by legislation.

A statement by Michelle Donelan, Minister of State for Universities made it clear that this mandate no longer existed. “Following our decision to leave the EU, EU, other EEA and Swiss nationals will no longer be eligible for home fee status…for courses starting in the academic year 2021/22.” In July 2020, Gerrit Bruno Blöss, CEO of Study.eu, commented on the damaging impact this could have but noted that, “A few institutions are also evaluating potential legal loopholes to charge different fees.” Perhaps they found them or simply decided that nobody would notice or dispute their decision.

The UK Council for International Student Affairs (UKCISA) is simply publishing Donelan’s statement and reflecting that further guidance on regulations from Government may not come before the Student Loans Company (SLC) system launch in February 2021. It is surprisingly coy, given its remit as “the UK’s national advisory body supporting international students” about whether maintaining a significant price differential between two groups of international students is fair, decent or appropriate. It claims every UK university as a member and must know that some institutions are publicising their 2021/22 academic year pricing strategy on that premise.

UKCISA’s 2020 Policy Position Paper notes that a key part of delivering a world class student experience is communicating “a clear message of welcome to all international students in the UK, at every level of study”. That seems quite difficult if the system becomes underpinned by preferential treatment for students from the EU without real clarity on what makes such exceptions equitable or even reasonable. This is particularly so when so many other institutions have made it clear that the ‘international’ fee will apply to EU students from the 2021 academic year.

Perhaps unsurprisingly, the Office for Students (OfS) is silent on the issue. It has been pointed out elsewhere that the OfS shows a level of disinterest in whether international students get value for money from a UK education. Perhaps they could provide comparative information to at least fulfil their promise to “ensure that all students are provided with the necessary information, advice and guidance so that they can make informed decisions about where and what to study.”

It’s also not clear where the National Union of Students stands on this anomaly. Back in 2013 their position was that, “It is scandalous that non-EU students are charged fees that can be thousands of pounds higher than those for other students.” One would think that they would at least expect everyone designated an international students to receive equal treatment from universities.

With the pandemic and Brexit diverting attention it may not seem important that a handful of universities have gone out on a limb to preserve a point of privilege for EU students. But reputation is hard to gain and easy to lose. It’s time for the UK authorities to clarify the situation and possibly for Messrs Sue, Grabbitt and Runne to become involved.

NOTE

In principle I am in favour of all education being free and would welcome a situation where universities were able to focus only on teaching, learning and research in the interests of students and broader humanity. This blog reflects the realities of international student fees and the potential for preferential treatment to emerge when universities make decisions driven by economic factors.

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PIGS TO PETTICOATS TO PATHWAY PROBLEMS

INTO’s London-based joint venture with Newcastle University is the second of the pathway provider’s high profile university partnerships to come to grief at the Middlesex Street building near Liverpool Street station. The location was also the home of INTO’s venture with the ill-fated London Academy of Diplomacy, led by Joseph Mifsud who became infamous for his involvement in Robert Mueller’s enquiry into President Trump. It’s reasonable to say that the site has seen more than its fair share of false starts, big ambitions and strange bedfellows – there’s even a Princess at one point.

The timeline of occupants, the financial fortunes of the joint ventures and the variety of pre-university, undergraduate and master’s courses offered suggests that making a success of a London venture is tricky. There are many potential downsides to higher education investment in one of the most expensive cities in the world. When ambience fall short of a true campus experience, facilities are limited and university faculty are more committed to their home towns it can be particularly hard going.

A run through the various occupants of Middlesex shows that even well ranked partners with global reputations might find it too difficult or too expensive to make things work. The dates of operation are taken from public documents but may reflect a difference between an entity being incorporated and its first intake. Any authoritative updates are welcome.

INTO University of East Anglia, London (2009-2014)

INTO UEA (London Campus) LLP was established as a joint venture in 2009 to provide academic and language courses, primarily to international students, at a purpose built study centre in London. The intention was to offer pre-university courses along with “graduate and post-graduate courses taught by UEA academics”. But UEA’s 2011/12 Financial Statement suggested that things were not going to plan and noted, “Trading to date is slightly down on the original plan, reflecting a slower build up in student numbers than originally anticipated.”

