university pathways – Page 5 – View From A Bridge – management, education and personal thoughts

INTO AT WORK IN A LAND DOWN UNDER*

Rumours of INTO University Partnerships (INTO) striking a deal with the University of Western Australia (UWA) seem to be gathering pace**. It’s certainly clear that Study Group’s operation aligned with UWA, Taylor’s College, is closing in December 2021 and is currently not accepting any more students. Meanwhile UWA has announced the opening of UWA College, a new pathway institution, in February 2022 and it sounds as if this could be where INTO has landed its first ‘partnership’ in Australia.

The loss of UWA takes Study Group down to three university partners in Australia, according to its website, but it continues with its links to the top-ranked Australian National University and University of Sydney. Navitas currently lists 11 Australian partners with only one from the Go8. Just for the record that’s Adelaide which also appears on Kaplan’s list of three partners.

INTO’s entry into the Australian fray makes it the newcomer and comes some years after casting eyes at the opportunities . Discussions with La Trobe (currently a Navitas partner) were fairly advanced in the early 2010’s and there were other flirtations. The questions – why now and why Perth – would lead to an understanding of whether this is opportunism, an emerging strategy for diversification or a desperate throw of the dice.

The company’s problems with losing partners have been well rehearsed in recent months but there seemed some logic to taking joint ventures accruing debts to INTO out of the portfolio. While it is doubtful that all the decisions to close were driven by INTO, the remaining partners include some top names in the UK at a point when international recruitment is bouncing back. Almost every pathway group has had to take some pain with closures in the US so INTO’s troubles there were not uncommon.

It still seems something of a leap to take on a new partner in a country where the company has no infrastructure and limited operational experience. Even more so at a point when that country has a very uncertain path to being able to welcome international students back in the numbers it once enjoyed. It’s also reasonable to say that Perth has not historically been the epicentre for international student growth in Australia and that enrollment has lagged behind the country’s impressive upward curve to 2019.

Sources: UWA Annual Report (showing student load) and Australian Department of Education Skills and Employment

While UWA is one of the Group of 8 of top universities in Australia but is also behind some of the more illustrious names in terms of global ranking and attractiveness to international students. So, even when the borders reopen there is little to suggest that UWA will be at the front of mind for international students looking to find a top ranked university. All the while, there is also the drumbeat of Australian politicians and pundits who are keen to see the 2020 reduction in international student numbers go down even further to reduce university dependence on international fees.

	THE 2021 Global Rank	QS Global Rankings 2022	% of international students (THE measure)
University of Melbourne	31	37	48
University of Sydney	51	38	43
Australian National University	59	27	47
University of Queensland	62	47	38
Monash University	64	58	43
UNSW Sydney	67	43	44
University of Adelaide	118	108	29
University of Western Australia	139	93	29
Uni of Technology Sydney	160	133	36
University of Canberra	184	436	36

Business Insider Australia and other publications have set out the broader risks to Australia’s booming international student market as its Government struggles to find ways to allow inward mobility. UWA has taken the opportunity to roll out $40m in ‘structural cost cuts’, including ‘university-wide redundancies’ while flagging heavy investment in its campus. All of this plays out against the background of continuing tensions between the governments of Australia and China with the latest spat over the Great Barrier Reef and complaints at the World Trade Organisation being just the latest examples.

It is fair to say that the jury is out on how soon and how robustly Australia will return to the international student recruitment party. Those who have travelled the scene for many years know better than to write them off and they have overcome dips in enrollments before. But the resurgence of the UK, the Biden bounce and Canada’s continuing surge means that the competitive market they face will be more challenging than ever before.

All in all the link up, if it is confirmed, seems out of context for a business that has focused so heavily on the US for the past five years. The geopolitics of the enrollment potential are also difficult to divine at this stage and may make the partnership a harder sell. It’s going to be interesting to watch and see if INTO find it the “land of plenty” or whether those making the decision will think they’d “better run…better take cover.”*

NOTES

* It’s sometimes irresistible to allude to the mighty Men At Work and their song Down Under which topped charts around the world between 1981 and 1983. In September 1983 it was adopted as the theme song by the crew of Australia II in their successful challenge for the America’s Cup yacht trophy.

