Month: March 2021

Divergent EU Enrollments Create Opportunity and Risk

My recent blog on the significant underlying shifts in recruitment from China and India provoked some interest in what might be happening in other markets.  Generally speaking, the traditional international student markets are too small to move the needle in quite the same way as the big two.  But the main European Union (EU) markets throw up some interesting trends.

It shows what is at stake for some UK universities, particularly financially, if they begin to lose students from countries where they have made substantial gains in recent years.  This may be, at least in part, an explanation for some of the decisions being taken to discriminate in favour of EU students against other international students by allowing them to continue with home student fees.  It will be interesting to see if there is a legal challenge to this activity or whether such arrangements move from transitional to permanent after 2021.

According to HESA data, Poland, Romania, Portugal and Spain have shown the largest growth in enrollments from EU countries over the past five years.  Numbers from Germany, Ireland and Cyprus have been in decline over that period while Italy and France have seen growing numbers at a lower level.  The January 2021 UCAS data shows a 40% year on year decrease in EU undergraduate applications for entry in Autumn 2021 which is largely driven by the reality of most universities charging them international fees.

TABLE 1: Total Enrollments – Largest Growth Countries    

Source: HESA

But as Table 2 shows the overall numbers do not reflect the pattern of growth from each country with Spain, while remaining the top overall sender of the four, seeing its year-on-year growth rate decline for each of the past four years.  Poland has also seen its growth slowing each year during the same period.  Portugal has grown most strongly for the past three years and Romania has had robust growth for the past two reported cycles.  

TABLE 2: Year on Year Increase in Enrollments – Largest Growth Countries

Source: HESA

The most interesting thing is where the growth has occurred.  Total UK enrollments from Romania grew by 2025 students between 2017/18 and 2019/20 with 76% of the increase going to the universities of Bedfordshire and Suffolk.  It is worth noting that in both universities the overwhelming majority of enrolled Romanian students are full-time, undergraduates which brings significant benefits in terms of stability and income. 

Over the five years Bedfordshire’s enrollment of home students has declined by 600 while EU numbers have increased by 1330.  European enrollments have meant that the university’s tuition fee income from combined home and EU students rose by £20m (27%) between 2018 and 2020.  It is a major achievement for a university ranked 123rd of 130 by the Complete University Guide in 2021.

TABLE 3 – Enrollments from Romania – UK Total and Top Two Universities

Source: HESA

A similar but less extreme situation occurs with enrollments from Portugal where Coventry and Anglia Ruskin have taken 35% of additional enrollments in the past two years.

TABLE 4 – Enrollments from Portugal – UK Total and Top Two Universities

Source: HESA

Enrollments from Poland, where total growth has been declining for each of the past four reported cycles shows a less distinct pattern.  Taken over five years, Coventry and De Montfort have grown their Polish contingent more rapidly than any other universities.  Their combined share of the growth both over the full period and in the last two years is around 23%.

TABLE 5 – Enrollments from Poland – UK Total and Top Two Universities

Source: HESA

Enrollments from Spain appear to be much more evenly distributed with well-ranked universities being to the fore but notable exceptions are Anglia Ruskin and University College Birmingham over the five-year period.  No university in the UK has lost more than 50 students in their enrolled numbers of Spanish students in that time despite the slowing growth.

TABLE 6 – Growth in Enrollments from Spain – Top Ten Universities

 Enrollment 2019/20Increase 2015/16 to 2019/20
Anglia Ruskin240190
Warwick285165
Edinburgh360150
Sussex200130
Manchester325125
University College Birmingham140110
King’s College London340110
UCL375110
Imperial420105
Lancaster225105

Source: HESA

The impact of growth from European Union countries may well be a driver of decisions to continue to offer favourable terms to EU students over other international students in 2021.  However, it seems short-sighted and even counter-productive financially to offer blanket discounts if the main sending markets are limited to one or two countries.  Over the longer term it seems inevitable that less economically advantaged areas of Europe will continue to see advantageous tuition fee discounts if UK universities want to maintain enrollments.