The University’s 2012/13 Annual Report comments, “In light of the current trading performance of INTO London, and the fact that accumulated losses will not be recouped for some time, the University made a capital investment of £3,000,000 in the joint venture in August 2013.” An operating loss of £1.2m in 2011/12 had followed one of £2.5m in 2010/11 for the joint venture. By early 2014 UEA had decided to retire at the end of July 2014 to focus on delivering teaching and research, “at our superb Norwich campus,”.

INTO City, University of London (2010-Current)

INTO City began trading in 2010 and focuses on pre-university courses. By 2015 the joint venture had net current liabilities of £5.8m and its annual report noted “material uncertainty which may cast significant doubt upon the LLP’s ability to continue as a going concern.” Discussions were ongoing to reduce the charges from each partner, clarify governance and recapitalize the venture.

The outcomes suggest a rebalancing of risk and reward reflected in City’s 2018/19 Financial Statements which note that, “Prior to 1 September 2017, a 50 per cent share of the net assets and liabilities was included in City’s balance sheet and 50 per cent of its net income was reported in the consolidated income and expenditure account. Since 1 September 2017, City’s share of net income has been reduced to 15 percent.” Always worth remembering that universities are primarily interested in pathway providers because of the income they receive from students who progress to full degree courses. This may be a reason that City gives equal prominence on its webpages to the pathway arrangement with Kaplan International College

London Academy of Diplomacy (2010-2016)

In an impassioned blog in 2013, UEA visiting lecturer Barry Tomalin advocated, “Don’t Let Diplomacy Fail”, to students at INTO’s London Academy of Diplomacy (known affectionately as “LAD”). Under Professor Nabil Ayad, LAD had been with the University of Westminster, but from 2010 its degrees were validated by UEA and it operated out of Middlesex Street. Another INTO partner, the University of Stirling, took over validating the Academy’s awards in 2014 by which time Professor Joseph Mifsud was Director of LAD.

Brig Newspaper does a decent job of explaining the story of the “academic who attempted to connect the Trump campaign with Vladimir Putin” and INTO’s role with the Academy. It highlights that LAD was closed in 2016 “citing financial difficulties” and an article in the Diplomat suggest that the Academy had 150 students in 2014. Sufficient to say that the University of Stirling’s London-based activities arising from its joint-venture with INTO, whether with LAD or the short-lived Master’s program at a different site in the capital, no longer exist.

INTO Newcastle University London (2015-2021)

The Newcastle University London joint venture had an inaugural intake in 2015 and offered both pathway and degree courses. Opened by HRH Princess Eugenie, a Newcastle graduate, in October 2015, it held the university’s aspirations that, ”..in collaboration with INTO, our London campus is expected to grow to 1,200 students.” By 2018/19 the venture had grown to 504 enrollments but its operating losses had reached £2.4m.

Council minutes from the University indicate that discussions and negotiations about the future of the joint venture had been ongoing during most of 2019. By April 2020 the University’s Council noted “that there was a compelling case to suspend undergraduate recruitment in 2020 on the grounds of insufficient applications, and judged that the consequences of the COVID-19 pandemic would make future viability even less likely.” It seemed a short step from there to the recent announcement that the joint venture would close next year.

INTO London World Education Center (“WEC”) (2017-Current)

WEC is a wholly owned operation of INTO’s which began operations around 2012/13 and offers pre-university courses for international students. The student outcomes are accepted for consideration for entry by over 100 UK universities. The accounts for 2015/16 noted an expected move to Middlesex Street which would “represent a more desirable study location” than its previous home on Mile End Road but this appears to have been delayed until 2017/18.

Year one at the new location saw a rise from 123 to 157 students but 2018/19 saw a decline back to 126. WEC’s operating loss grew from £1.9m to £2.4m year-on-year across the two periods. WEC’s debt to other INTO group undertakings also appears to have risen to £8.9m in 2019 from £5.6m in 2015.

London – A Golden Opportunity or a Battle for Survival?

The chequered history of the Middlesex Street pathway operation matches the shifting sands of the location. The Street was known as Hogge Lane in the Middle Ages because pigs were fattened up in the surrounding fields to feed Londoners. Ryther’s famous map of 1608 records a name change, with Hogge Lane becoming Peticote Lane (with the spelling later being standardised to ”Petticoat”) as the area had become known for merchants’ selling second-hand clothes. Petticoat Lane Market became one of the most famous in London, but around 1830 prudish authorities thought it unseemly to have a thoroughfare named after an item of women’s underwear and it was renamed Middlesex Street.

