Category: Education

Another Canadian University Pathway Coming Soon?

Pathway operators have been focused on getting contracts with universities in Canada for several years but there has been little real momentum.  All the more interesting to catch rumours of Navitas nearing a breakthrough with Ryerson University.  It’s worth having a look at whether there’s any strength to them.

Exhibit one would be the university’s Senate Meeting Agenda of 1 October 2019.  Pages 78 to 83 have a summary of meetings ‘from the President’s Calendar’ and there, hiding in plain sight on page 82, is the entry:

Jul 29, 2019: Over dinner, I met with Rod Jones, group CEO for Navitas worldwide; Scott Jones, nonexecutive chair of the board for Navitas worldwide; and Brian Stevenson, president and CEO, university partnerships, Navitas North America. We discussed the potential for Ryerson to bring in international students through the pathways to university education that Navitas offers.

The information had previously been shared at the Board of Governors meeting on September 20, 2019.  So we know that Ryerson’s President Mohamed Lachemi has been meeting with senior people from Navitas although that might not be considered unusual.  But there’s a little bit more to report.

Recent social media shows President Lachemi escaping the Canadian winter in the past couple of weeks and ‘expanding Ryerson’s relationships with leading universities’ in Australia.  This might be unexceptional but the twittersphere also suggests visits to Griffith College and Deakin College – two Navitas centers – arranged by Navitas.  And it sounds like there have been more meetings with senior Navitas folk.

There’s no way of confirming the market gossip and I am always happy to clarify the situation if an authoritative source gets in touch. Ryerson has certainly been in conversation with at least one external operator in the past but given the rise of Canada as an international student recruitment magnet it’s questionable what benefits such a relationship brings.  Some commentators might argue they could organize themselves to take advantage of the momentum behind enrollments.

Once clue might be that Ryerson looks to have been left lagging despite the surge in interest for the country with the world’s longest bi-national land border.  There are thirty Canadian universities listed in the THE 2020 World Ranking top 1000 and the percentage of international students at Ryerson is the lowest of all.  At 4% it is well behind other, admittedly higher ranked, Toronto institutions like the University of Toronto (21%) and York University (24%).

Ryerson’s global ranking in the THE ranking 601-800 bracket places it behind the other Navitas partners in Canada.  The University of Manitoba is ranked in the 351-400 bracket and has 17% international students and Simon Fraser University is in the 251-300 bracket with 30% international students.  This might suggest that there is plenty of scope for Ryerson to grow with the right sort of support.

It would be the third public research university to partner with Navitas and would give the portfolio added depth.  The only other pathway provider with representation in Canada is Study Group who have one public research university in Royal Roads and two sub-degree colleges in Stenberg and the Center for Arts and Technology. 

With US enrollments still struggling and the maturity of the UK and Australian pathway markets it’s easy to see why there is interest in Canada.  Interest remains strong amongst students and agents with little sign of applications slowing.  But everyone with a history in international recruitment knows that past performance is no guarantee of future success.

The international student boom in Canada has come with some issues that are increasingly grabbing the headlines.  There are allegations of students being ‘duped by unscrupulous agents’, scarcity of part-time work and up to 39% of study visa applications being rejected.  It’s difficult to believe that interest will slump quickly or precipitously but it may be time for wise heads to consider what a sustainable rate of growth might look like.

Image by David Peterson from Pixabay

Changing Fortunes and Futures Across Major Recruiting Countries

Another extraordinary year in higher education around the globe and a good moment to review some of the highlights and possible future directions of the main four recruiting countries.  There’s plenty to consider as the established recruiting heavyweights fight off emerging challenges, the shake-up of pathways continues, and India’s rise as a market becomes an obsession for recruiters.       

USA

A year of reckoning for pathways with four closures each by Study Group and CEG while EC Higher Education exited the market totally.  All of which reminded us of the chill wind blowing through international student enrollments in the US.  It added to the uncertainty around a sector which is seeing changing demographics and growing competition lead to longstanding institutions closing. 

IIE reported overall international student enrollments for 2018/19 down 2.1% on the year before and 3.4% down on the peak of 2016/17, with the number of new undergraduates falling for a third year in a row (down 10.4% over three years).  For the press release to claim,  “we are happy to see the continued growth in the number of international students in the United States”, seems either complacent or misguided.  It’s fair to say that the quote reflects the inclusion of OPT (a form of post-study work) numbers in the overall count but even when they are included growth was a measly 0.05% which hardly seems a basis for contentment. 

A microcosm of the problem and its impact on pathways was highlighted by student newspaper The University Daily Kansan which showed the University of Kansas and Shorelight partnership falling short of expectations.  It indicates that in 2014 Shorelight intended to double the number of international students at the University.  But between 2014 and 2018  the number enrolled fell from 2,283 international students to 2031 – an 11% decrease.  

 Shorelight parted company with their Chief Commercial Officer, Sean Grant, in October after just over a year in post.  At INTO University Partnerships, Cagri Bagcioglu, Senior VP Partners North America, left after 16 months and has turned up at Cintana Education.  Reports of job losses at Navitas were in the news and Study Group have yet to announce the replacement of their North American MD.

Looking forward there seems to be little likelihood of the news improving any time soon.  Changes to post-study work in the UK may further undermine recruitment from India and there is already good evidence that some Chinese students are putting the UK ahead of the US.  It will be worth watching to see whether INTO, buoyed by bumper recruitment in the UK, will invest heavily to make life even tougher for the US-centric Shorelight.

