Open Doors data for 2021/22 confirmed trends that have already become evident in the UK and are likely to shape the future of global student recruitment for several years. It also points to some stark realities for pathway operators that may cast a shadow over any hopes for a post-pandemic recovery in the US. Most starkly, the recovery was marked by the highest ever new postgraduate intake, largely driven by students from India, while new undergraduate enrollment was only just above 2011/12 levels.
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Will China Bounce or Break or Will It Depend Where It’s Dropped?
One of the biggest questions facing pathway operators in the US is whether enrollment numbers from China have reached a low point and will rebound. The overall number of degree students from China enrolled in 2021/22 was 232,674 which was 16.7% down on 2017. Undergraduate enrollments were down 26.3%.
However, the impact is not the same across all states. Consideration of the 25 states with more than 10,000 international students in 2017 shows four who increased the overall number of “Foreign Students in the State” – Arizona, Massachusetts, North Carolina and Maryland. The first two made significant percentage increases from India while the latter two also increased the percentage enrolled from China
By contrast the two states with the largest percentage loss in international students over the five years were Oregon (-42.4%) and Iowa (-34%). Of the 25 states, they had the highest percentage of students from China and in the case of Oregon the second highest percentage was from Saudi Arabia rather than India in 2017. The leading universities in each state – Oregon State University, Corvallis and Iowa State University – lost 26.7% and 30% of international students enrollment respectively.
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*Information from Open Doors Fact Sheets 2017 and 2022. Numbers relate to “foreign students in the state”.
A thoughtfully argued piece in University World News has suggested that a variety of factors could see a significant rebound by Autumn 2025. This is tempered by factors including the growing strength of other recruiting countries and the developing academic quality of Chinese universities. Others have suggested that unpredictable geopolitics, the potential for online delivery and universities desire for diversity may be major factors suppressing demand from China.
Either way it seems an unpredictable future and not something to bet the house on. Certainly, US universities wanting to rebuild their numbers are going to have to think long and hard about products, price points, promotion and graduate employability. It seems possible that as global alternatives increase, recruitment markets change and in-country competition stiffens the role of pathways will come under further scrutiny.
Pathways Poser
Responses by the main pathway operators to changing market dynamics have differed. A previous blog illustrated Shorelight’s pivot from pathways to direct recruitment options but there has been little sign of such significant movement from its main US competitor, INTO University Partnerships (IUP). The situation in Oregon, home to key IUP partner Oregon State University (OSU), suggests that the need for action may be growing.
OSU provides long term, consistent enrollment reporting though its Office of Institutional Research which gives some weight to this thinking. Despite the 2021/22 growth reported in the Open Doors data, OSU did not show international postgraduate growth in Fall 2021. Fall 2022 numbers show another overall decline in international enrollments driven by falling undergraduate numbers and only limited growth in postgraduates.
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*These figures include all INTO Oregon State University (INTO OSU) pathway enrollments except Academic English
The impact of declining numbers from China is evident. Despite recruitment support for direct admits from pathway partners IUP there seems to be limited ability to accelerate enrollment of students from other markets to compensate. While the number of students coming from India to enrol is showing reasonable growth it is starting from a low base.
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Overall enrollment has been impacted by a continuing decline in the INTO OSU pathway operation. Undergraduate pathway enrollments in Fall 2022 were down 80% over five years (and 65% on 2019), while graduate pathway enrollments were down 57% over five years (and 62% since 2019). Total enrollments for INTO OSU have fallen 72% since 2017.
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A previous review of Fall 2022 preliminary numbers from INTO George Mason University showed that IUP’s pathway operation at that university was struggling to bounce back after the pandemic but there was no information available concerning countries of origin. INTO OSU data offers country insights and shows that three of the four main countries of origin have seen declines, with China falling from 581 students to 48 over 5 years (92%). Numbers from India have shown small fluctuations but in Fall 2022 the intake of 16 was the same as in 2017.
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Money Matters
Alongside declining volumes the INTO OSU debt to IUP increases. This is, presumably, all well and good if the joint venture can generate enough pathway enrollments or find alternative revenue streams to pay the debt back over time. However, three of IUP’s US joint ventures have closed in recent years – at Colorado State University, Marshall University and Washington State University – with a fourth, at St Louis University now wholly owned.
The joint venture at the University of South Florida is not currently recruiting and is under threat. Recent court filings have shown that USF Financing Corporation (USFFC) sought a “declaratory judgment that the 2010 stockholders Agreement between USF FC, the Company, and the INTO Defendants is terminated as of April 21, 2022.” The grounds were that the joint venture is “insolvent under both a balance sheet basis and inability to pay debts as they become due, and (b) has demonstrated a material adverse financial position where it could not perform all or a substantial part of its obligations..”.
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*Taken from IUP annual reports up to and including that for the year ended 31 July 2021. Excludes INTO SLU which is wholly owned, INTO USF which is not currently recruiting and INTO Hofstra which the INTO University Partnerships annual report does not record as a joint venture.
**The 2021 Financial Statements of Illinois State University (p.50) note that “INTO ISU has an agreement with its two partners, Global and INTO NA, which allows INTO ISU to borrow up to $6,000,000 in operating capital from INTO NA with an interest rate of 6%…. INTO ISU has outstanding borrowings with INTO NA in the amounts of $6,000,000 and accrued interest of $488,392 for the year ended June 30, 2021.” INTO NA is a wholly owned subsidiary of INTO University Partnership Limited (IUP).
Reflections and Realities
Global pathway operators have many creative, flexible and commercially minded individuals but it’s worth remembering Margaret Thatcher’s dictum that “there is no way in which one can buck the market.” Open Doors provides a picture of 2021/22 but as more universities report on their Fall 2022 enrollments it becomes even clearer that the dynamics have changed. With all four major recruiting countries having relatively benign government policies it is no time to be clinging to outdated models with 2023 recruitment already starting.
Notes
As always the text reflects my understanding of the data. I am happy to receive any alternative thoughts or corrections from authoritative sources.