Shakespeare is quoted as saying, “I hope to see London ere I die” and many universities and pathway operators have set their sights on the UK capital in the belief it is an irresistible magnet to international students. And Benjamin Disraeli, twice British prime minister in the 1800s, said “London is a modern Babylon” which suggests its history as an appropriate location for language-oriented pathways. It is certainly possible to see pathway successes in London, with an example being the Kaplan International Centre which continues to add to an illustrious list of partner institutions.

But with the fallout from Brexit, the potential resurgence of a more friendly US international student experience, and all the uncertainties of a post-pandemic world the future for London-based education is far from clear. Expensive buildings and accommodation, limited commitment from faculty to travel to London and low progression rates from a London pathway course to a distant campus are all obstacles to be overcome. It could be that legendary punk group The Ruts summed up the future for investors best when they sang, “Babylon’s burning with anxiety”.

NOTES

1. Information relating to joint venture finances is taken from the filings at Companies House (INTO UEA (London Campus) LLP (now INTO London Mdx Street LLP, INTO City LLP, Newcastle University INTO London LLP, and INTO London World Education Centre Limited.

2. Commentary on the ventures at Middlesex Street has been taken from official records but it is a complex history. Any corrections, insights or updates from sources that can be validated are welcome. They will be noted and credited on this blog.

Image by TeeFarm from Pixabay

US Pathway and University Enrollments Looking Grim

Early signs are showing the scale of decline in Fall 2020 international enrollments in the US and how pathway enrollments may be even more disappointing. Everyone has been expecting a deterioration in numbers and it comes after several bruising years where many pathway providers have closed operations. INTO University Partnerships and Shorelight are the dominant players in a troubled market and their partners at Colorado State University and Auburn University make it possible to drill down to pathway level.

It’s an early snapshot of what is likely to be happening around the US in Fall 2020 and also an indicator of what the pathway pipeline of international students looks like. It makes for sombre reading if you are a big player in the US pathway business and represents a financial blow on two fronts. Low enrollments make it difficult to run the pathway profitably or get any contribution to overhead. It also means several years of lower income the operator gets from its percentage of tuition fee per student in the university in succeeding years.

INTO CSU and Colorado State University
At Colorado State University (CSU) the overall international numbers have been dropping slowly for a couple of years. But Fall 2020 total enrollments dropped 22% year on year. Longer term pain may be signalled by the declining pipeline from its pathway partner.

Source: Colorado State University Institutional Research Planning and Effectiveness

Since Fall 2017 the number of undergraduate and graduate enrollments in the INTO pathway at CSU has declined by 54%, but in absolute numbers the drop in enrollments of 42 students (35%) from Fall 2019 to Fall 2020 has been the largest ever. Graduate enrollment declines are outpacing those of undergraduate students but both are falling sharply.

Source: Colorado State University Institutional Research Planning and Effectiveness

It’s worth remembering that INTO closed its pathway business with Marshall University earlier this year. This was covered in a blog back in March 2020, with the growing levels of inter-company debt between INTO University Partnerships and several of its US pathways explored in a May 2020 blog. Colorado State University was near the same inter-company debt level as Marshall, and it seems unlikely to get any better after this year.

Shorelight and Auburn University
Auburn had been showing healthy growth and outperforming most US universities for several years. But total 2020 Fall enrollments are down by 18% on 2019. Underpinning this is a 21% drop in Chinese students whose numbers have fallen from 1881 to 1489 year on year.

Auburn University Enrollments by Country – all colleges/schools, departments and primary majors

While an 18% drop in total enrollments might not be too bad a result in the current year it does not look as if Auburn will be able to rely on Auburn Global, the partnership between Auburn and Shorelight, for stability or future growth. There has been a 69% drop year on year (384 to 119) in enrollments on four key Auburn Global programs. Perhaps more troubling is that this number is driven by a 66% decline in the number of Chinese students enrolled in the programs (325 to 109).

Auburn University Enrollments by Country – Auburn Global – Academic, Extended, and Masters Accelerator Programs (First and Second term)

It’s reasonable to add that Auburn and Shorelight are working hard to promote an online option starting in October. This is positioned as offering “the perfect solution for international students who would like to earn academic credits virtually this fall”. Students can earn 9-12 credits on the Academic Accelerator Program and 7-8 credits on the Extended Accelerator Program. They will work through Zoom and pay the same price as on campus students.