** As always, I would welcome any clarification or correction from an authoritative source at the University of Western Australia or INTO University Partnerships and amend the copy accordingly.

Image by Katrina_S from Pixabay

INTO THE GREAT WIDE OPEN*

It’s always difficult to know when news is official and when it’s a false start and a case in point is the appearance then disappearance of a new Chief Executive Officer for INTO University Partnerships (INTO) over the course of a few days last week. It would be invidious to name names publicly at this point but one day the INTO corporate website had a picture and biography then a day later it was gone. It all happened so quickly that I was pleased to have a conversation with a colleague who had seen the website and could also name the individual.

There doesn’t appear to have been a press announcement about the appointment, but on Wednesday 16 June, the site also had INTO’s co-founder John Sykes listed as Deputy Chief Executive and VP of UK Operations so there seemed to be a nascent structure in place. More curious is that all of INTO’s pages related to people – and they were extensive – went missing and remain so on Wednesday 23 June. If you click on the link to Our People it takes you to a bland page about Global Reach – Global Impact, the Leadership Team area on Corporate Information is a desert and the Meet Our North American Development Team section is as blank as untrodden snow.

Any official and authoritative explanation is welcome and I’m happy to provide an update if it is forthcoming. Perhaps the wider site needed a major refreshing but if so it would be reasonable to see the Marshall Student Center and Colorado State University imagery coming down because those joint ventures have closed. Anyone who has had responsibility for keeping websites up to date know that it is not for the faint-hearted and requires constant vigilance. Using collateral from partnerships that have ended feels a little like the corporate equivalent of carrying a torch for a childhood sweetheart.

The claim of 30 university partnerships in the UK and US also does not square with the logos of nine US partners and nine UK partners. The relationship with Chinese universities appears to have disappeared from the corporate site but the INTO student site still has opportunities for study at Nankai University. It’s all pretty confusing.

Only time will tell if the lack of information about leadership reflects a new approach to privacy, a major update or a pending restructure of significant proportions but it’s a good moment to review the task facing a new CEO if or when they are appointed. Partnership growth has stalled, online capability appears to be behind the curve and the main competition has forged ahead in both areas. It seems a long way from the growth proposition that encouraged Leeds Equity Partners to invest £66m ($105.8m) for a 25% stake in the business back in 2013.

Over the past two years INTO has seen the end of joint ventures at the University of Gloucestershire, Newcastle University London and Glasgow Caledonian University in the UK as well as Marshall University, Colorado State University and Washington State University in the USA. The company invested in School Apply in early 2020 and closed it a year or so later.

The INTO Annual Report for the year ended 31 July 2020 was for a year before the full impact of the pandemic was felt on 2020/21 enrolments and suggested little growth. Adjusted turnover (which removes discontinued operations) was up 3% to £202k while adjusted EBITDA fell 9.1% to £26m. Overall, the intercompany debt from joint ventures to INTO had increased by around £8m to £44m with the Centre’s closing listed as debtors to the tune of around £11m.

After entering the pathway market with a ground-breaking joint-venture model at the University of East Anglia in 2006, INTO leveraged its model with great initial success in the US at Oregon State University from 2008. There have been no new partners in the UK since the University of Stirling in 2014 and the most recent pathway additions in the US was Hofstra University announced in January 2019. Shorelight adopted many aspects of the INTO model and has forged ahead to be the dominant partner of American universities since its founding in 2013. Long-term players like Kaplan, CEG, Navitas and Study Group and upstarts like QA Higher Education and Oxford International have scooped up the most recent UK university pathway partnerships.

