Tag: university pathways

Trump, Tech and Tomorrow is Another Day

We are just a few days from the annual Open Doors announcement and it will be accompanied by the Fall 2024 snapshot.  But there is some merit in getting underneath the hood of individual institutions to see what the trends might be and think about what might happen next.  Focusing on four of the INTO University Partners “comprehensive partnerships” where universities give reasonable levels of Fall 2024 enrollment detail also gives a sense of how traditional pathway might be doing.

It’s a mixed bag with Oregon State University (OSU) still becalmed, St Louis University (SLU) appearing to be over-exuberant in its growth ambitions, the University of Alabama Birmingham (UAB) making steady progress and George Mason University (GMU) stalling.  A top-level review of the three public universities suggests that UAB wins on value1 but consideration of their website and positioning suggests that they have integrated thinking about and appealing to international students in a more fundamental way than some competitors2.  As more US universities become active in pursuit of international students this holistic approach is likely to be increasingly important.

There does not appear to be any sign of a revival in the number of students coming from China, either in direct enrollment or through pathways.  The situation with visa refusals and delays for Indian students has been commented on in several media and appears to be having a dampening effect.  The US need for STEM students continues and it will be interesting to see whether the incoming President’s increased engagement with the “tech bros” gives momentum and follow through on his Green Card promise.

The reality is that the underlying dynamics of international recruitment have changed as the main sending countries have shifted.  Promises of post-study work opportunities would be a significant enhancement to the traditional lure of the US and students will often overlook the internal politics of a country if getting a visa and a job is straightforward.  It is arguable that even a “frontal attack” on university  freedoms is unlikely to deter the majority of students seeking a career in the US.       

Oregon State University

The first INTO partner in the USA, Oregon State University made no progress on rebuilding its international student numbers in Fall 2024.  Enrollments are still below 2012 level and undergraduate numbers are continuing to drift down from a peak in 2017.  Year on year the number of Chinese enrollments has fallen another 23% (to 262), students from India are down 4% (to 375) and the only bright spot is students from Taiwan up 27% (to 223).

Source: OSU Office of Institutional Research

The INTO Oregon State University joint venture continues to struggle and is down 63% on its pre-pandemic enrollment.  While the Fall enrollment is up by 44 students3 to 301 this remains below the numbers achieved in 2020 and 2021.  All this despite the joint venture launching a special “Jump Start” employment program for international students in July 2024 to help drive enrollment.     

Source: OSU Office of Institutional Research

St Louis University

As failures in forecasting go St Louis University’s (SLU) well publicized enrollment of only 300 additional international students against a target of 1,300 isn’t quite in the class of Lord Kelvin’s 1895 claim that “heavier than air flying machines are impossible”.  But for those now trying to find savings of $20m in the year the resulting shortfall looks pretty painful.  It could be a sign that for some US universities the reliance on enrollment from India for growth brings increasing levels of risk.

On the face of it, SLU’s targeted growth must have seemed plausible given that the year before they had increased the numbers enrolled from India by 1,775.  Having all your eggs in one basket (with SLU having 76% of its international students from India) is rarely a good idea and the shortfall brings the F1 visa trends into sharp relief.  An excellent article in University World News by Ragh Singh suggests that from January to August 2024 there were 39,000 fewer F1 visas issued to Indian students than in the same period for 2023.

Source: St Louis University Office of Institutional Research

The INTO SLU joint venture pathway operation became wholly owned by INTO in August 2021 and its enrollment numbers are not publicly available.  As the official language of both Ghana and Nigeria is English it seems unlikely that the modest growth in direct student enrollments from these countries are feeding into the pathway.  There is no sign of a revival in enrollments from China. 

St Louis University Direct Student Enrollment – Main Countries

201920202021202220232024
India726517066424392620
China309233166108111101
South Korea282125586974
Nigeria19920405656
Ghana7911182946
Saudi Arabia645341404140

Source: St Louis University Office of Institutional Research

University of Alabama Birmingham

The University of Alabama Birmingham (UAB) is another “comprehensive partner” of INTO and looks to be making steady progress on international student recruitment.  UAB is probably helped by featuring regularly as being good value for international students as well as featuring well in external measures of quality. In Fall 2022 “just under a third” of international students were from India and it is a reasonable bet that this percentage has increased.

August 2023 saw a strong media item featured on WBRC News which could be a model for universities anywhere in the world trying to emphasis the local economic and cultural value of international students. Shadi Martin, Dean of Graduate School and Chief International Officer makes the point that, “It used to be that we had a lot of students who came from China, that number has shifted.  But we are seeing a significant number of students coming from India right now.  We have students coming from the Middle East [and] Africa.”

Source: UAB Office of Institutional Effectiveness and Analysis

At the joint venture INTO UAB pathway level the university does not split out nationalities.  The pathway appears to have recovered reasonably well from the pandemic with a particularly strong showing in Academic English in Fall 2024.  All looks set fair.

Source: UAB Office of Institutional Effectiveness and Analysis

George Mason University

George Mason University (GMU) does not provide a breakdown of its international student enrollment numbers until it publishes its Facts and Figures Yearbook.  The best approximation is the Out of State student number of which international students have been a growing proportion.  In Fall 2024 the Out of State FTE fell slightly on the previous year which may be an indicator that international enrollment has fallen.  

Source: George Mason University Office of Institutional Effectiveness and Planning

The joint venture partnership with INTO had been making a slow recovery after the pandemic but has suffered a setback with a 16% decrease in enrollment year on year.  This takes it back to levels last seen at the onset of the pandemic.  It’s only 11 students fewer but seems to reflect the picture at the overall university level.

Source: George Mason University Office of Institutional Effectiveness and Planning

NOTES

  1. It is always difficult to compare like for like in terms of value.  Some comparison tools were used to make this assessment but the author accepts that there may be other ways of considering this evaluation.
  2. This is a personal and qualitative assessment based on several decades of experience recruiting international students for universities.
  3. This number is based on the year-on-year reporting.  There appears to be an unexplained adjustment to 2023 numbers in the 2024 publication.

Photo by NASA on Unsplash

A 71.6 Million Dollar Question and More

US-based film and TV courtroom dramas have been beloved by the British for many decades.  From 12 Angry Men and My Cousin Vinny to The Lincoln Lawyer and Goliath they all seem so much more glamorous and edgy than Kavanagh QC and Rumpole of the Bailey.  But for organizations in the UK higher education sector, closer encounters with US law can be costly in financial or reputational terms, in a land where being separated by the same language may be just one of the problems.

The court case between INTO University Partnerships (INTO) and the University of South Florida (USF) began in 2022 and shows no sign of concluding any time soon.  Court filings have now given some insight into the amount of damages that INTO may be seeking.  Set alongside the legal costs, some of which will be considered at a hearing on July 161, there is a lot at stake.

Nearly 30 British universities have been listed as clients in a case bought by the United States of America ex rel HITROST LLC against Study Across the Pond, LLC and John Borhaug last month2.  The allegation is that their arrangements flouted a ban on incentive-based payments and that the defendants “knowingly caused” the universities to make false claims for federal student aid.  While the universities are not listed as defendants there are several issues they might want to consider about contractual arrangements and internal controls, if the Complaint is accurate.

It’s all the more important when the relationship between universities and agents is under closer Government scrutiny. While the sector is trumpeting its Agent Quality Framework (AQF) the concept of self-regulation may not be enough to prevent firmer regulatory oversight. Some issues around the AQF are considered in this blog.

The summaries and comments below should not be taken to imply any views on the merits of the cases or the legal issues involved. These are complex issues so references and links are given for those who wish to delve deeper.  Material is provided in good faith and will be amended if an authoritative source provides more accurate information.          

Runnin’ Down A Dream

The court case between INTO and USF3 has rumbled on since my last update in January 2024 and looks set to run for most of the rest of the year.  The foundations of this dispute were covered in my  first blog on the matter in August 2022. The case is still in the discovery phase and there are regular filings with arguments and counter-arguments from both sides.       

Perhaps the most interesting point is that there is now a dollar amount on the size of damages INTO may be seeking.  A filing by USF on 31 May4 notes “INTO’s damages report, by which it seeks $71.6m in damages…”.  This report is one of two produced by INTO experts, with the other considering the solvency of the joint venture.  USF has served its own expert report “related to damages it has suffered with respect to its counterclaim..”.

One impact of the expert reports is that there has been a request to extend the time for “rebuttal expert reports” from June 17 to July 11 with the 24-day extension then rippling through all other deadlines in the Discovery Schedule.  If agreed, that would lead to a deadline of October 31 for the completion of serving and  rebutting expert reports then filing and hearing dispositive and Daubert motions.  The motion notes that the extended time would also “facilitate the parties’ ability to resolve any open discovery issues..”.

While this continues, INTO is appealing5 against the summary judgement6 of the Court in favour of USF that “the SHA [Stockholder Agreement] terminated once USF sent the letter stating that it terminated the USA [University Services Agreement], a Project Agreement.”  In this judgement the Court made it clear that it was not deciding “..whether USF breached the USA or the duty of good faith and fair dealing when it terminated the USA in April 2022.  Counts II, III, IV, VII, VIII, IX, XII and XIII against USF remain for further disposition.” There seems to be a long way to go.

Do You Want To Know A Secret?

