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