Long term observers of the global recruitment business know that there is an ebb and flow to country performance but it cannot be easy for private pathway operators trying to satisfy private equity holders when a market looks to be in free fall. Huron appears to have backed its investment in Shorelight with a further infusion of $13m in the first quarter of 2020 but that was pre-pandemic. There seems to be a lot riding on the possibility of online delivery being attractive to students but that remains an unknown quantity.

By way of a contrast the UCAS data on UK university international undergraduate acceptances suggests students are already voting with their feet. International students placed in September 2020 were up 10% (4030) to 44300 with students from China up 27% to 12980. There’s still plenty of uncertainty around and the growing number of coronavirus cases on university campuses may bring the party to a grinding halt. But, for now, many universities are chartering planes to fly students into the country to bolster their chances of turning enrollments into attendance.

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Canadian HE Pathways – An Open then Shut Case?

The recently announced ten-year contract between Ryerson University and Navitas raises questions about the fate of pathway discussions with the University of Western Ontario (commonly known as Western). The interest of both universities may also be indicative of emerging financial pressures that could make Canada a land of opportunity for pathway operators. But some recent closures suggest it’s not always going to be plain sailing in “the True North strong and free”.

Even before the pandemic, there was increasing pressure on university budgets in Ontario, Alberta and Manitoba. Alberta plans to reduce post-secondary institution funding by 20 percent over three years and Ontario plans to make up to 60 per cent of funding tied to performance-based metrics over time. This has echoes of the State budgetary cuts that forced many public US universities to consider, and in some cases work with, commercial pathway operations.

But there is evidence that even in Canada pathways groups will have to pick their partners wisely to achieve sustainability. Study Group’s partnerships with Stenberg College and the Center for Arts and Technology were announced in February 2019 but will not be admitting students after the Fall 2020 intake. They do not seem to have flourished despite Canada’s general popularity with globally mobile students.

Western May Need “Urgent Assistance” To Recruit

For anyone who thought that life was good for the university sector in Canada the specter of budget cuts and performance-based metrics may come with a touch of schadenfreude. There seems little doubt that Western has had to take the matter seriously and that its achievements in attracting international student interest have been limited. Fortunately for those who are interested the debate in the university is played out largely in public documents.

At Western’s March 2020 Senate meeting the President, when asked when the Navitas proposal might come to Senate, “indicated the timeline had not yet been determined. If the University needs urgent assistance to recruit students that could impact the timing of the proposal.” Western’s international enrollment has been patchy with their 2018-19 their international first year undergraduate intake being 855 compared to 508 in 2015-16 but then dropping back to 639 in 2019-20. Perhaps more troubling in terms of concentration was that 75% of the 2019-20 intake was from China.

A potential block to any deal was the reminder that, “Senate notes that the potential partnership with Navitas involves the academic work of the University, which explicitly falls under the remit of Senate in the UWO Act; and therefore the articulation agreement/partnership/credit transfer/affiliation agreement/ contract to engage in the academic work of Western must come to Senate for approval.” In the manner of university turf-wars a representative of the Operations/Agenda Committee then noted “that it would support details relating to the academic components progressing to Senate, with the financial arrangements not being within Senate’s remit.”

For those who enjoy the knockabout nature of university meetings the minutes are well worth a read and particularly so at S.20-59 where Question 2 noted that Navitas had agreements with Simon Fraser University and the University of Manitoba. The discomfort was evident, “should Western proceed with a partnership with Navitas when two and possibly three other Canadian universities have such partnerships (which will make us one of four Canadian universities for which those vaunted Navitas recruiters are recruiting, so not obviously set apart from the other Canadian universities)”.

Sadly, and perhaps because of the pandemic, no further Senate meetings have been reported this year so it is difficult to say whether discussions went any further. But Exhibit IV, Appendix 4 of the February Senate Agenda outlines the enrollment background and the shape of the Navitas deal being proposed. It’s also worth noting that Ryerson might have insisted that Navitas do not engage another Ontario partner in the near future so Navitas’s loss could be someone else’s gain.

The Bigger Picture and the Potential Trap

Anyone following developments in Canada will have seen the explosive growth in international student enrollments. That has been tracked by the desire of pathway operators to find a way into the market, and Navitas appears to have got a small edge. But the Ryerson deal and Western’s apparent need or willingness to engage may suggest we are seeing the thin end of a wedge that will see more Canadian universities joining with commercial partners to drive their international growth.