Before getting into some of the lessons and thoughts for universities raised in the Study Across the Pond (SATP) case there are some general and contextual points. The company filed a Certificate of Cancellation with the Secretary of the Commonwealth of Massachusetts in January 2024, citing the termination of business operations as the reason for cancellation. Across the Pond – Study in Britain Limited remains listed at Companies House in the UK with John Borhaug as a director and its website lists 86 UK universities.

The UK listed company is on the British Council Certified Agent database where it is noted “Education providers should seek appropriate legal advice on contracts” which may have some resonance for universities listed in the US proceedings. The database links back to the British Universities International Universities Association (BUILA) who worked with the British Council, Universities UK and UKCISA to establish the UK Agent Quality Framework (AQF). Unofrtunately, but perhaps symbolically, The Good Practice Guide for Providers Using Education Agents, link on the BUILA site leads to a 404 error page.

It is claimed that “Nearly all universities in the UK have now signed up..” for the AQF but as far as I am able to find no list of signatories exists which is hardly an aid to transparency for students. We know from Enroly that their partner Bangor University is one of them (more on that below) but this should be well-signposted information that is freely available. There are the usual signs here of a sector that would like to be left to self-regulate but which is less than well organized or communicative once the initial excitement and headlines caused by the announcement of a new initiative have passed.

Money Changes Everything

The Study Across the Pond (SATP) and John Borhaug case was covered by The PIE in early May and lists UK universities7 who were clients of SATP and “participated in federal student aid programs under Title IV of the Higher Education Act, and presented at least one claim for payment from those programs to the Department of Education between January 1, 2015, and the present.” Essentially, incentive/commission payments to agents are not allowed if a student is receiving federal student aid. While the universities are not defendants the allegations contain several pointers towards potential gaps in university processes, checks and balances.

Any case where there is a suspicion that universities “made false statements” or “withheld information” to independent auditors must be taken seriously.  Assertions that the institutions were submitting “false and fraudulent” claims to the US Department of Education which were “actively violating the Incentive Compensation Ban” should be ringing alarm bells at the most senior levels. Issues around internal financial controls, fake contracts and purchasing disciplines are at stake even before you get to potential reputational damage.

One of the more detailed examples involves Bangor University.  The Complaint suggests that in February 2019 the university agreed to pay commission to SATP for recruiting students, including those from the United States.  It is alleged that in early 2020 the University asked if it could put a ‘Marketing Agreement’ in place for the US “in case of audit by [the Department of Education]” with the agreement presented as being a flat rate while accepting that the amount payed would be “the equivalent of what commission would have been.” 

In March 2022 the university was considering what material to provide the Department of Education as part of its re-certification application.  The Complaint asserts that “Bangor University’s Head of International Recruitment told that employee not to send the Department the original 2019 tuition-sharing contract with defendant Study Across the Pond.”  It is claimed that this document was not sent, “effectively hiding its incentive compensation arrangement with the Defendants from the Department of Education.”

While several universities appear to have queried the legality of commission payments in the context of the Incentive Compensation Ban they seem to have accepted the word of SATP who, “consistently advised foreign schools, including the Defendants’ Clients, that their activities were not subject to the Incentive Compensation Ban.” However, the universities with concerns were invited to enter into “sham contracts” that purported to provide an annual fee for general marketing and promotion with the proviso that “the annual fee happens to be the equivalent of ‘commission’ on any students on the lists who actually enrolled.”  Phrases like “play it safe”, “in case of audit” and “..as long as we (university and [S]ATP) understand how the annual amount is calculated then that’s all that matters, since it won’t be written into a contract of any kind” were allegedly used in communications.  

This type of language should have been troubling for the international office teams and any senior university officials they discussed contracts with. If the universities were acting in good faith in accepting SATP’s advice about their status as not being subject to the Ban there would seem to be no reason for changing the contract. Changing the contract to deliberately obscure the basis of the payments seems a slippery slope which seems difficult to justify.

Finance Directors in the institution may be asking how payment was being signed off and by who when a “fixed fee” contractual sum became a different amount to match the unwritten commission payment.  This seems an inevitable consequence of the arrangements put in place.  It may also be interesting to watch whether the US Department of Education allows universities that, it is alleged, participated in this behaviour to continue to be certified in the context of the Direct Loan Program.

NOTES

All the sub-headings are song titles from songs. Sequentially, the original artists were Tom Petty (as a solo artist), the Beatles (written by Lennon and McCartney but sung by George Harrison), and The Brains (although probably better known for the cover version by Cyndi Lauper).

  1. Filing # 198160868 E-Filed 05/13/2024 12:07:44 PM
  2. Case 1:21-cv-10274-ADB in the United States District Court for the District of Massachussets
  3. The terms INTO and University of South Florida are used as short forms for the range of corporate plaintiffs and defendants. Full details and all public documents reference in this blog can be found through https://hover.hillsclerk.com/html/case/caseSearch.html the Hillsborough County Clerk of Courts search facility. Insert 22 for the year, CA-Circuit Civil for the Court type and 006001 for the case number.
  4. Filing # 199628319 E-Filed 05/31/2024 05:41:44 PM
  5. Filing # 198701412 E-Filed 05/20/2024 02:01:54 PM
  6. Order Granting Summary Judgement. January 31, 2024
  7. The full list is Aberystwyth University, Bangor University, University of Brighton, Cardiff University, University of Chester, University of East Anglia, Edinburgh Napier University, University of Essex, University of Exeter, University of Greenwich, University of Hertfordshire, University of Kent, Kingston University, University of Lancaster, University of Leeds, University of Leicester, University of Lincoln, University of Liverpool, Loughborough University, Oxford Brookes University, University of Reading, University of Sheffield, University of Southampton, University of Stirling, University of Strathclyde, Swansea University, University of Winchester, and University of York.  

Image by Gerd Altmann from Pixabay

Roll on up for the greatest show in UK higher education

Text first published in University World News (08 June 2024)

The roller coaster ride of political fortune and its impact on international student recruitment continues to create a feeling of instability in higher education sectors across the globe. With talk of banning ‘Mickey Mouse degrees’ a feature of United Kingdom Prime Minister Rishi Sunak’s opening week of pre-election policy statements, the amusement park comparisons seem increasingly apt.

Particularly so when universities around the world seem addicted to pursuing gravity-defying, adrenaline-fuelled recruitment targets where the risks may increasingly outweigh the benefits.

More troubling is the possibility that the failure of universities to engage sufficiently to gain widespread public support has left them open to increasing levels of political game-playing and interference.

In several countries the fundamental value of universities and degree-level education is being questioned as never before and the intersection with immigration policy has become a toxic mix.

Where these problems are compounded by economic difficulties and a disinterested or increasingly hostile public, there is a real need for institutions to avoid being seen as theme parks run by the aloof, rich and privileged.

A Very British problem?

Universities around the UK have been finding it difficult to know whether to groan about the ending of dependant visas for postgraduate students or cheer as the Migration Advisory Committee and government confirmed that the Graduate Route to post-study work remained
open.

Politicians are sending conflicting messages, with Lord Cameron, the foreign secretary, saying: “There’s no limit on the number that can come” and aligning with Lord Bilimoria who called for ‘one million [international] students’.

Meanwhile, Lord Jo Johnson, an ex-education secretary and chair of FutureLearn whose seat on the Apply Board advisory board gives him a wider range of perspectives, cautioned: “The economic benefits are not enough to offset wider political concerns.”

In a recent blog, I drew several comparisons between the current dynamics in the UK and the themes of the 1987 British cult classic film Withnail and I. Critically, one character says: “Politics, man. If you’re hanging onto a rising balloon, you’re presented with a difficult decision. Let go before it’s too late or hang on and keep getting higher, posing the question: how long can you keep a grip on the rope?”

Some institutions are a long way from the ground, with the University of Hull, as just one example, registering a year-on-year increase of 1,207% (from 70 to 915) in students from Nigeria in 2021-22.

The folly of relying on continued growth at such pace is clear. Even before the restrictions on dependant visas, it was evident that some Russell Group institutions could not compete for recruitment from key markets with their better-placed peers in the group. They will be forced to hunt further afield for students and their presence will bring harsh competition for universities further down the feeding chain.

This comes at a time when recent agent surveys by INTO have indicated that the UK’s relative attractiveness, compared to the United States and Australia, has declined substantially since 2021.

The 65% year-on-year decline in the Nigerian naira against the UK pound has put a far more serious dent in recruitment than the loss of dependant visas.

A growing propensity for students from China to consider alternative countries and the affordability advantages of nations outside the big four recruiting countries are a growing drain on valuable sources of student interest.

Successive generations of international officers have found that economic swings are par for the course. The decline of the Tiger Economies in the late 1990s was a significant factor and there have always been ebbs and flows in national currencies, government sponsorship and other factors.

It seems possible, however, that we are now seeing more fundamental and long-lasting change and that the era of, what some consider, academic imperialism is in an accelerating doom loop.

Sticking plasters for structural failures

A subplot, as reported in University World News in March, has been the announcement by over 50 British universities of cutbacks and redundancies, which created an unlikely alliance between unions and university bosses seeking additional government funding.

However, the BBC noted this week that “universities in Yorkshire and Lincolnshire have spent over £100 million [US$128 million] making more than 6,000 staff redundant since 2015”. That raises the reasonable question as to whether some institutions with long-term declines in attracting domestic students because of courses, locations and-or poor management, have used international fees as a sticking plaster to cover wounds requiring surgery.