UK

The world of international student recruitment in the UK changed in September 2019 with the announcement that a two-year post-study work visa was being introduced for students from the 2020/21 academic year.  Foundation courses are already doing huge business for January 2020 entrants looking to go on to the full university degree later in the year.  The British Council is predicting growth of ‘just under 20%’ across the sector in the year ahead.

The announcement lifted the gloom that had been felt since post-study work was ended in 2012.  While many big brand names have done well in the intervening years, the new Government policy opens the door for more universities to maximize their intakes.  The news built on statistic showing that the UK had already seen a 63% year on year increase in Tier 4 visas granted for Indian students in the year to September 2019.

It was a good year overall for pathway providers with Study Group picking up Aberdeen and Cardiff while Navitas secured Leicester.  Given the renewed recruitment opportunity, it’s ironic that INTO’s pathway with Gloucestershire was closed during the summer period.  With growth guaranteed for a couple of years the year ahead may be the right moment for some of the smaller players to get a good price for their pathway activity from one of the big players.

The coming year is also likely to see interest focusing back on the implications of Brexit with the probability of the Government inserting a clause to ban any delay beyond December 2020.  Plenty of reason for universities to be nervous about enrollment from Europe if students are obliged to pay international fees when the deal is done.  And there may be a resurgence of interest in new, European based campuses to try to ameliorate the problem.

Australia

The battle for the Ashes has nothing on the intensity of competition for international students, and it took Australia less than a month to respond to the UK’s post-study work change.  They decided that Perth and the Gold Coast would be classified as regional which gives international graduates an  additional year of post-study work rights.  The federal government added that student in regional centres and other areas would have access to up to six years of PSW.

All this on top of an Australian enrollment juggernaut that has seen double-digit growth in international higher education students for each of the past four years.  Enrollments year on year to October 2019 were c45,000 up at 434,756.  Despite arguments about lack of diversity their percentage of Chinese students is 28% compared to the US at 34% (including OPT) and the UK at 33% (of international fee paying).

There could be plenty more gas in the tank which may have been the reason Rod Jones and his colleagues took Navitas into private ownership with BGH.  It would also explain new kids on the block (or old kids who’ve been round the block) Camino Global Education, founded by John Wood, former CEO of university partnerships at Navitas, and Peter Larsen, who co-founded Navitas (then known as IBT) with Rod Jones in 1994.

Australia has led the way in developing transparency on student recruitment agencies, and its Government recognizes the value of the higher education sector to the economy.  One would guess that the potential of trans-national education is well within their sights as they embed their network in the vibrant Asian economies.  For the casual observer they also provide the best, most up-to-date and detailed data on international student enrollment and that’s a model most other could do with replicating.

Canada

‘O Canada…with glowing hearts we see thee rise, the True North strong and free’.  Those words from the national anthem must be how the country’s higher education sector and national Government feel about international student recruitment.  But it’s far from over because the federal government recently pledged nearly $30-million a year over the next five years to diversify global recruiting efforts in the postsecondary sector.

Remarkable to believe that just five years ago a headline of ‘When it comes to foreign students, Canada earns ‘F’ for recruitment’ accompanied the release of a report by the Council of Chief Executives and the Canadian International Council.   It provoked action and the launch of the EduCanada brand in 2016, which drove the number of international students in college or university from about 120,00 to 260,000 from 2015 to 2018.

Canada is also unusual in having more students from India than from China.  In December 2018 India surpassed China as Canada’s top source of foreign students, across all sectors, with more than 172,000 study permit holders. Each country represents slightly more than a quarter of the total of 570,000.

It’s no secret that every pathway operator has been trying to access the Canadian higher education sector for years.  The reality is that the sector had organized itself and was making progress while most of the attention was on the US.  There seems little need for outside help as they launch their  International Education Strategy 2019-2024.

Anyone who has worked in the international recruitment field knows that bets on long-term success are likely to lead to embarrassment. It’s less than a decade since Australia’s years in the doldrums, this article notes Canada’s ‘F for failure’ and just three months ago the UK wasn’t competing on post-study work options. It’s also only ten years ago that the lure of the US market was driving extraordinary valuations of pathway companies.

But it seems pretty reasonable to say that when the enrollment numbers for 2019/20 and 2020/21 are in there will be smiles in Canada, Australia and the UK. For the US the road to growth is unclear and may be several years in the building. And there remains the possibility that higher education in Asia will reach a tipping point to upset the old order even more fundamentally. Happy holidays.

Photo by Element5 Digital from Pexels

UK’s International Graduate Employability ‘Promise’ – Next Steps

It should be possible to wholeheartedly welcome UUKi’s Conference ‘International graduate employability: Making good on the promise’ because it is an important topic.  But I doubt we will see 90% of the time devoted to employability for students leaving the UK after study, although that’s the percentage that will probably look for jobs in their home country.  Neither is the Conference likely to have the necessary quality of data about graduate outcomes and views despite the investment made in UUKi’s International Graduate Outcomes 2019 publication. 

Even more discouragingly, the publicity for the event majors on the point that ‘we have the post study work visa we have argued for for so long’.  This encourages those who want to focus on short-term enrollment growth by maximising the post-study work windfall rather than serving the broader international graduate community.  A more balanced view would reflect that providing careers services, alumni relations and employer networks suited to international students returning home will be a key point of strategic differentiation in the long term.       