Movement in recent years has largely been in what may be considered secondary brands and non-degree bearing institutions. A recent announcement saw GUS expanding its Canadian network with the Trebas Institute but the Study Group experience noted above is a cautionary tale. Perhaps this is a good moment for all investors to pause and consider the history of pathways in North America.

Some believe, along with Marx, that history happens the “first time as tragedy, the second as farce”. The United States was considered the El Dorado of pathway opportunities for several year with over a $1bn of private money flowing into expansion and start-ups. The recent, rapid decline of pathway numbers, with more than ten closing in the past year, suggests that there is virtue in considering how to position yourself to be sustainable over the longer-term.

However, a resurgent United States could rapidly reassert its dominant position over Canada in terms of attractiveness to international students. It would not take much for a loosening of visa constraints, an improvement in post-study work availability and a more welcoming administration to turn things around. It is a reasonable bet that the change in post-study work opportunities in the UK has already slightly dampened interest in Canada as a destination.

Seasoned observers of international student mobility know that what goes round tends to come round. Just as the step back taken by Australia and the UK in the early 2010s helped fuel growth in the US it seems reasonable to believe that the current US situation is helping to drive interest in Canada and the UK. Quality universities will always recruit best under difficult conditions, so the right answer is to build a portfolio of decent brands and acknowledged specialist institutions while having a fall-back position for students who don’t meet those standards.

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US PATHWAY SECTOR FACES DOUBLE WHAMMY UNDER ENROLLMENT PRESSURE

It appears that the cull of pathway operations in the US has further to go. The Navitas website suggests that Global Student Success Programs at UMass Lowell, UMass Dartmouth and Florida Atlantic University have been discontinued. All of them throw up the message, “The Global Student Success Program is no longer accepting new applications..” * It’s the same story for Virginia Commonwealth University and the University of Idaho links.

Looking more deeply, the figures from UMass Lowell show a precipitous drop in Navitas enrollments from 187 in Fall 2016 to just 81 in Fall 2018. The numbers for 2019 aren’t available on the university site but a further dip seems likely. If these are permanent closures it brings Navitas down to three pathways in US from eight at its peak. Overall, the number of on-campus pathways in the US may have fallen to around 40 and its little wonder some are making a “pandemic sales pitch” that they are really masters of online technology.

With the pressure on US international enrollments growing year by year it’s difficult to see that there is a lot of good news to come. Rumours abound and are difficult to verify but in recent weeks I’ve been told of a pathway run by one of the big two operators at a top 200 east coast university that is looking at a 70% decline in enrollments year on year. It’s a very long way from the suggestion made in 2014 by Parthenon Group partner Karan Khemka, that “We anticipate that growth will be constrained only by the pace at which private providers can develop the market.”

We are seeing a wholesale realignment of the pathway sector but alongside that there may also be a double whammy as universities seek to renegotiate commercial terms in the light of changing market conditions. For example, the University of South Carolina Board of Trustee minutes from April 2019 make for interesting reading as they reflect on the changing nature of the university’s deal with Shorelight. The initial deal had been signed for seven years in 2015 and the proposal was to re-sign for another seven but with “better financial terms for the University”.

One big shift indicated was that USC would be allowed to keep 90% of the tuition paid by students in years following the pathway and pay Shorelight 10% of the tuition. Under the initial agreement the split was 83% to USC and 17% to Shorelight, so on an out of state, undergraduate student fee of $16,700 that’s a cut of just over $1,100 a year per student. It’s worth remembering that Shorelight noted early in their history that, “not only does the university not contribute anything upfront to get the program off the ground…but Shorelight reimburses the university for any expenses as it’s getting off the ground.”

The obvious question for traditional pathways is how they remain sustainable when the university is bearing none of the start up costs, and if the provider’s revenue share from students going into the university is being reduced. In a recent blog I looked at the growing inter-company debt between INTO University Partnerships and its US pathways where, the collective debt owed by five joint ventures open for at least five years, had from under $5m to nearly $15m. The closure of the pathway at INTO’s partner Marshall University came as enrollments fell and inter-company debt rose sharply.

While $1100 a student doesn’t sound very much the real point is that this becomes a loss of $110,000 a year if you have 100 students progressing and $330,000 over the lifetime of the cohort. Add to that the increasing cost of acquisition of each student as global competition increases and the basic economics of a pathway come under serious pressure.