It’s a complex situation where the fundamental structure of UK higher education and its funding are coming under closer scrutiny. With political and public support far from guaranteed, this has led some voices in the sector to suggest that a more constructive approach would be to recognise and respond to broader concerns and constraints.

Professor Wendy Alexander, vice-principal (international) at the University of Dundee, suggested a need to be more “self-reflective”; David Pilsbury of Oxford International Education Group has said that “we still talk to ourselves too much”; and Chris Husbands, former vice-chancellor of Sheffield Hallam University has cautioned that “we can’t expect to be given more simply to carry on doing the things we are doing”.

Before the announcement of an election and the removal of a threat to the Graduate Route, the sector seemed willing to consider these points. Subsequently, it has gone very quiet on issues such as data transparency, grade inflation and preferential treatment for international students with lower A-level grades or equivalents.

This seems a retrograde step at a point when the Conservative Party is campaigning on a platform that could close down one in eight university courses and the Labour leader has clarified a political choice to fund the NHS rather than reduce or eliminate tuition fees.

It Could Be Worse

Despite all of the above, it seems possible that the relief provided by an intact Graduate Route combined with visa issues and poor publicity in Australia and Canada could come to the rescue of the UK.

Research has shown that students are applying to more countries and it is likely that they are willing to hold out on decision-making until the last possible minute.

The US stepping up its game in terms of visa meetings in India may be another fly in the ointment for competitor countries, although there are late-breaking rumours of a deterioration in recruitment from India that will be bad news for everyone.

If the UK sector has been on a roller coaster ride, both Australian and Canadian institutions could probably make a case that they have whiplash from hastily introduced and poorly considered policies. It all seemed so promising for Australia when the Universities Accord report was produced in February 2024 and seemed to produce exactly the sort of long-term framework universities would prefer to guide decision-making.

However, Mark Scott, vice-chancellor of the University of Sydney, immediately noted that, despite underfunding being acknowledged, “it is perplexing that the only revenue-raising measure proposed is a tax on universities themselves”.

Since then, the destabilising Draft International Education and Skills Strategic Framework, with a cap on international enrolments from January 2025, has drawn strong criticism and both major parties have been competing in their anti-immigration rhetoric, with international student recruitment caught in the crossfire.

Actions on “non-genuine students”, spikes in visa rejections, changes to students’ proof of savings, threats of “significant” rises in visa fees and arguments over the impact of international students on housing availability are just some of the issues. It’s a potent cocktail that can be nothing but damaging for recruitment.

In Canada, the January 2024 federal government announcement of a two-year intake cap on international student recruitment was balanced by the exclusion of postgraduate students and the availability of an extended three-year post-graduation work permit.

There seemed little doubt that the changes mitigated against private colleges and the doubling of the cost of living requirement for students was an overdue but unwelcome addition. Had it ended there it seems possible that the storm may have blown over.

But the underlying tensions about routes to permanent residency flared again in May, with Prince Edward Island’s changes to the process leading to protests and even hunger strikes.

As with Australia, there have been, at federal and provincial level, assertions about rapid international student growth bringing “… pressure on housing, health care and other services”.

Little wonder that IDP’s Emerging Futures research from March 2024 suggested that Canada had suffered most in terms of student popularity at that time.

IDP’s research also pointed to the US becoming the top-choice destination for the first time and being the top choice for prospective students considering changing their choice of study destination.

After issuing more student visas in India in 2023 than ever before, the US embassy in India started two weeks earlier this year and increased capacity to meet demand. The US for Success Coalition is mounting a letter writing campaign urging Congress to “improve student visa processing delays and high denial rate in the Global South”.

Castles in the air or feet on the ground?

The three recruiting countries reaching levels of international student intake that are a material percentage of overall recruitment and tuition fee income seem to have reached a tipping point where government attention is increasingly focused on economic, social and political consequences.

Anti-immigration rhetoric, perhaps driven by genuine public concern, is one aspect of this, but there is a broader sense that the role of higher education in a country’s broader economic and workforce planning cannot be left to an untidy aggregation of autonomous, self-governing organisations.

Institutions must take care not to allow themselves to be positioned as educational amusement parks where ivory towers have replaced magic castles and attracting more, higher-paying customers has become more important than their domestic stakeholders.

Alan Preece is an expert in global education, business transformation and operational management and runs the blogging site View from a Bridge.

Image by Pasi Mämmelä from Pixabay

MAC Review with No Chips at Graduate Route

No doubt at all that the Migration Advisory Committee (MAC) Rapid Review of the Graduate Route and its recommendation of “retaining the Graduate route in its current form” is good news for the UK higher education sector.  But amid the sound of high-fiving and back slapping from universities and sector bodies a close read of the Review still leaves scope for Government mischief making.  It should also be remembered that MAC’s recommendations of 2018 on a “more restrictive post-study work route” of 6 months for Master’s students was largely ignored. 

Political antennae will be twitching at the sound of Robert Jenrick’s post that “if you order white paint, you get a whitewash” and MAC has left a few open goals if James Cleverly chooses to score with his party’s right wing.  There’s an open invitation to leverage the sector “to support the government’s desired labour market objectives for the route” which could mean manipulation of Student visas as well as Graduate Route visas. He will also have his eyes on the year-on-year visa announcement of Immigration System statistics on 23 May as he considers the next steps.

Sticking to the Exam Question

The Review chose to largely confine itself narrowly to the question about the Graduate Route and declined to take the bait on some associated issues.  In doing so, however, it may have offered a road map for the Home Secretary to thank it for its work, accept the plaudits around the dependent visa reductions and then pursue a new quarry – the student visa.  He can diminish recruitment at source while celebrating that the Government’s introduction of the graduate route was correct.

The quoted objectives of the Graduate Route are so benign and wooly that it is difficult to know what to make of them:

  • “Enhance the offer to international students..ensure the UK remains internationally competitive”
  • “Retention of talent..enabling employers to recruit skilled graduates…contribut to the UK economy”
  • “Increase the number of international students in higher education…increase the value of education exports”

Of course, the Graduate Route achieves those aims because almost any competitive post-study work offering would.  What MAC notes in several passages is that changes to the student visa (such as dependent visas) are where the action is.  Yet on page 32 they are keen specify “we did not examine distinct abuse of the Student route and note that the government did not ask us to do so.” There seems to be a decent signpost for Cleverly if he chooses to follow it.

There May Be Trouble Ahead

If one was looking for trouble and reading between the lines, one can see where the Minister may choose to take guidance from the Report.  Specifically, there may be ways of managing Student route visas to give preference to high-ranking universities (however defined), supporting specific geographical locations, penalising institutions recruiting students who seek asylum and controlling the role of agents.   

  • MAC declined to engage in any assessment of whether the route secured the “brightest and the best” but nodded to the High Potential Individual visa use of league table rankings in its provider groupings while noting that “international postgraduates from lower globally ranked universities are more likely to go on to the Graduate route.”  Explicitly it says, “If the government’s aim is to retain bright international students… and by this they mean those who attend universities ranked the highest globally, then this data suggests that the Graduate route may not be attracting the global talent defined in this way.”

Other areas for caution or limited support in reflecting the value of international students are where MAC:

  • indicated that the data suggests  “students may be moving to London for work after graduating from universities in other parts of the UK”.  In that respect there may be limited evidence for international graduates contributing to any levelling up agendas;
  • reflected the difficulty of determining numbers in employment but showed a 79% match rate for Graduate visa holders and HMRC records and 68% as PAYE employees.  They caution that neither is comparable to a “normal” employment calculation.  Some would argue that this leaves some 20-30% whose employment status is, at best, unknown. It was quickly seized upon by some Conservative party commentators;
  • suggested they are “likely [to] make a small positive net fiscal contribution” which would suggest this is not a key issue for government consideration despite the efforts of the sector to suggest otherwise;
  • noted the “recent reports of an increase in asylum applications” but indicating that is an issue the government should address directly if it is a concern.     

On direct abuse there is some damning with faint praise. Basically the Review notes that there are almost no rules to be abused (which could be seen as a sign of laxness) and limited data to track whether they are overstaying. Comments include:

  • “limited number of criteria a student needs to meet to apply”,  “few restrictions for what those on the route are allowed to do in the UK” and “beyond refusal rates, there are no quantitative data sources”
  • “little evidence available on the numbers who are overstaying their visa length. The Home Office was unable to provide data on the rate of overstaying on the Graduate route.”

The biggest issue related to the potential exploitation of international students by recruitment agents “when applying under the Student route”.  This is a departure from the rest of the Review because MAC decides to very explicitly link the selling of the Graduate Route as a lure for students joining the Student Route.  They claim that HE providers and student representatives at roundtables agreed “regulation would strengthen the ability to eliminate the exploitation of students by bad actors.” 

A more heavy-handed regulation, particularly as MAC included both agents and subagents in the discussion could make for interesting times for commercial operations associated with universities.  While MAC noted that 57% of HE providers (responding to a Home Office survey) used student recruitment agents this would be 100% for aggregators and pathways.  With the growth of direct recruitment relationships with pathways operators the ownership of any quality and oversight obligations is likely to come even more under scrutiny.

Steady As She Goes (For Now)

If the government wanted MAC to provide it with hard evidence to close the Graduate Route down the gambit has failed and the sector can breathe a sigh of relief.  Short of a blatant, politically motivated disregard for the advice given and the evidence base produced the best presentation is to take the applause for introducing the Route and ensuring a globally competitive sector.  The window of opportunity for the current government to act is rapidly closing and without a clear steer from MAC it is difficult to see what the political upside is to radically changing the Graduate Route.