In addition to getting the balance of time in the Conference right it would be good to see discussion and commitments on how to make progress in four key areas: 

Make Sure Data Reflects Reality

Several assertions in the International Graduate Outcomes 2019 report are heavily caveated and require detailed explanation in a footnote or the annexes.  The most egregious is the claim that “The balance of respondents to the i-GO survey by nationality was broadly similar to that of international students studying in the UK.” (page 17).  With only 6% of the total respondents from China this is nonsense and, as a footnote confirms, “in the year 17-18, Chinese students made up 33% of the total non-EU student population…”.                

Assertions on comparative salaries (page 49) for UK graduates working in other countries are problematic and confusing.  For the diligent reader these anomalies are explained away but the headline claims seem to be a naïve overstatement of the benefits based on data that is not comparable and in some cases is very limited.  If this begins to work its way into university marketing materials we are likely to see the Advertising Standards Authority called into action again to correct misleading claims. 

Other sources and methodologies, which have more substantial samples and better reflect the nationality mix of UK-enrolled international students, are available.  They also offer the potential to compare performance across competitor countries and give substance to claims about the pay premium that returning students can expect.  Individual universities are already buying these services  but the competitive future of UK HE seems worth a sector-wide approach.         

Get Serious About Careers Service and Advice

In the foreword to UUKi’s report Chris Skidmore Minister of State of Universities, Science, Research and Innovation comments, “Together we can build on this research to help ensure that international students who graduate from the UK’s world leading universities are in the best possible position to go on to further employment be it in the UK, or their home nation”.  The latter will be difficult if not impossible if there is no concerted effort to build relevant support and services for international students.

The report highlights that only 2% of international students found jobs through their University Careers Service.  It is arguable that few of those Services are equipped technically, with funding or with genuine insights, to help international students engage with employers in their home countries.  Whatever the reason, it is a dismal outcome and an indictment of the services international students receive for their fees.

Pay More Attention to International Alumni Relationships

Details on response rates are not wholly clarified but the Report stated it was, “… less than 1% of total international graduates from UK higher education institutions” during the sample period.  It seems plausible that those who did respond are outliers in the alumni community who feel particular affinity or allegiance to their institution and/or the UK.  If so, it is dangerous to assume that high levels of approval and support for the educational experience are commonplace. 

Most service organisations are more interested in finding out about customers who are dissatisfied so that they can improve their offering.  Lack of engagement means that institutions may be getting highly selective feedback and missing information that could help them build more effective curricula and better support.  Even if the responses are representative and the low rate just the result of inertia, it means universities are missing opportunities to develop networks of graduates around the world who may be supportive of future students seeking employment.

Target Connections with Employers Through Better Data, Insight and Graduate Support

HEIs should know the destinations of international graduates and develop targeting to match graduates with relevant skills to employers who need them.  The importance of this is apparent in markets such as Malaysia where students ranked nine Asia-Pacific regional companies as the most desirable employers  in their top ten for business and commerce according to Universum 2017.  In terms of graduate employability many Asia-Pacific based corporations would also benefit from universities providing better information about courses and the strengths of their students.

There are major opportunities for universities that are able to fit together the jigsaw of graduates and employers.  Better employment prospects and evidence of thriving careers is a siren call for both potential students and major organisations who are seeing job-prepared employees from favoured institutions.  The best way to achieve that level of synchronicity is through data that is individualized to each university delivered with insights about regional economies. 

A Strategic Advantage and Virtuous Circle

I would like to give three cheers to the UUKi for staging a Conference on an important issue and their effort to develop a worthwhile piece of evidence that underscores the UK’s position as a high-quality study destination that delivers enhanced career and life prospects.  For now, I can only manage one-and-a-half because the Report errs on the side of marketing at the expense of more hard-edged insights, and the Conference may simply reinforce short-term, narrow thinking about finding jobs for students who stay in the UK. 

More positively, both are good starting points which, with imagination, conviction and investment, could become the basis for a genuine strategic advantage.  This would mean investment in demonstrating through data and insights that the UK produces a global network of alumni with thriving careers.  With graduates choosing to work overseas getting appropriate support as they start their working lives, businesses around the world would better understand the value of a UK higher education, and international students would choose the UK knowing it gives them an employment advantage. It’s a virtuous circle worth considering.

    Image by Gerd Altmann from Pixabay 

MORE US PATHWAY RUMORS AS THE MARKET TIGHTENS

Things seem to be moving fast as the big pathway players realise that winter is coming, both physically and metaphorically, to their US operations.  Hot on the heels of the recent Study Group closures there are strong rumors of Navitas reviewing its US partnerships and cutting staff.  Shorelight has also taken action through changes to its senior management team and staff lay-offs in the past month.

The Navitas partner changes are still at the point of speculation and no brand names have been removed from the list of partners as of today.  But the ‘Search Navitas programs’ area of the website turns up no results for Virginia Commonwealth University, Richard Bland College or University of Idaho.  Searches for University of New Hampshire courses lead to a broken ‘this page isn’t working’ link.*  By contrast the Florida Atlantic University pages, UMass and Queen’s College pages seem fine, as do the Canadian university partner links.