It also raises the question as to how sustainable are the remaining pathway operations as the US faces another bleak year for international enrollment. A recent Open Doors survey reported 52% of US universities indicating a decline in enrollments for 2020. Navitas research with agents recently suggested that declining student mobility and growing unpopularity could see the US lose between 160,000 and 350,000 international students.

Alongside the well-known and longer-term internal issues facing students who might previously have seen the US as their preferred option there is little doubt that competition is playing an increasingly important role. The UK has made good headway and become a more popular destination this year which has led to an increase in undergraduate enrollment from China of 14% this year. Canada continues to provide an attractive option with clear routes to citizenship that have been particularly successful in attracting Indian students in recent years.

Supply and demand are powerful and remorseless market disciplinarians. The dash for growth in the US pathways came supported by over $1bn of private money flowing into the sector, but the economics of creating more and more supply at a point when demand was slowing have become evident. With global competition for students increasing, student mobility threatened and universities finding alternative means of reaching the market – particularly online – it’s probably a hard road ahead.

*As always I am happy to have authoritative corrections or clarifications and will record them.

Image by Gerd Altmann from Pixabay

No Easy Pathways – Even Before the Pandemic

As a relief from the global pandemic, it was interesting to take some time to look a little harder at recent developments from the Study Group, Shorelight and INTO camps. It’s a further reminder of how the US pathway sector was climbing a mountain even before the pandemic brought new challenges to international student enrollments.

Study Group

Study Group looks to be adding to last year’s closures in North America with pathways at both Royal Roads in Canada and the University of Vermont shutting down. Both institutions are still featured on the Study Group website but there is hard evidence in once case and strong rumour in the other. As ever, I’m happy to accept an authoritative response and correction if this is incorrect.

Minutes from Royal Roads Board of Governors meeting dated March 31, 2020 state: “The Study Group partnership was entered in 2011 to deliver preparatory pathway programs and expand international student recruitment into university programs. Following a formal review, a decision was taken to not renew the contract when it expires August 2020…….. A team will be struck in early 2020 to manage the transition to wind down the partnership by August 31.”

The change comes as Royal Roads posts some interesting statistics about its international student enrollment expectations. From 577 international student FTEs in onshore credit programs in 2018/19 they are forecasting 1,012 in 2020/21 – an eye-watering 75% growth. The expectation is spelt out very clearly “…with revenue increasing by $4.5M (35%) from $13.0M in 2019/20 to $17.5M in 2020/21.”

While there’s no institutional announcement, strong feedback from the market suggests that the Study Group relationship with the University of Vermont will come to an end later this year. The partnership started in early 2014 with the stated aim to ‘recruit approximately 140 international students per year with a two-term pathway sequence’.

The University doesn’t give exact details on the Study Group contribution but over the five years total Fall international enrollments rose to a peak in 2017 and fell back below 2015 levels in 2019. Non-degree international enrollments peaked at 171 in Fall 2015 and have declined since to 88 in 2019. It’s a story that’s been hear all around the US but it’s worth remembering as a sign of the times that this is a University ranked 121 by US News in 2020.

This follows Study Group’s announcement of three pathway partnerships closing in 2019 at the universities of Roosevelt, Widener and Merrimack and the closure of the Oglethorpe University pathway earlier in 2020. For those trying to keep up here’s the list (with closures highlighted in red) which includes DePaul and Hartford taken over from EC Higher Education in 2019.

Shorelight

Shorelight’s website suggests that since its first partnerships in the US in 2014, it has grown to 19 partners. The relationship with UMass Boston does not appear to be a traditional pathway (which seems to rest with Navitas). The American Collegiate (DC and LA versions) do not appear on the list of traditional, full-service partners and appear to be short summer programs along with a year-long undergraduate level course through UCLA extension.

Huron Consulting Group Inc. is a long-term investor in Shorelight Holdings LLC (the parent of Shorelight Education) with an initial investment of $27.9m in 2014 and 2015. Huron’s recent Form 10-K filing showed that in the first quarter of 2020 it invested a further $13m. The initial investments were zero coupon convertible debt instruments maturing on July 1, 2020 but that maturation date has been extended to 17 January 2024 which matches the date the new investment matures.