MAC has also provided the government with what it will consider political good news, in saying that the ban on foreign students bringing dependents was having a far bigger impact than expected.  Anything that gives Sunak a “fighting chance” of reducing net migration levels below 2019 levels before the election is likely to be received with open arms.  It’s probably a stronger case than arguing about the growing dependency of universities on foreign students.

After all that it seems appropriate to thank Professor Brian Bell and his colleagues for a decent job done in very short order and apparently without bias towards past observations.  The Review has highlighted some other aspects of student recruitment that are less palatable and it would be good if the sector took that seriously.  Perhaps some universities could also consider this a warning to moderate their approach to enrolment growth.  

Image by Enoch111 from Pixabay

Beware the Ides of MAC

Aficionados of ancient Rome will know that every month had an Ides. For March, May, July and October it fell on the 15th of the month while for the rest of the year it was the 13th. The Migration Advisory Committee (MAC) Review of the Graduate Route is due to report on the 14th of May so it seems possible the detail will become clearer the next day.1

Some predict a ritual and metaphorical assassination of the higher education sector to suit the political aims of the Conservative government. It is certainly likely to be a day when, just as in ancient Rome, debts become due. Will MAC deserve the line “Et tu Brutus” from the sector if it echoes, “I come to bury Caesar not to praise him”, in its thinking on the graduate route?

The announcement of the Review led to some frantic rearguard action from the higher education sector which was cut out of the usual, drawn-out Call for Evidence, at a point when the Government needs to reassert its credibility on immigration ahead of an election. There may be some glimmers of hope but the politics seem to be overwhelmingly negative. It comes when the sector is beset by other negative stories and some well-respected voices are suggesting it is time to accept there are problems that need dealing with.

Last Throw of the Dice

It is difficult to know whether the effort from Kaplan, HEPI and the NUS to produce “The Exchequer benefits and costs associated with the Graduate Route visa” in advance of MAC’s publication is going to help. The main argument seems to be that MAC would be remiss in not taking into account the tax return from increasing numbers of international students entering the workforce on the Graduate Route. At a single stroke the students resolve the sector’s funding issues and become a part of the solution to the UK’s debt problems.

We didn’t really need a long and technical paper to tell us that if people go into the workplace they pay tax and contribute to the Exchequer and that if you have more of them they pay more. What the paper doesn’t say is that a logical extension of this self-serving argument would be that if the period of post-study work was extended to five years or even indefinitely, international graduates would pay even more tax. It’s unspoken because, while more years of post study work would probably attract even more international students to UK universities, it would make the student visa look more like a route to residency which most agree is politically unacceptable.

One eye catching and unhelpful point about the report is that it estimates 21% of the Graduate Route visa holders are not in paid employment. That seems a big number and some might suggest that the number is even larger because those not in employment are less likely to respond to being asked their status. It will be interesting to see if MAC has got the linking of HMRC and visa records to give more insight.

A Government, of whatever political persuasion, is more likely to believe that if there are jobs to be filled the better answer is to deal with the UK’s long-term sickness issues.2 At a single stroke you reduce the cost of welfare, get the tax benefit of having more people in work and don’t have to pay the political price of relying on overseas workers. Both main parties know, from the sector’s own research, that the majority of the British public want the same or fewer international students.

Glimmers of Hope

Even if the Report doesn’t go a long way towards changing anybody’s mind there are other straws to cling to. Much has been made of the decline in student visas issued in the first quarter of 2024 being a strong signal for the Government not to “overcorrect” on the issue by taking further action. The Home Office deadpanned by saying that, “the full effect of recent policy changes and any other impacts” would not be known until the peak in applications in August and September.

The decline in dependent visas is a big headline number but commentators including Dave Amor have noted dependent visas are only back to 2021 levels and while main applicants are down “applications without dependents sounds like they are up.” There is also the impact of the decline in Nigeria’s currency driving some of the changes. For a Government under pressure from its own back-benches on immigration it seems unlikely the numbers are down enough.

In that respect, the timing of the MAC review is interesting in that Cleverly demanded a mid-May response without any clear or evident reason. It may be that he plans to take its recommendations and use them, either positively or negatively, for a publicity blitz around the release of the “Immigration system statistics, year ending March 2024” scheduled for 9.30am on 23 May, 2024. The platform provided by the first quarter figures, the MAC review, and then the yearly figures is a decent campaigning rhythm to reinforce his statement that “Over the coming months, we will continue to show the pace of our progress as we deliver the control the public rightly expect.” It may even be the first bit of positioning for a post-election leadership run.

Let’s Get Cynical

The politics of the matter seem simple and the defection of Tory MP Natalie Elphicke to Labour with the accusal, “It’s clear they [the Tory government] have failed to keep our borders secure and cannot be trusted” will only have hardened the lines. The imperative is to retake control of the immigration debate, challenge Labour’s position ahead of the general election and perhaps even reduce their flexibility if they form the next Government. The interests of the higher education sector do not even feature in that calculation.

The last Labour government has long been known for leaving the infamous note for the incoming Chancellor, “I’m afraid there is no money”. It haunted them in future elections and it is doubtful that the Conservatives will make the same mistake. Far better to hand Labour an impoverished sector and draw a distinctive line on post-study work rights that makes it even harder to patch over gaps in funding with international student fee revenue.

So, the Conservative’s would gain twice by limiting post-study work. The immediate gain is the impression of firm government, a populist stance on a divisive issue and a sop to the troublesome right wing of the party. In the longer term, presuming an election loss, it hands the incoming Government a significant and worsening university funding situation with limited room for maneuver without seeming soft on immigration.

Pathway Woes

Almost a sideshow for now are the other reviews set in motion when the Sunday Times set a hare running with its slightly ill-formed attack on international pathways. Universities UK leapt into action with a review by the Quality Assurance Agency that seems likely to report in June 2024 (if the link with the scope is correct). The Department of Education was instructed to “investigate allegations of bad practice by agents” although it’s a little difficult to find when any outcome is expected.

Pathway operators and by default universities could really do with the reviews not hampering the growth of International Year One programmes or requiring significant policing of agent activity. Times are tough enough already. Evidence of that came with the completion of reporting from INTO’s joint venture portfolio showing that INTO enrollments were still 23.6% down on 2018 for continuing joint venture businesses.

In a previous iteration of this graph in another blog and before reporting from INTO University of East Anglia, I had presumed that the joint venture would have made some progress in 2022/23. In reality there was a further collapse from 310 to 241 students year on year which puts it 62.8% down on 2018. The only bright spot was that the wholly owned Manchester operation hit record high numbers in the year.

Source: INTO Joint Venture Annual Reports

The success of INTO Manchester seems ironical given the probability that Navitas was favourite for the £150m Embedded International Study Center contract at Manchester Metropolitan University. Uncertainties around UK international student visas seem likely to have held up further progress at a point when Navitas must already have been smarting at losing the University of Leicester and University of Northampton as partners. Evidence of another pathway operator with some issues to resolve is Kaplan at the University of York.

Just for completeness, on what some consider the ‘big four’, are the problems at Study Group which were exacerbated by the Daily Mail singling them out in a front page splash as sponsoring 804 student who then claimed asylum. The Mail makes much of the “secret Home Office database” as the source of the story but at least as far back as March 2023 the UK Visas and Immigration Study Sector Brief was noting the trend. Any suggestion student visas are being subverted in order to secure a permanent place in the UK will be used as further evidence the sector is out of control.

Voices of (T)reason

In that context there was a small breath of fresh air from Professor Wendy Alexander at the recent International Higher Education Forum conference in May 2024. She is reported as urging the sector, “We really need to be a little more self-reflective about it. The first way to build trust is to concede there was a problem..”. In that respect she echoes a broader point made by ex-Sheffield Hallam vice chancellor, Professor Chris Husbands, who in July 2023 was suggesting the sector was in danger of “tacitly defending a system that it knows is not sustainable.”

Jo Johnson and Vivienne Stern have also been talking the language of avoiding “over-correction” and “serious overcorrection” which seems to be code for accepting that a correction was reasonable and maybe an acceptance that the sector has lost the argument for the status quo. Slightly off-topic but it was amusing to see Johnson suggesting that the Teaching Excellence Framework should be the guiding light for allowing universities to raise domestic fees. Of 228 universities in TEF 2023 only three were ranked as “requires improvement” overall (11 were requiring improvement on student experience and 9 on student outcomes). Basically, he meant all universities.

Tom Petty suggested that “the waiting is the hardest part” but there is good reason to think that the reality might become even tougher after May 14th. Even then, the sector’s problems aren’t all about international tuition fee revenue even though it has offered a sticking plaster for a few years. The old stock market dictum “sell in May then go away, don’t come back until St Leger’s Day” is a good idea for anyone considering UK universities or university pathway operators as a good bet. Come September some of the dust will have cleared and we may even be seeing the election warming up with policy statements on the future shape and size of higher education.