Dr Brian Stevenson took up the reins as CEO and President of Navitas’ University Partnerships North America division at the start of this year.  With his strong links to Canada it’s possible that there is a major shift of emphasis that would reflect the continuing popularity of Canada as a student destination.  There certainly seems little prospect of any but the best or most market-oriented US universities being a profitable proposition in the near future. 

In October InsideHigherEd noted the decline in Chinese student enrollments and its potential impact on US universities but the next news might be about the changing preferences of students from India.  2019 saw the UK have a 42% year on year increase in visas issued to Indian students and there is every sign that the coming year will see similar growth.  With changes in post-study work visas coming into effect for 2020 enrollments universities and pathways are already reporting substantial interest.

Back in 2014 Karan Khemka, then a partner with the Parthenon Group, said: “The U.S. third-party/outsourced pathway market is less than half the size of the Australian market despite having a higher education system that is 10 times the size.  We anticipate that growth will be constrained only by the pace at which private providers can develop the market.” That was one of the drivers for over $1bn of private investment being made in pathways.  

The reality is that, with CEG and EC leaving the market, Study Group cutting back and Navitas now looking hard at its options, the past 18 months has seen a decrease of well over 10% in the number of US pathways.  By contrast the UK and European pathway market continues to grow and Australia has just loosened its post-study visa regime a little further.  It seems likely that this is the prevailing direction of travel for the foreseeable future.

*Searches undertaken on 30 October 2019. As with all commentary in this blog any authoritative comments or corrections are welcome and will be recorded.

Image by PublicDomainPictures from Pixabay

Shine a Light on Shorelight

Getting contemporaneous data and sales targets from privately held pathway providers is unusual.  But in a July 2019 podcast interview, Sean Grant, Chief Recruitment Officer of Shorelight Education, tells us that Shorelight recruited 3,000 students “last year” (presumably 2018/19) and are forecasting to recruit ”4,000 students plus this year.”  Grant notes that the 3,000 student figure for 2018/19 represented year-over-year growth of 35%, which suggests Shorelight recruited approximately 2,200 students in 2017/18.

It was equally enlightening to hear that the company continues to invest heavily in building its sales function. Grant noted that Shorelight’s US-based onshore recruitment team grew from five people to 28 in “about six weeks” last year. While staff growth of this magnitude and pace is prodigious by most measures, it may be the norm for a company that considers itself “the Amazon or the Google of the…international education sector.”

Because Shorelight is a private company based in the US, it has largely been able to maintain confidentiality around its economic performance (unlike UK-based competitors, who are required to publicly disclose annual financials).  The Shorelight website shows 17 current university partners, and a press release announced their partnership with Cleveland State for fall 2019 recruitment, bringing the total to 18.  Grant referenced 19 partners in his interview, so it’s just possible we may have had early notice of a new partner joining the portfolio. 

Shorelight is now in its seventh year of operation since its mid-2013 inception.  With the disclosure of recruitment numbers and the indication that the business continues to invest heavily in sales staffing, it’s worth drilling down to look at how the six public universities that signed early on with Shorelight are doing*.

Louisiana State University

Shorelight began recruiting for LSU in 2015 and since then the university’s total enrollment of non-resident aliens have fallen from 1704 in fall 2015 to 1599 in fall 2019 according to the Geographical Origin of Students spreadsheet.

Table 1 – Total Fall Enrollment of Non-Resident Aliens at Louisiana State University  

Souce: LSU Fall Facts and Interactive Dashboard

In the form contract between LSU and Shorelight, publicly disclosed by the State of Louisiana, the articulated enrollment goal for the International Accelerator Program, i.e., the pathway, is 850 students in the ’fifth Academic Year of the IAP” (2020/21).  Inside Higher Ed reported that in spring 2018 “there were just 136 students enrolled,” and market rumors suggest that recruitment remains a long way short of target. The absence of overall international enrollment growth at LSU suggests that neither pathway or direct recruitment are going to plan.

University of Kansas

There is a similar story at the University of Kansas where the fifteen-year contract with Shorelight came under fire from academics at the time it was signed in 2014.  Sarah Rosen, then Vice Provost for Academic Affairs at KU (who has since moved to Georgia State), was reported to have articulated enrollment aspirations of about 600 in two or three years. As Shorelight sought and won an injunction preventing the release of the contract, no further insight into the parties’ ambitions are available.  As KU’s total fall enrollment of non-resident aliens (termed international in the Factbook) has decreased during the relevant period, it seems likely that this aspiration was not met.

Table 2 – Fall Enrollment of Internationals at University of Kansas  

Source: University of Kansas Interactive Factbook

Auburn University

Auburn signed with Shorelight in 2015. The university’s online, interactive Factbook offers the option to filter enrollments by on-campus, “Primary Major” which includes the various “Auburn Global” programs offered in partnership with Shorelight. Enrollments rose substantially between 2015 and 2016 but have been in steady decline since.  Overall, enrollments are largely undergraduate and Chinese.

Table 3 – Fall Enrolment to Auburn Global Courses at Auburn University  

Source: Auburn University Factbook

Table 4 – China/Non-China Fall Enrolment to Auburn Global Courses at Auburn University

Source: Auburn University Factbook

At the university level, the impact of the trends within Auburn Global are clear: total international student enrollment has grown from 1639 in 2015 to 3034 in 2019, with the percentage of Chinese students going from 46% to 62% during this same time. Obviously, the financial impact of 1400 additional students is material; however, the risk associated with such a large proportion of students from a single source country, especially in the current political climate, is palpable.

