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.
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.
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.
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.
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.
Detailed, consistent and up to date insights into pathway recruitment performance are often difficult to find. Some US universities give good data at a granular level and I reported on some of these in a recent blog. The completion of the reporting cycle for INTO’s Joint Ventures and wholly owned centres in the UK gives a comprehensive picture of their enrolments in the 2017/18 financial year.
For the ten entities – eight joint ventures and two wholly owned centres – that have been trading five years, total enrollments bounced back from the low point in 2016/17 but remain short of 2013/14 levels. This suggests that it’s probably still pretty tough going for the UK pathway market.
Table 1 – Average Enrolments for INTO Centres 2013/14 to 2017/18
Source: Annual Reports
At a
detailed level the drivers of growth were Newcastle and City which bounced back
after several years of decline and Queen’s.
Long-term partners East Anglia seem to have bottomed out after three
years of decline. Neither Stirling or
Gloucestershire, the most recent partners in this group, have got over the 200
student mark after five years.
Table 2 – INTO UK Centres Average Enrolments 2013/14 to 2017/18
Source: LLP Annual Reports
INTO centres
split educational oversight between ISI and the Quality Assurance Agency with
the former giving specific details on numbers enrolled and the latter being
less prescriptive. While the annual reports
noted above are averages across the financial year (August to July) in question,
the ISI education oversight into three centres gives deeper insight into the most
recent autumn intakes.
The distinction
between EFL and FE used in the ISI reports broadly distinguishes between
students on English Language only or Academic courses. Newcastle appears to have a significant
number doing both.
Table 3 – Student Population of three INTO centres – November 2018
Source: ISI Educational Oversight Reports
The other INTO Joint Venture is Newcastle University London which had an inaugural intake in 2015 and offers both pathway and degree courses. At the time of launch the university indicated that ‘…..in collaboration with INTO, our London campus is expected to grow to 1,200 students’. Three years in the average numbers for 2017/18 were 381.
Recent UK pathway activity from established providers has largely centred on adding well ranked partners with Study Group, Navitas and Kaplan gaining Aberdeen, Leicester and Essex respectively. Newer players have generally picked up less well-known names with Oxford International adding Greenwich and QA HE with Southampton Solent. With the UK Government launching its new strategy for international student recruitment it remains to be seen if the cake will grow for everyone or if the strong will dominate.
NOTE: Table 2 updated 16 June 2019 to include INTO Glasgow Caledonian University 2017/18 enrolment
The potential sale of INTO University Partnerships has created a lot of interest with a particular focus on the Joint Venture (JV) model it pioneered and how they are performing. A sharp-eyed and smart ex-colleague pointed me to Companies House, the United Kingdom’s registrar of companies, which offers access to annual reports for every JV as well as the wholly owned entities INTO Manchester and INTO London World Education Centre. They make for interesting reading.
No doubt the wonks, analysts and number crunchers will comb these reports over the coming months as part of their due diligence and financial interrogation. As The Skids minor-hit of 1979, Into The Valley said – its ‘time for the audit, the gathering trial.’ But for this blog I am going to focus on enrolments because that is the area where most pathway providers claim they bring expertise, investment, global reach and commercial nous which add up to student recruitment that universities cannot match.
The individual filings appear to be consistent in reporting the average number of students in each Centre during the year. Table one shows these for ten entities operating in the 2013/14 Financial Year and still operating in 2016/17. This excludes the now closed St George’s University JV and the INTO Newcastle University London JV established in 2015.
Table 1: Yearly Average Enrolments at INTO Centres
*Manchester and London are not joint ventures. Their parent company is INTO University Partnerships Source: Annual Reports 2013/14 to 2016/17
There will be many drivers for enrolment performance and as my previous blogs have indicated there have been winners and losers amongst universities over the past few years. Many in-house international offices have secured outstanding results and some universities have received strong support from the performance of their pathway partners. The picture for INTO looks mixed with only the Queen’s and Stirling JVs showing an increase in average numbers enrolled.
What also interested me was that I once heard a pathway leader explaining to a worried Vice-Chancellor that the period from start up to profitability for a pathway was ‘deepening and widening’. Both Gloucestershire and Stirling JVs were in start-up mode in this period having been incorporated in 2013. But their fortunes seem to have taken different directions with the latter forging ahead as the former has fallen back. It would be no surprise if pathways at more lowly-ranked universities were finding it harder to make progress under increasingly competitive conditions.
We can also see that even some of the pathways at well-known top 30 universities, Newcastle and East Anglia, have had a pretty torrid time in terms of enrolments. Newcastle enrolments fell by 24.3% from their peak in 2014/15 and East Anglia by 17.5% in the same period. City, a relatively well-known university with strong international intakes and a London advantage, saw numbers fall by 25.5%. This suggests that even well-established partnerships with big name partners are not a guarantee of successful enrolment.
The university partners are, of course, still securing students who progress from these pathways but this scale of decline is unlikely to be made up for by improved progression rates or increased fee levels. My recent blogs have demonstrated that both Newcastle and UEA have seen their overall international student fee income declining over recent years. And while INTO University Partnerships’ share of the JV profits is not the only stream of income to its business it is reasonable to assume that the company would prefer operating profits to losses.
For INTO, and the pathway sector more generally, in both the UK and the US the challenges are not going away any time soon. These include the growth of favoured locations such as Canada, Australia and Europe, the emergence of new destinations and particularly those in Asia, and the ever-present spectre of improving on-line delivery and in-country tuition improving English-language levels.
Tennyson’s poem, The Charge of the Light Brigade, provides an apt metaphor. He wrote that as the cavalry charged ‘into the valley of Death’ there were ‘cannon to right of them, cannon to left of them, cannon in front of them’. There were survivors but of the original 600 Light Dragoons, Lancers and Hussars in the charge fewer than 200 were able to re-assemble with their horses.
Over a billion dollars has been invested in private pathway providers since 2010 as the prospects for growth in the US and UK seemed bright. If there is a next round of deals for those providers – Study Group have also been for sale recently – it seems likely that the price must reflect the market challenges. If not we may recall that, as French Marshal Pierre Bosquet reportedly said of the Charge, “C’est de la folie” — “It is madness.”
*Manchester and London are not joint ventures. Their parent company is INTO University Partnerships