Another factor that may be worthy of consideration is that changes to post-work study visas may  prove attractive to some European Union students even after Brexit.  Portugal and Romania remain below the European average in terms of GDP while Poland and Spain are above it and the opportunity to find work in the UK may continue to support growth.  But we may also have to place that potential against rising unemployment for 16-24 year old’s in the UK (up to 14.3% in February 2021 compared to 11.3% in February 2020) and the economic uncertainties post-Brexit and post-pandemic in summer of 2021.

It seems likely that the story of recruitment from the European Union has several more cycles to play out.  With rising numbers of 18-year-olds in the UK the political nuances of allowing EU students to take places at the same fee as home students while not expanding provision for home students may also bring rising tensions.  There are no easy choices here.

Image by Tumisu from Pixabay

INDIA OVERTAKING CHINA AS KEY STUDENT MARKET MAY BE A GAME CHANGER FOR LOWER RANKED UNIVERSITIES

A year ago seems an age away but in January 2020 I was speculating about how the surge of student mobility from India might change the UK higher education sector in terms of demographics and financial benefit.  At that point I described the HESA data as ‘tantalising’ but with the 2019/20 enrollment data available by country and university it’s clear that things have moved quickly.  And there may also be lessons for US universities to consider as they ponder their post-pandemic international recruitment strategies.

The top line numbers from HESA DATA show that the total number of Indian students enrolled in UK higher education grew by 27960 (101.7%) between 2018/19 and 2019/20 compared to a growth of 20,790 (17.2%) for Chinese students.  For each country the growth in the number of undergraduates year on year was around 8,000 but India had an additional 19,000+ enrolled graduates year on year compared to around 12,000 for China.  It is the first sign of a new order for markets of origin with India sending over 5,000 more first year students than China in 2019.

More importantly, the distribution of Indian students by type of institution has proved to be significantly different to that of Chinese students.  One way to illustrate this is a comparison between the universities that saw the biggest year on year growth in each. It is striking that all of the universities with the greatest increase in the number of Chinese students are in the Russell Group but none of those with the most significant increases in Indian students are in the Group.

TABLE 1: Top Ten overall increases for Chinese and Indian Enrollments between 2018/19 and 2019/20

 Change in total enrolled Chinese student yoy from 2018/19 to 2019/20Change in total enrolled Indian students yoy from 2018/19 to 2019/20
Edinburgh141050
East London-151710
Leeds123545
Bedfordshire301595
Southampton1190-10
Hertfordshire-1351575
Sheffield115015
Northumbria901510
UCL106525
Kingston1601265
Manchester88575
Ulster-151230
Birmingham86010
Central Lancashire-1051180
Newcastle85550
Middlesex-110915
Kings College72550
Greenwich-185840
Nottingham72530
Coventry-85810
Note: To maintain consistency private and specialist universities excluded from table.  Of the private universities BPP registered a year on year growth of 1640 from India but a fall of 95 from China.  The London based University of the Arts showed a year on year growth of 790 from China and an additional 70 from India.

Source: HESA

Digging deeper indicates that location is not the main driver of these vastly differentiated enrollment patterns.  The situation for several cities with two main universities is shown below.  Manchester Metropolitan shows relatively balanced numbers but they are small changes and the differential is swamped by the University of Manchester’s growth in Chinese students.

TABLE 2: Selected cities showing change in university enrollments year on year

 China – student change yoyIndia – student change yoy
Birmingham86075
Birmingham City50800
Nottingham72550
Nottingham Trent-150270
Manchester88525
Manchester Metropolitan5070
Sheffield1150-10
Sheffield Hallam-135185

Source: HESA

What becomes clear is that lower ranked universities are securing a significantly greater proportion of the growth in Indian students.  This supports the notion that the changing importance of the two main source markets could have a major impact on the financial strength in different parts of the sector.  But the underlying drivers of the recruitment patterns are less obvious.      

It is likely that lower ranked universities represent better value for money in terms of fees, accommodation and other costs of study which is likely to be particularly attractive to self-funding students.  There is also a propensity for lower ranked universities to make offers at lower grades which means a less competitive route to selection and enrollment.  Several are located in areas that the UK census has shown have strong communities with contacts in India but that would not explain the differences within cities that have two universities.