University of South Carolina

The Fall 2018 International Student Enrollment Report from USC captures the five-year picture on the university’s international recruitment.  The International Accelerator Program (IAP) has helped push undergraduate numbers forward but its growth appears to have stalled.  Of the total international enrollment for the university 40% of students are from China.

Table 5 – International Student Fall Enrollment – University of South Carolina

Source: USC Fall 2018 International Student Enrollment Report

Florida International University and University of Central Florida

Both of Shorelight’s Florida partners have seen strong growth in overall international enrollments.  As a comparator, the University of South Florida, an INTO partner, saw total international enrollments grow by around 1500 between 2015 and 2018.  This may reflect both the popularity of Florida as a destination for international students and that the three universities have lower fees than the others reviewed.

Table 6 – International Fall Enrollments at UCF and FIU

Source: Factbooks of Florida International University and Central Florida University  

Summary

Some crude metrics emerge from the forecasted recruitment outcomes mentioned in the podcast.  If Shorelight indeed recruits 4,000 students this year, the average number of students recruited by each member of the 145-person sales team this year will be 28, and the average number of recruited students per partner (assuming 18 partners) will be 222.  Seasoned recruitment professionals will have views on how that ratio stacks up in terms of performance.

There will also be opinion on what the drive for 35% growth might mean in terms of cost of acquisition for US-bound students.  As Inside Higher Ed reported  in June 2018, promotional bonuses were already pushing agent compensation ”well north of the 15 percent threshold,” and it seems unlikely that this cost will have fallen.  With the UK resurgent after reintroducing two year post-study work visas competition just got even tougher.    

The closure of partnerships by Study Group, CEG and EC has provided insights into how difficult the US pathway business has become.  The experience of the partners reviewed here suggest that, regardless of ranking, success can be elusive and only time will tell whether Shorelight’s strategy is a winner.  Investment and targets are one thing, but brute market realities are quite another.

*University reporting formats are not wholly consistent. Extensive efforts have been made to verify data used and sources are given for reference. Authoritative comments or corrections are welcome.

Image by mollyroselee from Pixabay

More US Pathway Cutbacks

Keeping pace of the developing pathway scene among the private providers in the US requires constant attention.  Study Group has taken action within its US portfolio and no longer recruits for four brands featured on the company’s website a few months ago.  After this year’s closure of CEG’s US centers and EC Higher Education’s withdrawal from the market it’s further evidence of the pressure on international student recruitment.

The closed Study Group pathways are Roosevelt, Widener and Merrimack while West Virginia was a direct recruitment option.  The Merrimack relationship extended back over a decade, Widener and Roosevelt were opened in 2012/13.  West Virginia came online in January 2018 with recruitment commencing in fall 2018.

These changes leave Study Group with four regionally-ranked and seven nationally-ranked university partners according to USNWR 2020 listings. Among the nationally-ranked, two were taken over from EC while only three sit above 200: Baylor (79), Vermont (121) and DePaul (125).  Three of the four remaining regionally ranked universities, Oglethorpe, Western Washington and Lynn were signed in 2017, so there may be contractual impediments to early action.

US News Ranking 2020 of Study Group US Partnerships (closed institution in red)

The Study Group closures mean that, as far as I can track from public information, the company has launched 14 university partnerships in the US of which five have now been closed in the past two years.  Between CEG and Study Group more than 10% of US private-pathway provider centers have closed in the past two years.  These tended to be smaller operations in terms of student numbers, but it reflects the stress that the sector is under.       

As global competition grows, the potential for private pathway providers to recruit successfully to less prestigious and/or lower ranked institutions seems increasingly questionable and even bigger names have seen enrolments declining.  It is difficult to see that the increasing view of Admissions Directors from Masters/Baccalaureate institutions that pathways ‘will become more important’ is well founded.   Neither is it obvious that the billion dollar private equity fuelled dash to build pathway capacity in the US is going to pay off in the foreseeable future.

With UK international recruitment prospects resurgent under a new Post-Study Work regime, the growing quality of emerging options around the world and the continuing assertiveness of Canada, Australia and Germany, it’s probably time for a rethink.

Image by Gerd Altmann from Pixabay

Changing Perception of US Pathways

It’s been the quietest year for nearly a decade in terms of announcements about new pathway partnerships in the US, and the 2019 Inside Higher Education (IHE) survey of College and University Admissions Officers suggests a shift in perceptions by institutions.  The closure of several centers in the past year and disappointing enrollments at a number of institutions have given plenty of reason to be cautious.  But faith persists in some sectors.

In the Survey only 12% of public doctoral institutions strongly agreed that “Pathway programs will become more important to US higher education in the current environment.” In the 2018 survey that percentage was 22%.  Among Private Non/Profit Doctoral/Masters institutions, the percentage of respondents agreeing or strongly agreeing to the statement fell from 60% to 51%.

Table 1 – Pathway Programmes Importance to US Higher Education (IHE, 2018)

Table 2 – Pathway Programmes Importance to US Higher Education (IHE, 2019)

However, there has been an almost Damascene conversion among Public Master’s/Baccalaureate institutions, where 28% now strongly agree in pathways’ growing importance, compared to 15% last year.  This is mirrored in the Private Non-profit Baccalaureate section where 56% agree or strongly agree compared to 33% last year.  While, at an aggregate level the survey shows declining enthusiasm for pathways it is clear that they still hold an allure for some institutions.