The pathway sector has seen a significant amount of investment in the potential of a strong US portfolio but the growing tensions are stark. In a recent Boston Globe article, Ben Waxman, chief executive officer of International Education Advantage, argued “International enrollment is going to plummet like a rock” due to the pandemic. In the same article Shorelight’s cofounder, Tom Dretler, said the company is still seeing increased interest from foreign students in enrolling in US colleges for summer and fall programs. He noted that universities will have to offer these students a more engaging online experience. Time will tell.

INTO University Partnerships (INTO)

Growing global and in-country competition were probably factors undermining the growth of early INTO success stories like Marshall University. The pathway at Marshall closed earlier this year and leaves INTO with 11 partners in the US. As noted in a previous blog, enrollment to both the pathway and directly to Marshall had been falling for several years.

A look at INTO’s most recent published accounts for the year to 31 July 2019 show that there may be more dark clouds on the horizon. Taking US pathways that have been open five years or more (including Marshall) it is noticeable that the level of debt owed by the joint ventures to INTO has grown from under £5m to nearly £15m. Colorado State University (CSU) and Drew are at or above the same levels as Marshall.

It’s probably a bit early to see the direction of travel for new joint ventures Hofstra, Suffolk or Illinois State. But St Louis University’s level of indebtedness has remained at around the same level for four years, and the University of Birmingham Alabama has moved from owing £895k in its first reported year to £4.96m in 2019. Washington State University has seesawed with a first-year indebtedness of £1.74m followed by a recovery but then a rise back to £1.34m in the latest accounts.

None of this has stopped company founder Andrew Colin from moving up 133 places year on year in the Sunday Times Rich List published this month. What’s interesting is that the Sunday Times valued the business (based on 2017/18 information) at £200m which would suggest that Leeds Equity’s 25% stake was worth £50m. That’s after a £66m investment made in 2013.

Of course, all of this is before the coronavirus and a global pandemic that has created havoc with traditional student choices and may alter global mobility forever. The US was in decline as a destination of first choice for several years before the virus, and there is little to suggest it has risen to the competitive threat. A recent IDP survey showed the US lagging behind on key measures as students are making their decisions.

There is already evidence that Canada and Australia are responding more aggressively to support international student recruitment after the peak coronavirus period. Even the UK had done more to revive its flagging fortunes and was looking towards a bumper intake in 2020. It leaves pathway operators and universities in the US in a very tough place.

Image by Arek Socha from Pixabay

This Time It’s Different Because…

While hoping for the best it is increasingly difficult to believe that the next two years won’t be very tough. The economic news changes by the day and there is still little certainty about the process for removing the various lockdown measures around the world. It is even tempting to not to write until the dust has settled.

A number of commentators have suggested that higher education is counter-cyclical in terms of student growth and refer to the experience of the ‘great recession’ of 2008. But I recently quoted Charlie Munger, vice chairman of Berkshire Hathaway who said of the current situation, “This thing is different”, and I doubt that previous global shocks a good guide to what might happen this time around. For home and international student enrollments this may even be a fundamental turning point.

This is not a counsel of despair. There are signs that many students are still keeping their options open before deciding whether to travel across country or overseas for study. But the backdrop to their decision making and the factors constraining countries, let alone universities, are far more complex than 2008.

….it really is Global

The 2008 recession for the G20-zone (85% of all gross world product (GWP) is often called a global recession which lasted from mid‑2008 until 2009. But while 2009 saw real GDP rates fall in virtually all of Europe, along with Canada and the US, the reality was that China, India, South America and almost all of Africa had GDP growth. The coming recession may be V, W, L or swoosh shaped, but it seems likely that every country in the world will have a dip in GDP this year.

China was never in recession throughout the period of what was called the ‘great recession’ but the first quarter of 2020 saw the Chinese economy shrink for the first time since 1976.

…Established Student Sources May Not Drive Growth

China’s GDP growth was at 14.7% in 2007 and remained above 9% until 2012. Its 20-24 year age group grew by 13 million between 2007 and 2011. These factors fueled international student growth through the ‘great recession’.

According to HESA data, between 2007/08 and 2011/12 the number of Chinese students in UK universities grew by over 33,000 to 78,715. The next largest growth was from India which grew just under 14,000 from 25,905 to 39,090 by 2010/11 before falling back to 29,900 as Government visa policies hardened.

In the US, Open Doors data indicates that 2007/08 was the first year since 2001/02 that international student enrollments had got above 560,000. By 2011/12 the number of enrollments had increased by a further 120,000. China contributed over 100,00 of that increase.