NOTES

  1. It doesn’t really matter if not. The headline just had to be written and justified.
  2. Both parties are focusing on the issue of the growth in long-term sickness and solutions are likely to form part of the election agenda. The Conservatives, not surprisingly, are calling it as ‘sick note culture’ while Labour has accepted that a problem exists and is “..threatening the future of the sustainability of our finances and the future of our public services”

Image by Gino Crescoli from Pixabay

In The Doldrums

The doldrums were a miserable place for sailors in the age of sail because it was an area where the trade winds converged but a lack of surface winds meant they might be becalmed for weeks in hot, muggy weather. It’s not a bad metaphor for the higher education sector as it awaits the Migration Advisory Committee (MAC) review on 14 May and reviews of pathway courses commissioned by Universities UK and the Government after the Sunday Times “cash for courses” reporting. All of this while the signs of recovery from the pandemic are patchy and international applications have foundered after changes to visas for dependents.

For pathway operators almost entirely reliant on international students the outcomes might make it feel more like the “horse latitudes”1 where it was suggested survival was about knowing what to keep what to keep and what to throw overboard. Rumours of delayed investments and potential sales are also swirling around the sector as the uncertainty makes the future even more opaque than usual. There are few guarantees of future growth.

The past month has seen a degree of information about some UK pathway performance in 2022/23 emerge as annual accounts have been published at Companies House. While the financial years of the main pathway operators are not consistent some of the major players and their operating subsidiaries2 do have similar year ends. This blog focuses on operations where figures for 2022/23 are available.

Navitas

Overall, Navitas had a strong year in 2023 (year ending 30 June 2023) with its overall financial statement indicating a rise from 7,605 to 10,869 student enrolments.

Source: Navitas UK Holdings Limited Annual Reports

However, Navitas has lost two universities from its portfolio for Autumn 2024 enrolments with the University of Leicester and University of Northampton both terminating their pathway college contracts. On the face of it the Leicester decision was surprising given that the Global Study Centre appeared to have a student enrolment driven turnover growth of over 50% from 2021/22 to 2022/23. Northampton’s figures are still pending.

At a more granular level there are still a number of operational reports at individual college level to come for 2022/23 but up until 2021/22 Brunel and Hertfordshire had shown consistent growth in turnover (generally confirmed as being largely due to student enrolment growth) since 2019 while the ventures at Portsmouth, Swansea and Cambridge Ruskin appeared to be struggling. The scale of Northampton and Leicester is relatively small by this comparison and it may be that enrolment numbers have not met expectations.

Source: Individual Annual Reports

During 2023 Navitas appeared to be the likely winner of the contract tender for the proposed Manchester Metropolitan Embedded International Study Centre. The £150m contract was due to start in November 2023 which was the point at which Navitas changed the name of an existing company (Navitas UK College Limited) to Manchester Met IC. Not a peep since then but it has been amusing to see INTO University Partnerships posting on LinkedIn about its relationship with Manchester Metropolitan University in recent days. Perhaps a reminder to the university’s leadership that there are options.

Navitas has also been among those at the forefront of the charge to introduce the International Year One pathways that have been of particular concern to some commentators because there is no comparable option for domestic students. It remains unclear if any of the reviews will specifically consider this route but any restrictions would be damaging for future recruitment. Having acquired Study Group’s interests in Australia last year it may be that the business will look for a similar boost in the UK.

INTO University Partnerships (INTO)

With all of INTO’s UK joint venture partnerships except UEA having reported on 2022/23 it seems that enrolments from continuing UK operations have not even returned to 2018 levels let alone 2019. The problems at UEA have been discussed at length and it seems possible that a more aggressive recruitment strategy from the university might begin to pay dividends. With joint ventures struggling there is a bright spot at the wholly owned INTO Manchester which saw a second year of strong growth and enrolments up at a record 1112.

Source: Joint Venture Annual Reports (INTO UEA 2023 enrolment is an indicative figure pitched just below the 2020 enrolment figure which would represent an increase of 61% on 2022). INTO Newcastle is 51% owned by INTO.

At a corporate level INTO’s adjusted turnover3 was up from £141m to £160m year on year in 2022/23. Although the portfolio is global there has been little evidence of accelerating growth in US partners, even for direct recruitment, and the shadow of the court-case with University of South Florida seems to lengthen in terms of time before resolution. The INTO annual report indicates that what were historically shown as joint venture debtors are now shown as loans to joint ventures with almost all at higher levels than in 2019.

INTO’s early USP of 30-year deeply embedded joint venture partnerships with universities appears to have lost out to third-party, shorter-term contracts in both the UK and US. Winning Lancaster University in 2023 must have boosted morale, even though it’s not a joint venture, but geographical location, high entry standards and lack of Russell Group glitz made the university a notoriously hard sell for previous pathway providers Study Group, so the jury is still out. In the absence of a differentiated offer, several partnerships already shuttered and no real sign of a return to the boom days it is not easy to see how the company reinvents and reinvigorates itself.

Rumours of a sale earlier in the year seem to have quietened down which is no surprise given the uncertainties facing the UK. However, a number of sources have indicated that Navitas were a suitor before the pandemic and a trade sale would at least offer the benefit of consolidation in the sector and significant overhead savings. The current trading outlook and sector uncertainties do not seem strong or certain enough to attract a premium price but if the future looks no brighter there may be little point in waiting.

Kaplan

Kaplan’s corporate year end is December so we won’t get that update until later in 2024 but their joint venture international college with the University of York has a financial year aligned with the INTO operations. The 2022/23 results make stark reading and underpin that even for Russell Group universities the path is not smooth. The University’s overall recruitment problems have made the headlines and the Kaplan machine seems to be having an equal struggle at pathway level. While specific student enrolment numbers are not published the turnover and operating profit figures suggest a continuing and serious decline.

Source: University of York International College Annual Reports

As a point of contrast, INTO’s joint venture with Exeter, another Russell Group university, has shown growth post pandemic. It is twice the size of the Kaplan joint venture and Exeter is probably a stronger international brand than York. The likelihood is that both will be affected even more as global competition bites and if recruitment from China does not pick up.

Sources: INTO Exeter Annual Reports

None of this is to suggest that Kaplan’s overall performance can be extrapolated from the situation at the University of York but coterminous financial year end dates at two Russell Group universities offer a reasonable point of comparison.

When Zones Converge

The doldrums is known more properly as the Inter Tropical Convergence Zone and while people are always keen to talk about “perfect storms” affecting the higher education sector it seems to me that the forces currently converging may be more like a deep freeze. Feynman argued that even at absolute zero atoms still have some motion but it is fair to say that movement could become the exception rather than the rule. It is not an attractive outcome.

NOTES

  1. The “horse latitudes” are about 30 degrees north and south of the equator. They are under a high-pressure ridge which creates a dry environment (unlike the doldrums which have moist air). The name derives from stories that ships that became becalmed had to throw horses overboard in order to conserve water. Alternatively, it is suggested horse effigies were thrown into the sea to celebrate working off what was known as “dead horse” debt. A third explanation suggests the use of the term “horsed” for when a sail ship uses a strong current rather than wind to progress.
  2. As a general guide, most universities finish their financial year on 31 July each year, INTO has aligned its corporate and joint ventures with that and Navitas seems to have settled on 30 June in the UK. Kaplan International Colleges UK Limited and Study Group Holdings UK Limited are both 31 December year end but the Kaplan joint venture with University of York has a 31 July year end.
  3. Three of INTO University Partnerships’ “Key Performance Indicators” have adjustments which mean caution should be exercised in interpreting them. Adjusted turnover removes discontinued operations of which there have been at least ten since 2015.

Image by 851878 from Pixabay

All For One and Each to Their Own

The notion that “the enemy of my enemy is my friend” is long established but often misguided and can create a false sense of shared interest, power dynamics and underlying realities.  UK universities appear to be united in defending themselves against perceived threats from Government action, media criticism and public opinion/apathy.  But loose coalitions of convenience and an unspoken agreement not to criticize each other publicly are unlikely to be enough to either win the day or manage the important business of shaping the sector for the future.

It is equally clear that the financial circumstances faced by individual institutions cannot simply be conflated as a problem driven by visa policy, domestic student fees or Government rhetoric.  A first step towards the future is to accept that some institutions face serious problems in even attracting sufficient numbers of students, and may need radical solutions.  Another might be to acknowledge that some university management doesn’t understand forecasting, the markets, competition and/or travelled too hopefully for too long, as the University of East Anglia appears to have done when acknowledging “for the third year running we fell short of our student recruitment targets in the home undergraduate student market”.

It would be sensible to look at what has happened to the money injected because of the benevolent international student environment announced in 2019 and whether the pace of recruitment was appropriate in terms of student experience, local services and public opinion.  Some universities appear to have built a significant cash pile which may help ameliorate any short-term falls in recruitment and others have chosen to invest the bounty in other ways.  Whether those investments were wise, sustainable or designed to maintain/increase domestic student recruitment through, say, a financial subsidy from increased international student recruitment requires a more detailed study.

This blog takes a relatively narrow look at two universities that might appear to have similar opportunities as part of a mission group of “world class research intensive universities”.  Using data that reflect 2022/23 international recruitment and tuition fee data rather than waiting for HESA to catch up, it suggests that one has problems pre-dating recent changes to the visa regime.  The differential performance in international recruitment demonstrates that even when recruitment conditions are benevolent the market makes choices to the benefit of some universities and the detriment of others.       

Hold Your Friends Close..

The current unity of the sector is shallow and self-interested and the UniversitiesUK claim of “142 universities One voice” is wide of the mark.  We have the Russell Group, University Alliance, MillionPlus, GuildHE, and Cathedrals Group, but saw the 1994 Group disband in 2013, shortly after several of its number jumped ship to the Russell Group. Any solutions to the sector’s funding problems needs to be even more granular and consider specific issues.