The real question for the new enthusiasts will be whether the private pathway providers have much appetite for non-doctoral institutions.  The portfolios of the ‘big two’, Shorelight and INTO, contain universities offering doctorates some have quite limited offerings.  Study Group have a mixed bag of institutions and recently some at non-degree level in Canada, and Navitas has some non-doctoral universities on the roster.

Potential for new, high-profile partners may become even more limited as stronger US institutions become increasingly comfortable with their capacity and capability to manage enrollments without resorting to a third party.  While, to date pathway providers have been the more likely party to terminate partnerships empowered or disappointed universities might begin to question underperforming relationships or decide they can do better alone.  The scene is set for more turbulence as people come to terms with the new global mobility conditions.       

Furthermore, the UK’s move to institute a two-year Post Study Work (PSW) visa for students enrolled from 2020 may bring further pressure and undermine the US’s position as a favored destination for international students.  After a 33% surge in Chinese undergraduate applications to the UK for 2019/20, the UK Home Office reported that the number of Indian students choosing to study in the UK increased 42% from June 2018 to June 2019.  It is likely that following the PSW announcement, India’s numbers will continue to grow rapidly for the 2020 intake.

Alongside that, the US is heading for an election year where the future of global relationships, student visas and existing post-study options could be part of the political debate.  Just as the financial markets dislike turbulence it is difficult to see why a student would choose to invest in an uncertain future.  The relatively safe havens and emerging, quality options around the world could seem increasingly attractive. 

For Study Group and Navitas any difficulties in recruitment to the US will be mitigated by increasing momentum behind their considerable portfolios in other parts of the world.  INTO’s mix is more finely balanced but its recent focus has been on the US and it has just lost the University of Gloucestershire as a UK pathway partner.  Shorelight is wholly US based and will face the full force of global headwinds. 

It certainly seems likely that pressure on sales teams, cost of acquisition and other “promotional” tactics will increase.  Local difficulties, such as those Shorelight are facing in Kuwait, will also impact on the ability to recruit sufficient students for existing partners let alone new ones.  Life is unlikely to get any easier in the short term and may get a lot worse, which might seem to mitigate against continuing expansion, particularly with sub-optimal partners.     

However, ‘doubling down’ is a popular phrase in the US and has come to mean ‘to strengthen one’s commitment to a particular strategy or course of action, typically one that is potentially risky.’  The IHE survey suggests that at least one sector of the market is increasingly interested if pathway operators have the appetite.  But in terms of recruitment it might be worth remembering that, as the UK’s ‘Iron Lady’, Prime Minister Margaret Thatcher said in 1997, ”you can’t buck the market.”

Image by Gerd Altmann from Pixabay

PSW – The Morning After

There’s plenty of jubilation over the re-introduction of two-year Post-Study Work visas and congratulations are due to those who lobbied for it.  But it’s worth remembering that Government’s rarely give something without wanting something in return and that every gift horse should be given careful scrutiny.  In that context there are a few things to look out for over the coming weeks, months and years.

Drift, Detail and Design

A ‘popular’ announcement from a Government under pressure is often rushed out with detail and other policy intent still needing to be tidied up.  The Home Secretary’s announcement that the new Graduate Route ‘will mean talented international students, whether in science and maths or technology and engineering, can study in the UK…’ was curious in the context of a scheme allowing all graduates to stay.  It’s mirrored on the Home Office website and may provide cover for a later tightening of the rules to specific subjects.

A Step Forward But…

Some details of PSW are still to be announced but it seems slightly short of the Australian (two to four years) and Canadian (up to three years) schemes.  It is not yet clear if families can join the PSW graduate as in Australia and it seems doubtful that there will be any room for promoting it as a route to permanent residence as Canadian institutions do.  And there is always the potential for both those countries to step up their offer to become even more competitive.      

Economic Conditions Can Change Policy

PSW was last introduced in the UK in 2002 when unemployment was 5%.  It’s discontinuation in 2012 followed a rapid rise in unemployment to 8% between 2009 and 2011. Prime Minister David Cameron told the House of Commons, ‘Frankly, there are lots of people in our country desperate for jobs. We don’t need the brightest and best of students to come here and then do menial jobs.’

The economic direction of travel for the UK post-Brexit is uncertain but universities have been drawn very directly into discussions about employability and the value of a degree. It’s easy to allow PSW in an era of historically low unemployment, currently around 4%, but if recession hits and unemployment climbs it is equally simple to remove it.  Trends in numbers and careers of home graduates may factor in that equation.

Table 1 – UK Unemployment 2000-2013

Grounds for Home Student Fee Reduction

The HE sector made an enormous song and dance about the contribution of international student fees but may find being granted it has unintended consequences.  With increasing international students providing a major economic stimulus to universities there is fertile ground for populist and electioneering proposals to cut fees for home students and increase investment in school and FE.  It’s probably helpful that international students also prop up the economics of many STEM courses and postgraduate study.

Limiting HE Investment to Support Other Priorities

Universities may hope the Augar Review has been buried but newspaper headlines about ‘low value’ courses, universities manipulating applications, grade inflation and VC pay are unlikely to have been totally forgotten.  More importantly, more money from international students gives grounds to support more popular or political priorities.   It was interesting to see Chancellor Sajid ‘I went to my local FE College’ Javid, Spending Round announcement include an increase for further education funding in the 2019 spending round and increasing ‘school spending by £7.1 billion by 2022-23, compared to this year.’