The differences in performance are very striking and it raises a number of questions about the longer- term strategy of universities that are not currently recruiting heavily from the Indian market.  It seems possible that as numbers from China stabilise or even go into decline there will be greater competition for the growing numbers from India.  It is probably best for lower-ranked universities to make the most of this moment in the sun but if they have the opportunity to develop a solid local community and optimise their contacts with alumni the impact may be long lasting.

More troubling for some universities might be their failure to recruit strongly from either of these major markets in 2019/20.  There are some well-known names and reasonably ranked institutions that seem to be suffering as the big city Russell Group universities excel in recruiting students from China but who do not appear attractive to students from India.  It is interesting but seems counter intuitive that the two with the greatest loss from China year on year are partnered with pathway operators with traditional strengths in the country.

TABLE 3: Universities with the largest year on year loss of students from China (2018-19 to 2019-20)

UniversityChina – year on year change in total enrollmentsIndia – year on year change in total enrollments
Sussex– 34010
East Anglia– 26040
Hull– 2005
NOTE: I’d like to commend the University of Hull for their experiment in charging postgraduates starting in 2021 the same as Home students. It will be interesting to see how it works out.

 Source: HESA

As noted the University of Hull has embarked on an aggressive marketing ploy to charge postgraduate students the same fee as home students in 2021. As far as I am aware this is unique in the UK higher education system and it will be interesting to see how it works out. It’s certainly better than those universities that will continue to discriminate in favour of all European Union students who are now deemed international but are being allowed home student rates.

For UK universities there is unlikely to be any Government opposition to the growing numbers although experience shows it’s always possible for U-turns in policy.  As recently as 4 March, 2021, Minister for Future Borders and Immigration Kevin Foster said, “As we rebuild from the global pandemic we want the world’s brightest talent, who aspire to a career at the highest levels of business, science, the arts and technology to see our United Kingdom as the natural place to fulfil their aspirations.   The changes announced today will ensure once they have received a gold standard qualification from one of our world leading education institutions they can easily secure the status they need to continue living, working and fulfilling their dreams in the UK.”

It sounds great news for recruitment but I am reminded of a Government statement with the words, “We want high quality international students to come here. We want them to study at genuine institutions, whose primary purpose is providing a first class education. And we want the best of them – and only the best of them – to stay on and work here after their studies are complete.” This statement was made by then Home Secretary, The Rt Hon Theresa May, in 2011, shortly before the UK post-study work visa was removed.  It would probably only take an economic setback and rising numbers of unemployed graduates to see post-study work for international students being viewed less favourably by a Government that is still posturing about border control.

For US universities keen to make the most of revitalized interest from international students it is worth considering how recent research from IDP might dictate their engagement and offer strategy.  A survey of more than 800 prospective international students in more than 40 countries who are interested in studying in the US – with more than half of respondents based in India – found that more than three quarters (76%) have improved perceptions of the US since the 2020 presidential election, with 67% stating they are now more likely to study there.  What is clear from the UK experience is that the opportunity to recruit from India is available to almost all institutions if they can get the fundamentals right.

Critically, the emerging facts from the UK suggest that value in the cost of study is likely to be as significant a driver of interest as rankings.  Post study work is an important outcome but students, particularly those that are self-financing, will be equally interested in being able to minimize their outgoings during the course.  Making appropriate adjustments and moving decisively to work in market with a compelling message will be vital for institutions wanting to maximise international enrollments post-pandemic.

Realities, Rumours and Days of Reckoning

Another week another private equity investment in pathways, but there’s no sign of the consolidation that would seem to make most sense in a sector beset by competitive pressures globally, rising costs of acquisition and restless partners.  Nonetheless, a few months of underlying movement with pathways closing or being won might suggest universities are beginning to look at their options in a more assertive manner.  This blog takes a quick run through the latest news and discuss a couple of emerging rumours*.

This week’s sale of Oxford International Education Group’s (OIEG) sale was a curate’s egg.  On the one hand there was the strategic backdrop of Nord Anglia buying the schools and colleges (via THI’s purchase of OIEG) to get a solid presence in the UK.  But the rump of the business leaves an assortment of English language offerings with a pathway business that has seen relatively slow growth in partnerships.