Even though the Russell Group has become the de facto face of higher education for the media and many politicians it is far from a unified and equal group of partners.  Colleagues are familiar with my description of a meeting of its 24 members as having the sophisticated six acting cool and sipping martinis in the corner while the regional city types lumber around drinking craft beer and showing off.  Members from outside England hang around the fringes trying to attract attention by channeling a moody, Celtic-fringe vibe and the remaining half a dozen wonder why they paid the cab fare to attend when nobody really wants to talk to them.

…And Your Enemies Closer

HESA data delays mean it is difficult to get a full picture of the most recent enrollment success or otherwise of Russell Group universities.  What was clear in the immediate period after changes to post-study work visas and up to 2020/21, was that there was a strong focus on Chinese students but with some notable names failing to keep pace.  At the recent PIE Live Europe event a University of Glasgow spokesperson indicated that the most recent intake (presumably 2023/24) was “last year we had one of our strongest undergraduate performing years” despite it being the first time in a decade the university had not hit or exceeded its targets    

Sympathy should be tempered, for a number of reasons.  Firstly, universities have something of a habit of inflating enrollment targets in the good times so missing them might simply be a result of hubris in setting objectives.  More importantly, the University’s “Overseas Students” income rose by 10 % (£27.6m) to £303.8m from 2021/22 to 2022/23 and is up a whopping £166.5m since 2019.  While conscious that finance can be a tricky business the measures on operating surplus and net cash seem to support the Director of Finance’s view that they can “continue to develop,
invest and deliver on our strategic plans enabled by strong financial results.”

 Source: University of Glasgow Reports and Financial Statement 

But, as a reminder that the Russell Group university experience is very mixed, the University of York, reported in January 2024 a £24m deficit partly because “International student numbers decreased in the year following high recruitment after the Covid pandemic and reflecting changed geopolitical circumstances.”  It might be equally plausible that the moody, Celtic-fringe types from Glasgow, along with other Russell Group members, stole genteel York’s lunch money by competing more effectively for Chinese and other students. 

We will know more when the long-awaited HESA 2022/23 data emerges but the UCAS end of cycle data does give a sector wide insight into what happened at undergraduate intake level in 2022/23 and we can see that the fortunes of the two differed dramatically.  Glasgow has consistently grown non UK/EU applicants since 2018/19 and after a sharp hike in 2019/2020 has maintained the number of applicants accepted.  York saw a small decline in applicants and a much larger decline in applicants accepted from 2021/22 to 2022/23.  It may simply be that faced with Russell Group options international students are choosing the biggest name, best ranked or most competitively marketed.

This hypothesis might be supported by the fact that the University of York appears to have been forced to take more non-mainstream international applicants to even reach a declining total of acceptances.  The University of Glasgow has been able do exactly the opposite and secure increasing numbers of students through the mainstream route. Mainstream applicants apply through UCAS before the main deadline of 30 June and can nominate up to five institutions to consider their application.  

One interesting feature that does combine the two universities is that Kaplan is the operator of the International College for both.  In this respect the University of Glasgow annual report for 2022/23 notes that its “excellent..financial results” were achieved despite “..a decrease of £3.7m in partnership income from Glasgow International College Kaplan” and the annual report of the University of York International Pathway College LLP shows a that Operating Profit declined from £2m to £900k in the year to July 2022/23.  The University of Glasgow Pathway College entity has a different financial year end so it is not possible to provide a direct comparison.

The University of Glasgow appears to be slightly more expensive than the University of York for international students and the entry grades seem reasonably equivalent.  The apparent inability of York to compete effectively for international students despite this may be one reason for the January 2024 report that the University of York was “lowering admission requirements for some international students in light of “financial challenges.”  They may still find that the market votes with its feet.

Winter Is Coming

Sometimes the higher education sector can seem like a retread of Game of Thrones including “..several noble houses..a complicated, multiparty war…shifting conflicts, alliances, and betrayals.”  Driven by expediency many of the protagonists join together in a final battle to defeat the Night King and the White Walkers but in the end the Iron Throne is melted and the system governing Westeros is radically altered.  The Migration Advisory Committee (MAC) review may be the sector’s Drogon or simply signal that winter is coming.

What will remain true is that the sector is not a monolithic entity and it is unhelpful to position it as such.  The main beneficiaries of the recent years of the graduate route are characterized by MAC’s Annual Report 2023 as universities “..that charge the lowest fees” and is “..strongest at the less selective universities.”   The report also highlights the University of Hertfordshire and the University of Glasgow as having the largest increase in international student numbers between 2018/19 and 2021/22 but it is clear that their success was for different reasons in different markets.

There is more to be said on the patchwork nature of the university sector as well as on the emerging evidence of slow recovery for commercial pathway operators.  That will be the subject of a follow up blog when time allows. 

Image by Gerd Altmann from Pixabay

Up To Data

In the blog International Enrolments Unchained from February 2023 the UK universities with the most growth from India, Nigeria and Pakistan between 2020/21 and 2021/22 were shown. In the continuing absence of anything from HESA telling us what happened next and after the rather jaded retreading of old enrollment numbers by IHEC it seemed worth having a look at what happened to one of those players and also taking a look at one of the universities bemoaning its failure to keep up.


It’s good old-fashioned grunt work but lots of the data is there if you are prepared to put in the effort. It’s also revealing about the way some institutions have chosen to stash the cash and shown interesting movements in recruitment of domestic students. The picture is not comprehensive but it’s a sight better and more useful than sitting back and reporting on numbers from the middle of the pandemic.

This blog focuses on two institutions with quite different backgrounds and fortunes. The good news is that they give some real insights into what happened to their international student numbers in 2022/23. As these are formal Annual/Strategic Reports and Financial Statements it is difficult to see why that information cannot be entered into a common database and published within months of the financial year end or, on a preliminary basis, even earlier. Higher education may not like being accused of being outdated but the melting glaciers are beginning to outpace its rate of change – which is sad all round.

University of Hertfordshire

University of Hertfordshire (UoH) international student growth from 2020/21 to 2021/22 was pretty startling and they are not shy about highlighting their continued reaping of the Graduate Visa harvest. Overall, the UoH international community grew to 15,730 (45.4%) of a student body of 34,670. The numbers from India, Nigeria and Pakistan grew by 73.5%, 192.8% and 151.9% respectively although it is interesting to see the tailing off of numbers from Pakistan.

Source: University of Hertfordshire Strategic Reports and Financial Statements

The impact on UoH finances has been startling. Total full-time tuition fees have risen by 55.4% in the four years since 2019/20 with full time international tuition fees rising by 285.9% over the period. Despite the international fee bounty the University appears to have reduced its home student intake in 2021/22 and 2022/23 – this is implied because the domestic fee hasn’t changed but the amount collected is down. If one of the reasons for supporting greater international fee income is that it genuinely protects home student places this is probably worth a more detailed look.

Source: University of Hertfordshire Strategic Reports and Financial Statements

Rather than investing in home student recruitment it appears that UoH has been stashing most of the money away for largely unspecified purposes and spending it on largely unexplained “other operating expenses”. While staff costs rose by £20.5m between 2019/20 and 2022/23 the Other Operating Expenses (which do not have any accompanying note in the financial statement) rose £62.6m. There may be good reasons but it would be a comfort to have them spelt out.


Staff costs and numbers reported suggest investment in Academic and Research staff with their numbers growing over the period by 146 compared to all other staff growing by only 41. This is not always the case when universities find themselves flush with cash and it will be interesting to see how UoH deals with any decline in international student revenue.

Source: University of Hertfordshire Strategic Reports and Financial Statements

The Annual Report shows that the main impact of the financial windfall is that Cash reserves have gone from around £100m in 2019/20 to about £170m in 2022/23. The Operating Surplus has increased from about £2m to £20m and borrowings have declined. It looks as if UoH may have been preparing itself for a less certain future and may be reasonable well set to weather any headwinds.

Source: University of Hertfordshire Strategic Reports and Financial Statements

In that respect and just as a thought experiment it is worth considering that if UoH lost 50% of its international student income gained from 2021/22 to 2022/23 this would amount to around £22m. Even at this level the overall fee income is very considerably higher than 2019/20 and there is a substantial cash buffer to manage changes to a smaller scale operation. One suspects that their approach to management will see trimming of budgets and caution rather than them travelling hopefully on recruitment.


University of York


The University of York (UoY) has had a quite different experience. In January 2024 it was reported as “lowering admission requirements for some international students in light of “financial challenges.”” A reported £24m deficit was, they indicated, partly because, “International student numbers decreased in the year following high recruitment after the Covid pandemic and reflecting changed geopolitical circumstances.” It seems more likely that they had their lunch eaten by Russell Group competitors.


Their summary of student enrollments over the four years from 2019/20 to 2022/23 show a sharp spike with 59% growth in enrollments then a fall of 15.6% in 2022/23. They are not quite as forthcoming on the origin of their international students as UoH so we need to look at HESA’s slightly more dated data to get some insight into what might have happened.

Source: University of York Annual Report and Financial Statements

The HESA data (which gives slightly different numbers to those from the UoY reports but are close enough to be relevant) shows us that the growth from 2019/20 to 2021/22 was driven almost entirely by Chinese PGT students with a healthy boost from Chinese UG between 2019/20 and 2020/21. It is notable that UoY also managed a decent upward bump in students from India in 2021/22 which made up for a small decline in Chinese PGT enrollment that year.