International Fees For EU Students

One of the arguments against introducing international fees for EU students post-Brexit has been that it will cause a significant decline in their numbers.  A surge in traditional international fee-paying students attracted by PSW makes up those numbers and would allow EU students to work as PSW international students without a more complex arrangement with Europe.  Making EU students ineligible for UK student loans would also eliminate headlines like ‘Thousands of EU students fail to repay loans.’

Never Mind the Quality Feel the Width

It is arguable that strong brands perceived as high quality or with potent strategies for recruitment have not been particularly troubled by the lack of post study work visas.  Eight Russell Group universities each increased their first-year international student intakes by over 27% over the two years from 2015/16 to 2017/18.  Even beyond that Group there are clear winners who achieved significant growth including De Montfort (+78%) and the University of East London (+90.6%). 

For some universities these were grim years with five institutions each seeing their intake decline by over 300 students.   PSW is likely to see such institutions making up for lost time and revenue by driving international numbers up but the quality of the intake may suffer.  PSW as the driver for attracting less able international students to cash-strapped universities is not a particularly lofty ideal.

Competition for Places and Jobs

The potential for significant upturns in volumes of international students comes just as the upswing occurs in home student demographics with HEPI suggesting the need for up to 300,000 additional university places by 2030.  This sets the scene for potential conflict between home students and international students – particularly if home fees go down and institutions are looking towards the economics.  The OECD’s Education at A Glance 2019 noted, ‘there is a risk of squeezing out qualified national students from domestic tertiary educational institutions that differentiate tuition fees by student origin, as they may tend to give preference to international students who generate higher revenues through higher tuition fees”.

It’s suggested that in 2019 around 1,000 places were reserved for international students in Clearing and the economics may push institutions to favouring international students over home students just as home demand steps up.  It is only a short step to stories about debt-laden home graduates being unemployed because universities are enticing increasing amounts of international competition for early career jobs.  At that point the freedom of PSW may find itself subject to increasing scrutiny and Government intervention.

Conclusion

A benevolent PSW policy is to be welcomed where it builds on the reputation of the sector for quality and is part of a strategic approach to supporting higher education’s potential as a major contributor to global influence as well as the UK’s economic and cultural development.  It is also possible that the recent announcement was carefully planned and is the start of a period of unprecedented benevolence towards higher education in the UK.  But history and context suggest that things are rarely so simple.   


Image by Gerd Altmann from Pixabay   

Clear For Clearing

It’s a bit early to predict final international student (excluding European Union) recruitment outcomes from the UK undergraduate Clearing season but the first week often gives some direction.  There’s also some anecdotal feedback on how institutional and student strategies might be shaping up and what it means for the broader sector. There’s a long way to go with the season largely defined by the last date on which international students can get visas to study.  

Looking at international students who have been ‘placed’ there has been a slightly surprising decline in year on year (YOY) growth over the first week.  On A-Level day (Day 0) 6.7% (2,120) more students had been placed than in 2018 and the number holding an offer was up 5.6% at 16,860.  By Day 8 the placed YOY increase was only 5.2% at 1,900 although offer holders were up 9.5% at 12,120.   

  Table 1 – Year on Year Differences In Place Students

Source: UCAS

NB: Each bar reflects the difference on the year before i.e. bars for 2016 reflect the difference compared to the corresponding UCAS reporting days in 2015  

The deeper context is strong growth in international student application growth measured at 8% at the 30 June UCAS deadline with a particular surge in applicants from China.  There are suggestions that the growth in applicants has allowed institutions to be more selective which seems likely at a point where there is more demand than supply.  An alternative, or perhaps complementary, take is that students are also being choosier and taking the opportunity to shop around before accepting an offer.

Plenty Still To Play For

While conversion tends to slow very quickly after the first week of Clearing the pool of 12,120 offer holders suggest that there’s plenty to play for.   Trying to project numbers forward it may be reasonable to take last year’s outcome as a guide.  In 2018 the pool of those holding an offer on Day 8 was 11,070 and by Day 28 of clearing the total number placed had grown by 18.8% of that number. 

A similar result in 2019 would mean that Day 28 in 2019 would see 40,430 placed students which would be a growth of 5.5% YOY.  It’s a rough and ready calculation and at Day 8 there were still a record number of over 30,000 students free to be placed in Clearing.  Whichever way you cut it this looks like a good year for the sector.

Another factor is that the numbers published by UCAS only cover the main scheme applicants and do not reflect those who might have used a Record of Prior Application* (RPA) to bypass the system.  As I noted in a blog in December 2018 this route has been growing quite rapidly, with just over 6% of the total number of students using the RPA route in 2018 compared to 3.9% in 2014 and just 4.8% in 2017.  Further growth would bring even more upside in recruitment for universities.

A Good Year But Beware The Fog

There may be even better news for the sector because there is reasonable feedback from some pathway operators and sixth form colleges suggesting that they are having a bumper year.  One commentary has suggested that students unable to get direct entry into well-ranked universities of choice are choosing to take pathway courses at those universities.  Even more encouragingly the buoyancy seems widespread and there is likely to be welcome relief for some universities that have seen significant declines in international student volume in recent years.