For many years there was a notion that pathway businesses and English language businesses had some sales, marketing and enrollment synergy but recent developments suggest other thinking.  The sale of Study Group’s Embassy language schools to EC came in November 2018 ahead of Ardian taking its majority stake in Study Group in February 2019.  Then in June 2019 English language provider EC sold its higher education arm to Study Group in a “strategic move” which EC suggested supported its “core strength” of full immersion English language provision.

THI does however make a lot of the synergy between Oxford International’s relatively new OI Digital Institute (OIDI), launched in 2020, as an online learning platform that sits neatly with Corndel and Learnship in their portfolio.  As far as I can see those brands offer diploma and language learning courses and OIDI has a range of English language courses, test preparation and non-credit bearing pre-Masters and PhD offerings.  It will be interesting to see how these line up against the credibility of CEG’s seven online degree partners, Study Group’s developing strategy with Insendi and Kaplan’s success at the universities of Liverpool and Essex.

The founders and management of OIEG have remained invested as part of the deal with THI but move from having a private investor with a minority stake (Bowmark) to one with a ‘controlling interest’ (THI).  A lot will be riding on the digital offering but also the capability of the English language business to recover from the drubbing the sector has received in recent years.  A rising exchange rate against the Euro deterring language students, the loss of European Union students to UK universities and the resurgence of the US as a student destination may give some headwinds.

Rumours

Most well-founded rumour is probably that CEG are teaching out at Coventry University and will be replaced.  There is no announcement but there seems no way of applying for a course at CEG’s OnCampus operation in Coventry starting in Autumn 2021.  The recent addition of Aston University and the University of Southampton to the CEG stable must have been welcome additions but it is difficult to see that they will quickly match the numbers at Coventry which were over 700 in 2018 according to a QAA report.

If one were to speculate there might be reasons to think that Study Group can leverage their relationship from the Coventry London Campus to win the prize of a pathway at the main campus.  But there have also been suggestions that Oxford International have a fighting chance given their CEO’s contacts with the university – including a contract stint working on international development.  There’s also the glowing recommendation from an Assistant Professor John Fowler of the university about the engagement with OIEG on the development of online, pre-university programmes.        

Less well baked but understandable in today’s feverish environment is the suggestion that INTO’s relationship with Oregon State University is under review.  The INTO team at the university seems well regarded and it may just be that a new President is running the rule over everything.  The fact that the President was previously President and Chancellor of Shorelight partner Louisiana State University (LSU) may add some spice but it’s worth remembering the Insider HigherEd piece which noted a target of 850 for the LSU pathway with only 136 enrolled students after three years.

There is no secret that INTO’s pathway joint ventures in the US suffered the loss of Marshall University in 2020 and Washington State University earlier this year, with reports suggesting that Colorado State University will also be closing.  Looking at the numbers for OSU indicates that the pathway center has had a very tough year with Fall 2020 enrollment declining 58.7% year on year from 809 to 334.  It may be tough to judge performance under current conditions but total enrollments at the pathway have been falling since a peak of over 1400 in 2014 so the trend is well established.  

Days of Reckoning

It is easy to forget how quickly the tides of fortune can change in the world of international student mobility.  The Australian charge to double digit enrollment growth appears to have foundered on a clumsy Government response to the pandemic and they may be out of the reckoning until 2023 unless there is a rapid turnaround.  A burst of interest in the UK has been partially challenged by the travel restrictions of the past year but the continuing extension of post-study work options will deliver opportunities and the data from UCAS suggests that Chinese numbers are particularly robust.  The post-Biden bubble in the US has seen rising interest from overseas but there are still problems in the tensions with China and the practical issues of getting visas.  In Canada there seems to be a growing interest in pathway programmes at lower ranked institutions and the threat from a resurgent US is looming.

For pathway providers, as for higher education more generally, the pandemic has thrown the need for high quality digital courses into sharp focus but without any certainty that students will want to engage in that medium when they can travel again.  For most universities the realities of high fixed costs in their geographical location mitigate against a wholesale shift away from trying to recruit students to attend in person.  It is just possible that the global student mobility world will return to something approaching the “old normal” rather than there being a “new normal” but with the added options of models incorporating digital and even, so some would suggest, virtual reality.

*Note

I am happy to accept authoritative responses, comments or corrections to any of the points made and will represent them in amendments to this blog.

Image by Gerd Altmann from Pixabay