INTO’s purchase of SchoolApply may have been the start of a foray into the world of online delivery but it is no longer active and there is little evidence of significant advances in this area. This is at a point where Study Group is moving forward with Insendi, Kaplan Open Learning has online partnerships with Essex and Liverpool, CEG Digital has an established stable of partners and even Oxford International has been making waves with its Digital Institute. In the US, Shorelight has made a great deal of its delivery through the Shorelight Live platform and appears to be repositioning as a business delivering technological solutions to student problems.

One way of looking at things might be to suggest that the reduction in partnerships has been a deliberate step by INTO to clean up some joint ventures that had struggled to make headway in a competitive market. The growing level of indebtedness from these joint ventures to INTO might suggest that they were not making adequate progress but it does seem as if several decisions were university driven. The latest closures are part of history that includes the closures of partnerships with St George’s, University of London, and UEA London which undermines the original notion of long-term joint ventures providing greater stability than third-party pathway providers.

It’s something of a strategic head-scratcher and the loss of academic ‘supply’ comes at a tipping point where both the US and UK are demonstrably back in the game as far as international student demand is concerned. The lack of a viable online option seems to put INTO at a disadvantage in delivering to a market where increased flexibility and option has become the norm and is likely to grow in future years.

Perhaps there is a mega-deal on its way and one might guess that Leeds Equity Partner would be pleased to find a way to realise some return after eight years of a holding position. A possible merger with Shorelight to become a demonstrable lead player in the US seems a long shot but the operating models have some similarities and the online expertise may bring energy to INTO’s portfolio. Or maybe this is the moment where a stable group generating solid if unspectacular EBITDA could be taken back into 100% ownership by INTO’s founder, Andrew Colin.

It’s all speculation but for an outside observer INTO needs to establish some renewed momentum if it is to fulfil the promise of its early days of innovation, creativity and energy. There’s been substantial investment in talent at the top level and perhaps a new CEO is the final piece in the jigsaw. Only time will tell.

Image by Anemone123 from Pixabay

* Fans of the mighty Tom Petty will know that Into The Great Wide Open is co-written with Jeff Lynne and charts the progress of Eddie as he “went to Hollywood, got a tattoo”, “made a record and it went in the charts” to the time “their A&R man said, ‘I don’t hear a single”. It’s the old story of “rebel without a clue”, to overnight success, to uncertainty when “the future was wide open”.

Amendment on 1 May 2023: The earlier version of this blog suggested that Andrew Colin, founder of INTO, might take the business “private”. It has been amended to clarify that this was intended to suggest he might choose to take it 100% back into his sole ownership

Canadian Pathway Drive – Back to the Future?

Interesting times in Canada as Navitas and others try to muscle in on international student interest in the country’s lure of immigration and citizenship. The latest to cross my desk is in Newfoundland and Labrador where Memorial University of Newfoundland (MUN) looks to be in discussions with Navitas. A response to the proposition from the university’s alumni network is a little like being transported back to the union and faculty resistance to UK pathways in the early 2000s.

It’s also a good moment to look at the prospects for pathway growth in Canada over the coming years. This is about the likelihood of resistance by faculty being successful and the possibility that the private operators may get diverted. History has also shown that, for either side, short term gains and potential may not always convert into long term success.

A Canadian Problem or Opportunity?

The scant MUN’s Minutes of Vice President’s Council from October 2020 confirm that a Pathway Proposal feasibility with Navitas has been ‘endorsed’ by the Council. A response by the MUN Faculty Association Executive (MUNFA) at the end of March 2021 highlights seven ‘concerns’ as a sighting shot. To borrow from a son of Canada one side of the discussion might be “rockin’ in the free world” but the other are suggesting “there’s a warnin’ sign on the road ahead”¹.

Drivers behind MUN’s interest may be varied but the economic case for international recruitment is likely to be high on the list. From 2012/13 to 2019/20 it saw operating budget cuts of $39.5m along with further capital budgets being lost. Since 1999 the provincial government has had a tuition fee freeze for students from the province but out of province and international students can be charged more.