The point is that their growth relied almost entirely on Chinese students. We know from HESA that between 2020/21 and 2021/22 the total number of enrolled FT Chinese students in the UK actually rose – from 140,445 to 148,760 – and that the FT PGT number grew from 72,555 to 77,135. It seems likely that UoY simply couldn’t compete against others in the Russell Group (the International Enrolments Unchained blog also looks at this issue) and it will be interesting to see if the 2022/23 numbers from HESA due to be published in April 2024 support this notion.

Source: HESA

The financial impact of the changes is clear. International FT student fee income rose by 67.5% over two years to 2021/22 (home student FT fees rose 10.6%) and dipped back slightly in 2022/23 (with home FT fees stable). The graphs show a relatively stable picture on staff costs (with USS movements excluded) until a spike in 2022/23.

Source: University of York Annual Report and Financial Statements

The staffing picture is notable for the relative suppression of Support Staff FTE during the pandemic but a significant leap in 2022/23. Over the four years the number of Support Staff has increased by 333 compared to Academic Staff up by 285 over the same period.

Source: University of York Annual Report and Financial Statements

Summary

A number of thoughts come to mind:

  1. While the change in visa regime will have an impact it seems likely that some UK institutions are significantly financially better off because of the extent to which they took advantage of the changes in post-study work. It is plausible that even a 50% reduction on the financial gains from 2021/22 to 2022/23 is far from catastrophic and particularly so if the institution is nimble enough to cut back to reflect changing circumstances.
  2. While universities like UoH who exploited these markets effectively can seem vulnerable to large declines in application volumes it is also likely that their on the ground operations will be more effective in taking larger share of declining markets.
  3. Universities that were unwilling or unable to capitalise on student markets that grew strongly because of changes to post-study work are likely to have been vulnerable to more powerful competition taking greater market share in China. Maybe some of the larger Russell Group universities have a secret persona as playground toughs who rough up less famous peers and take their lunch money.
  4. It will be interesting to see how the pathway operations involved have fared over these years. UoY’s relationship with Kaplan is likely to have supported them in the earlier years reviewed but may not have been able to overcome the lure of the bigger brand names.
  5. It would be sensible for an incoming Government to get more granular with the way different institutions are responding to changing market conditions. There is a certain logic to allowing the most dynamic and strongest to thrive, as long as academic standards and appropriate visa handling is in place, rather than introducing arbitrary caps on numbers.
  6. If international student fee income is, as has been argued, a protection for maintaining or growing domestic student places there needs to be some consideration of how direct the correlation is. From the UoH example above it appears that the university has been effective in securing significant increases in international income but has reduced enrollment of domestic students.

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Northern Star Sheds Light on International Recruitment

Universities and their mouthpieces might be drawing a collective sigh of relief and thinking that some of the heat has gone out of the discussion around the inequity of International Year One (IYO).  We certainly haven’t seen any of the private providers, the main beneficiaries of this route, stepping forward with authoritative data about this route.  But the Northern Consortium1 UK (NCUK) do give us traces of performance over the past decade or so.

Nothing in the NCUK numbers gives any relief to the core point that IYO is a route which, in many cases, allows international students to start the first year of a degree on without the necessary grades for direct entry.  The scale of the NCUK operation is used to demonstrate that IYO is not a niche activity and so deserves full attention from the Quality Assurance Agency and Department of Education reviews.

Of fundamental interest is the suggestion that NCUK has a long-term annual Progression Analysis that “considers the performance of all NCUK students at member universities and associates”.  This could be the gold standard of analysis reflecting everything from enrolment through attrition to degree outcomes.  At a single stroke NCUK might be able to answer many questions about the efficacy of pathway programmes albeit that its courses are not on campus.

In that respect there appears to have been an NCUK Report “Evidencing Success” from May 2018 launched at the NAFSA:Association of International Educators Conference in Philadelphia, which tracked ten years of NCUK student performance.  The snippet from it in the 2017/18 Annual Report indicates that 80% of NCUK students receive a first- or second-class degree but that IYO students “have a higher-than-average pass rate when progressing to the second year of their degree at university”.  It goes on to say that “over 90% of students meeting or getting higher than the required grades go on to pass their first year” and for “students who have been offered places with lower than the advertised entry requirements, the pass rate remains high at 88%.”

It seems reasonable to suggest that domestic students who miss their offer grade by one level and are rejected might do even better if allowed to start a degree, with extra academic support, on campus alongside direct entrants.  They just don’t get the chance.  Even more regrettable is that the Report is no longer available on its website – makes one wonder2.

The Trail Begins

The NCUK annual report and accounts for 2015/16 show that “International Diploma (Int Diploma-equivalent to 1st year degree level)” was offered as an “established pathway” programme.  It was “renamed as the International Year One” that year.  The report noted an upcoming triennial review in 2016/17 which might imply it had been first introduced in 2013/14 after the closure of post-study work options for international students in 2012.

As a small aside and for those that believe in history being cyclical it is worth noting that the Annual Report also notes NCUK had unconditional offers for 1,205 students.  It was an increase from 1,119 the previous year.  There was, however, a note of caution on eventual enrolment because of “…Nigeria where the economic circumstances are posing challenges for students and their families.  

Getting To Scale

The chart below reflects the data made available in NCUK Annual Reports and Reviews from 2016/17.  Not all of the information is provided for each year but we are able to see the following:

  • Students placed at UK university partners (all years)
  • Students “continuing onto the NCUK International Year One or moving to degree completion programmes at The Sino-British College in Shanghai” (2016/17 to 2018/19)
  • Students admitted to non-partner UK universities or to universities outside the UK (2016/17 to 2018/19)
  • The total number of students progressing to university or continuing on an NCUK qualification (all years)
  • The overall number of students on NCUK courses (2020/21 and 2021/22)

The final number is important in considering the IYO volume because NCUK also offer a percentage breakdown of the numbers on each of International Foundation Year, International Year One (IYO) and Masters Preparation.  For 2020/21 and 2021/22, where those overall enrolments are available, the percentage doing IYO was shown as 16% and 12% respectively.  The maths suggests that 507 and 452 were doing IYO courses in those two years.

Source: NCUK Annual Reports and Reviews

How Big Is International Year One for Private Providers?

A glimpse into the scale of IYO also comes from the only NCUK provider delivering it in the UK – INTO Manchester.  We can know for sure from a Quality Assurance Agency report in 2014 that in that year, of the 822 students, there were 99 on the NCUK “International Diploma” (later renamed International Year One) course.  That’s 12% which seems in keeping, if a little low, with the broader percentages shown by NCUK in later years. 

It is reasonable to add that in the May 2019 QAA Report 77% of students (82 out of 106) at INTO Manchester were reported as being “on a Level 4 International Year One (IYO) course” which might suggest a signficant upward movement in the course.  As pathway providers have come under increasing pressure to perform they have accelerated their provision of the most attractive offers to international students.  Universities who are equally keen to increase international numbers have become complicit in allowing those courses and the progression degrees available.

The other point is that INTO Manchester is not on a university campus so it is reasonable to suggest that the IYO here is more akin to the potential for domestic students who fail to get their grade offers to university to go and do an HNC at a local college.  All that really means is that the attraction of a course on a university campus, often sitting with direct entry first year students and taught by the same lecturers is likely to be immensely more attractive.  It seems reasonable to suggest that the likely IYO percentage in on-campus pathways is much higher.

As noted in a previous blog the growth of IYO and the propensity of universities to allow them has grown rapidly over the years.  More than half the partners of the six main pathway operators have IYO options leading to over 1,000 degree options.  Each partner usually has two to five IYO options.

 UK University PartnersUniversities offering IYOIYO linked degrees
Navitas127430
INTO74102
CEG8581
Kaplan157219
Study Group1411219
Oxford International5*451
Total61381,102

*Only partners where an International Foundation or International Year Zero is offered

A 2023 British Council report into “Pathways and recruitment channels to undergraduate study in the UK” reflected the paucity of information on the number of students coming through pathways into universities3.  However, my own research from public sources indicated that there were likely to be at least 20,000 students in pathways in 2018 and there have been additional partnerships announced since then.  Even staying with 20,000, a count of 12% of them being on international year one reaches 2,400 international students on campuses sitting the first year of an undergraduate degree in a way that is not available to domestic students.

As previously established these students have been accepted on significantly lower grades and often at lower language capability than even direct entrants from their own country.  A domestic student who missed a university offer by one grade could be rejected by that institution and IYO is even offered below contextual grades of domestic students from educationally challenged backgrounds.  It is very difficult to see how that is equitable.

How Do International Year One Student Perform?

The NCUK data is interesting but the gaps in it suggest a number of avenues for further consideration.  Of particular interest is the relative performance of IYO students compared to students progressing from Foundation Courses.  In this respect it’s worth noting that most pathway statistics about degree success tend only to reflect those that made it to the exam so dropout rates are hard to come by.    

A blog in The PIE in May 2018, by Georgina Jones, NCUK Market Development Director, indicates that 80% of NCUK students graduated with a first or second class degree but “around 50%” getting a 2:1 or higher.  On lower admissions criteria she notes, “…students who are admitted with below the published admission criteria, 88% go on to pass their first year, compared to 92% and 95% for those who met or exceed the criteria.”