The undergraduate numbers are the smaller part of the international recruitment picture but there is no reason to believe that postgraduate numbers are not doing at least as well and probably better.  All this before the likely reintroduction of a more powerful post-study work option and the removal of international students from immigration statistics.  It bodes well for the near-term future of the UK sector at a point when the US seems to be mired in difficulties that are unlikely to be corrected quickly.   

Against this background experienced international recruiters will remember Clausewitz’s dictum that, ‘the factors on which action..is based are wrapped in a fog of greater or lesser uncertainty’ – it’s the basis for the popular phrase ‘fog of war’.  Brexit continues to loom over the sector with no real clarity over long-term decisions on the fee status of European Union students.  Concerns must also remain over reliance on one dominant source country when the rise in UG applications was substantially driven by students from China.

*Record of Prior Acceptance – where an application is submitted to UCAS by a provider, when an unconditional firm has been offered and accepted by the applicant. These are not recorded in the daily Clearing analysis and will be reported after the cycle has closed.


Image by PublicDomainPictures from Pixabay y

More Pathway Jeopardy

INTO’s joint venture with the University of Gloucestershire is under ‘strategic review’ with the possibility of closure.  INTO is no longer accepting applications to start at the on-campus centre in 2019, which is understandable given the uncertainty but seems unlikely to improve future prospects.  It is anticipated that the review will be complete in early July. 

A number of ‘third party’ pathway centres in the UK and US have closed in recent years, including Navitas at Edinburgh Napier and Oxford International at the universities of Canterbury Christ Church and Bedfordshire.  In the US four CEG OnCampus pathways are closing, and EC’s higher education business has shut down with partners moving to Study Group. INTO Gloucestershire offers some insights into the dynamics at play in the joint-venture model.  

The centre opened in 2013 but has struggled to build enrolments or achieve operating profitability.  The most recent published figures show average enrolments falling for two years and lower in 2017/18 than 2014/15.  The University’s Financial Statements for 2017/18 noted ‘the highly challenging market’ and it seems unlikely that 2018/19 enrolments were much, if any, better.   

Table 1 – INTO Gloucestershire Average Enrolments  

Source: INTO Gloucestershire LLP Annual Reports

The University’s most recent Financial Statement concluded that the ‘financial performance of the JV entity combined with the net revenues from progressing students, continues to deliver a worthwhile partnership arrangement for the university which enhances the internationalisation agenda.’  With the UK likely to be heading for a good enrolment year this might seem to be a good moment to double down on the investment after weathering some difficult years.  There’s also the possibility of even better times ahead if proposed changes to post-study work opportunities become reality.   

But as the joint venture enrolments have slipped first year, full-time international enrolments have also stalled for the University. Published data doesn’t provide insights into progression from the joint venture but as UK universities have become more competitive for international students it’s possible that more are leaking away to better ranked or more favourably located institutions.

Table 2 – University of Gloucestershire Non-UK Enrolments with JV Enrolment Overlay

Source: HESA Data and INTO Gloucestershire LLP Annual Reports

A closer look at the financial story also suggests some reasons for caution on all sides.  Recent Financial Statements show the University has written off £2.8m of debt from the joint venture over two years with INTO University Partnerships (IUP) writing off £3.8m of debt in the same period.  Current financial year data is not available but the debtor balance owed by the joint venture to IUP at the end of 2017/18 was £1.77m.

Table 3 – INTO Gloucestershire LLP Debtor Balance to IUP and Written Off Amount

Source: INTO University Partnerships Annual Reports

The joint venture has been unable to operate profitably in its first five years of operation despite measures to make ‘changes to the model of paying for services supplied by the two respective parent organisations’.  One ratio for pathway watchers to consider is that the joint venture’s cost of sales rose from 73% in the peak enrolment year of 2015/16 to 87% by 2017/18.  Significant reductions in operating expenses have been unable to make up for the resulting decline in gross profit, but are likely to have reduced revenue to the partners for services they provide to the joint venture.  

Table 4 – INTO Gloucestershire Turnover, Cost of Sales, Operating Expenses and Operating Profit 

Note: Operating loss shown excludes exceptional items and interest Source: INTO Gloucestershire LLP Annual Reports

A university statement indicates that the strategic view was initiated jointly.  Increasing levels of indebtedness, less revenue from the centre paying for services and little prospect of a significant shift in the ability to recruit students would certainly concentrate the mind. As the joint venture’s Annual Report notes – ‘the principal risk facing the LLP is the continued under-recruitment of students to its programmes.’.


The university have confirmed that ‘no decisions have been made’ and that ‘no compulsory redundancy notices have been issued to staff either employed by the JV, or employed by the University outside of the JV, as part of this process’ and it is to be hoped that INTO and the University of Gloucestershire can find a sustainable way forward .  But if not, it would follow INTO University of East Anglia London and INTO St George’s University as the third of the company’s joint ventures to close.  That would leave eight joint ventures and two wholly owned operations remaining in the UK.   

Most pathway portfolios have partnerships that struggle to recruit and are likely to come under the microscope when times get tougher or business models are disrupted.  That’s why there is likely to be more realignment, restructuring and portfolio shuffling as the sector matures. I once heard an industry leader comment that the trough between launch and profitability is becoming deeper and longer – the question is whether some vessels are too leaky to make it to the other side.   

Image by Arek Socha from Pixabay