China’s university age population is stable but at lower levels than a decade ago and financial pressure on the middle class was already evident before the coronavirus. Add in the safety concerns and it is little wonder that the British Council found that Chinese students had a high propensity to reconsider plans for the coming year.

…Oil Glut and Increased Production Capacity

In the previous recession oil prices dipped rapidly but recovered within two years. This time round some benchmark oil prices have gone negative early in the pandemic and the global oil glut is considered by some to be similar to the 1980s when prices stayed low for several years. The impact is exemplified by Saudi Arabia’s reduction of $27bn in net foreign assets in just the month of March. Development of technology and the re-emergence of the US as a dominant producer seem certain to make it difficult to constrain production in a way that forces prices up.

It seems unlikely that, in the foreseeable future, any government will be able or willing to fund substantial scholarship schemes driven by oil wealth.

…Quality, Value and Availability of Online Degrees

In 2009 it is estimated that there were 5.5m students worldwide taking at least one course online, but by 2017 it was estimated to be over 6m in the US alone. By 2019, 98% of public universities and colleges in the US offered some form of online program and the University of Pennsylvania had become the first Ivy-league institution to offer a bachelors’ degree totally online.

In the ‘great recession’ the for-profit universities were at the forefront of online education. This time around there is, literally, a world of choice and great brand names available to students. Students wanting to get a degree do not have to incur the health risk, the uncertainty or the extra cost of an on-campus experience.

Online has provided a short-term response to the coronavirus but students may find it a cheaper and more convenient option for future study.

…Cost of Higher Education to Students

Analysis suggests that going to college in the US in 2018/19 was 25.3% (private) and 29.8% (public) more costly than in 2008/09 on a like-for-like dollar basis. Forbes has estimated that between 1989 and 2016 the cost of going to college grew eight times faster than average annual wages.

In England the introduction of £9,000 a year student fees didn’t occur until 2012. By 2019 average student debt on entry to repayment was £35,950 compared to £11,720 in 2009. Rising levels of debt have not, thus far, deterred students in England from going to university but it’s on their minds.

As importantly, universities have been obliged to spend significant amounts on attracting students from less well represented backgrounds. The government debt burden has also been significantly increased as the real cost of student loans was added in late 2019. Faced with the cost of combatting coronavirus and a global recession students, universities and the Government may be less willing to absorb these costs.

The cost of going into higher education has become increasingly difficult for any of the stakeholders to absorb – even before the pandemic.

….Attitudes Towards the Value of Higher Education Degree Have Hardened

UK and the US students have never paid more for their degree and there is some evidence that disenchantment has set in. In 2013, Gallup found that 70% of U.S. adults considered a college education to be “very important,” 23% felt it was “fairly important” and 6% said it was “not too important.” In 2019, those figures had shifted to 51%, 36% and 13%, respectively with even bigger negative shifts seen in the 18-29 age group.

Longitudinal evidence about student sentiment is harder to come by in the UK but this year’s graduating students will be the first under the higher English fee level to come into a world where unemployment is rising. UK unemployment following the ‘great recession’ peaked at just over 8% in 2011. It is likely that the job market will be tough for at least a couple of years.

The value of a degree has always been partly about having choices and career options. The rising cost of education and the gloomiest jobs market for a decade may make potential students rethink their decisions. The UK Government may be forced to reconsider whether Post Study Work visas are creating too much competition for scarce jobs.

…and New Options May Be More Attractive

A recession is likely to focus this argument on the ways a workforce is able to help a country emerge from recession. It is claimed by Upwork that the 20 fastest growing skills on their Skills Index do not require a degree. It notes that in 2018 Glassdoor said, “Increasingly, there are many companies offering well-paying jobs to those with nontraditional education or a high-school diploma.”

Non-traditional education options focused on work skills have grown rapidly and the lockdown may be driving more people in that direction. Udemy has already seen a surge of interest in its online courses, particularly in AI and machine learning. A trend towards skills-oriented learning, whether online or in short-courses, leading to a qualification may become better established.

The safety of university degrees offering shelter from the jobs market for three or four years come at a high cost. It seems possible that the new options available and the scramble to find work or avoid excessive HE costs will drive people towards focused solutions.

This is not an exhaustive list but flags some things which seem materially different this time round. The extent to which institutions are able to adapt and pivot to meet the needs of students and society may determine their ability to survive. There will always be opportunities for the flexible, the creative and those who can offer value for money and the promise of a better future.

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