In the 2018/19 Annual Report NCUK state that 59% of International Foundation Year students graduated with a 1st or 2:1 but that International Year One saw 74% of students achieving a 1st or 2:1.  89% of the International Foundation students secured a 2:2 or better compared to 96% of International Year One students.  There is a hiatus, presumably COVID-related before the story picks up again in the 2021/2 Annual Review, which indicates the 2:1 and above success rates were 69% (International Foundation Year) and 91% (International Year One).

It seems to tell a story that International Year One candidates may be more likely to drop out or fail in the first year but then go on to secure better success rates on completing the degree.  The comparative completion rate for domestic students is around 2.7% which might suggest that if those narrowly missing direct entry were allowed to start year one with additional academic support, more  would go on to finish and achieve academically than international students.

Summary

It is regrettable that Universities UK seems to have wilfully chosen not to explicity include International Year One in the review it has requested from the Quality Assurance Agency.  The existence of Foundation Years, which are often available to domestic students on a comparable basis, has not been questioned by most informed observers of the sector.  Notwithstanding that point, the NCUK figures bring into question the quality of study outcomes for international students who complete Foundations. The 59% with a 1st or 2:1 quoted by NCUK for 2018/19 is a very long way behind the aggregated 76.4% with a 2:1 or first shown by HESA for that year.

The fact remains that IYO is likely to be a successful proposition for commercial providers intent on boosting profitability and universities looking to protect falling international applications.  Equally true is that there is no comparable on-campus, year one of an undergraduate degree option for domestic students who miss their grades so the underlying allegation of privilege for international students is difficult to resist.  It seems that the only motivation for universities is likely to be having higher fee paying international students sitting in seats that could be filled by better qualified domestic students.

NOTES

  1. The Northern Consortium was incorporated as a company limited by guarantee (company registration number 02788226) on 9 February 1993. The Company was registered with the Charity Commission (registration number 1018979) on 23 March 1993. It had ten founder universities and describes itself as “a consortium of leading universities dedicated to giving international students guaranteed* entry to universities worldwide” The star alongside the word “guaranteed” is on the website and probably tells us all we need to know about the types of messaging that prevails.
  2. The summary of NCUK data reflects the incomplete picture across several annual reports. The Evidencing Success Report is still flagged on the website but the link leads to a 404 error page. It would be helpful if the data was available and particularly so if a comprehensive successor document could bring the material up to date.
  3. The British Council report is as polite as it can be about the fact that there are thousands of international students joining UK universities without any consistent way of determining their route to enrolment. This has been a feature of the growth of commercial providers in the international recruitment space. It is also another gap in data which makes the sector vulnerable to politically driven focus on student visas.

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From Clouseau To Cousteau

The Sunday Times articles looking at pathway programmes has been positioned by some as a political hit job on the higher education sector.  If so, it was as inept as the hapless Inspector Clouseau’s efforts to understand and bring to justice criminal elements.  A more Jacques Cousteau type of deep dive is needed to give some data on the relatively uncharted depths of International Year One.

Sector mouthpieces like Universities UK have insisted on talking about Foundation Programmes but this blog will focus on International Year One (IYO) (which is sometimes called First Year or Stage 2 by certain providers).  Most seem to be studied at NQF 4 which OnCampus at Aston University tell us “..is equivalent to the first year of an undergraduate degree in the UK” and on successful completion they give direct entry to year two of an undergraduate degree programme.  As Douglas Adams writes, “If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family Anatidae on our hands.”  

IYO is usually offered by a pathway provider, but gives the opportunity, on completion, to join year two of the student’s chosen degree programme in the university proper.  It is not available to domestic students and is offered exclusively to international students at lower grades than those required for direct entry.  A key question is whether it is an unfair, back door route for low quality international students to enter UK universities.   

This distinguishes it from a Foundation which is a pre-degree, preparatory programme that offers the opportunity on completion of progressing to year one of a degree programme.  Foundation programmes have a long history and most would agree that they serve a useful purpose for international students in developing language capability, culture assimilation and academic preparation before studying in the university.  There are also a number of comparable Foundation programmes providing pre-degree opportunities to domestic students .

Big Business and Growing

One argument that has been put forward is that the IYO element of the market is not big enough to worry about.  That disregards issues of fairness, equality and quality in admissions decisions and is also a dubious claim.  While data is fragmented and actual student number unavailable it is possible to see how IYO has become a big business.

Many consider Australian behemoth Navitas as the instigator of IYO.  Their current degree Study Options page leads to a selector which indicates that all 12 of their university partners offer IYO and that these qualifications link to 430 degree options.  As a comparison the Foundation degrees are available at all 12 partners and link to 799 degrees.

INTO offers IYO at four of its seven UK partners and the number of IYO options at them exceeds Foundation options by 36 to 21.  The wholly owned subsidiary INTO London claims to have progression agreements with 118 universities including specific arrangements relating to IYO with the University of Kent, Exeter University, University of Westminster and Surrey University.  The wholly owned subsidiary INTO Manchester claims that successful completion of IYO gives “a guaranteed offer for one of 14+ NCUK universities” – presumably in Year 2 of the degree.

Cambridge Education Group offers IYO through five of its eight OnCampus operations – those at the universities Aston, Birkbeck, Sunderland, Hull and London Southbank.  

Kaplan’s Degree Finder page indicates it offers progression through International Year One to 219 degrees at seven of its fifteen partner universities – University of Essex, UWE Bristol, Nottingham Trent University, Brighton Univesity, Bournemouth University, University of Birmingham, University of Westminster.  IYO courses are available at the first five locations and also at Kaplan International College, London.

Study Group has fourteen UK partners (not counting Huddersfield London) and offers International Year One at 11 of them.  It is here that it becomes easy to see why the Russell Group of Universities was so irritated at the assertions from the Sunday Times – none of Study Group’s Russell Group partners appear to offer International Year One. 

NCUK has 31 UK partner universities and indicates that its International Year One course is accepted at 16 of them.  Some of their partners, such as Exeter, Queen’s, Brunel and others, have arrangements with their pathway provider but do not accept the NCUK version.  It was not possible to track the number of degrees that could be progressed to from NCUK.

Table 1 – Summary of Main UK Pathway Providers and IYO Linked Degrees

 UK University PartnersUniversities offering IYOIYO linked degrees
Navitas127430
INTO74102
CEG8581
Kaplan157219
Study Group1411219
Total56341,051

Source: Pathway provider and University websites. 

It is unlikely that students progress every year to all the possible linked degrees but the availability of the option is highly desirable as it allows the student choice, life on campus, and often allows them to study alongside direct entry students for all or part of their time. Commentators who have claimed that alternatives to IYO do exist for domestic students in the form, for example, of HNCs are wide of the mark in considering these comparable options.

Silence of the Lambs

The Sunday Times clearly stated that International Year One (IYO) existed, defined the nature of the programme and had a direct quote from an INTO employee noting they were available at lower academic and language grades than direct entry.  Yet, none of the statements from organisations like Universities UK or the Russell Group of Universities  or even thought pieces from the usually impartial WonkHE even mentioned them.  The hurried “review” announced by Universities UK fails to specify that it will be looking at IYO and it seems like a collective vow of omerta has descended upon the sector.

This is despite the fact that IYO has become a significant part of pathway provider recruitment and revenue and offers a growing stream of international student fees to institutions.  The fact that student numbers are not publicly recorded makes it easy to fly under the radar in terms of volume and quality.  Ultimately though, the key claim is that it offers preferential treatment to high-fee paying international students of lower academic and language capability by allowing them a soft point of entry to degree study at a university of their choice.

There is absolutely no doubt that students starting the first year of a degree through an IYO are receiving their place with levels of academic and language achievement significantly below those of either domestic students or other international students who enter direct.  Over and above that they appear to get in with lower academic grades than are quoted as “contextual” offers for students from educationally challenged backgrounds.

Basically, IYO candidates have lower academic grades than their peers and start with lower language capability.  Even if that is not considered unfair the key question is whether an IYO can overcome those hurdles to the point where they can comfortably join and thrive on joining the second year of a degree.  It seems a big step and in the absence of good tracking data being produced by universities there must be some some scepticism.

In that context it is incorrect to believe that IYO courses are uniquely demanding in requiring a “pass” mark before a student can progress on to Year two of the degree.  As stated in this example for direct entrants from the University of York, “You must satisfy the requirements for each stage of your programme before being able to progress to the next stage. For a Bachelor degree, you need to get a credit-weighted average mark of 40 for each stage.”

The reality is that the International Year One options have grown because they are popular with international students whose performance on academic and language measures means they cannot get into their university of choice directly. This is a privilege that is not open to domestic students who might miss their university offer by just one grade.  It is difficult to see an argument that this is fair or appropriate or that the students go on to achieve well academically.

I have argued previously that the UK Higher Education sector is like a lamb lying down in the road and oblivious to the danger of being crushed by an oncoming juggernaut.  Here we have it choosing silence over mounting a data-driven assertion of the merits of International Year One.  That may be because there is no data and no defence.

Notes

Many hours have been spent scouring the web for details on International Year One. The summary here attempts to give some shape to a complex set of information in as straightforward a way as possible. The summary of articulation to degree courses is offered in good faith but any authoritative corrections will be taken seriously and noted. If anyone has data on progression from IYO and eventual degree outcomes compared to direct entry it would be good to see.

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