Reports suggest this is a scenario that is also being played out in Ontario, Alberta and Manitoba as provincial government’s reduce funding for higher education. The conditions are ripe for pathway operators to find partnerships from hard-pressed institutions. Magnifying this attraction is the benevolent visa, work rights and immigration policies that has driven international student interest in Canada over recent years.

The Past In A Different Country

The MUNFA arguments are all very familiar to anyone who followed the progress of INTO University Partnerships (IUP) in the UK as it took its new 50/50 partnership model into discussions with potential partners in the early days. Much of the debate is played out in the media but another good source is the website of the University and College Union (UCU). There may be something for all sides to consider in the arguments made and what eventually happened.

The campaign against IUP at the University of Essex is well documented and laid out in a triumphant Fighting Privatisation Toolkit summary. It charts the story (from the UCU point of view) from first skirmishes in December 2007 to a university announcement in October that the teaching would be kept in-house. But as American baseball legend Yogi Berra told us, “It ain’t over till it’s over” and in 2017 the University announced a partnership for a ‘pathway college for international students’ with Kaplan.

Defences were also mounted at other institutions and some university management, for example at De Montfort, even expressed trenchant views about the potential dangers of private providers becoming partners. It was, however, only two years later (in 2013) that De Montfort, under ex-Vice Chancellor Dominic Shellard, teamed up with Oxford International Education Group for an international pathway college on campus.

It may be that INTO’s 50/50 partnership model with its associated terms was the real problem and later deals were modified to make them more acceptable to universities. But it is also true that some institutions in the UK have successfully developed alternative approaches to providing pathways for international students. Institutions that have moved so rapidly to deliver universal online education in the past year might care to consider how they apply that agility to accepting international students who are short of requisite language skills.

Lessons from the US and UK for Canada

UK universities have, to a greater extent, fully embraced the pathway model with long established groups Kaplan, Study Group, Navitas and Cambridge Education Group having around 50 universities in their portfolio. Newer players such as QA Higher Education, GUS and Oxford International are growing and well ranked universities continue to gravitate towards private partners with Aberdeen, Cardiff, Aston, Southampton and Queen Mary all finding pathway partners in the past two years.

In the US, however, the story is quite different with many pathway closures in recent years from Navitas (5), Study Group (6), Cambridge Education Group (4) and INTO (3) more than counter-balancing Shorelight’s slowing growth in new partnerships. It’s always difficult to be certain from the outside what is driving a closure but it’s reasonable to assume that the decline in international students going to the US has made it less viable for the commercial partner to continue. At its worst that exit leaves a university with no infrastructure, no foothold in the market for international students and potentially a poor reputation overseas that will be difficult to overcome.

There are material differences in the number of institutions and the private/public make up of the university sectors in the two countries. It’s arguable that Canada is more like the UK in terms of numbers of institutions, it has a degree system that offers flexibility, and it is relatively inexpensive. But the progress for the pathway providers has been very slow and success may not come quickly enough to ensure rewards.

Riding the Roller Coaster

As the world emerges from the pandemic there is almost certainly going to be a renewed appetite for student mobility but it is a quite different higher education landscape to just two years ago. The US administration has changed, the UK has seen growth from India outpacing that from China, and Australia, while wounded, is looking for ways to recover. Past performance is no guarantee of future results should be a watchword for pathways looking to Canada as much as caveat emptor should be a guide for Canadian universities talking to private providers.

Colleagues have speculated on Canada as being in the ‘squeezed middle’ as the US and UK open their doors more widely to students. It may also be of interest that while the numbers of scholars in the US from China were lower in 2015/16 than 2019/20 the number from India was slightly higher. There is also every reason to believe that the attractiveness of the US has already increased amongst potential students and this could pay big dividends as the country’s vaccination program increases pace.

The historical evidence from the UK, and to a lesser extent from the dash for growth of pathways in the US, is that resistance from faculty and friends of MUN may succeed in the short term but is futile over the longer term. It could, however, be enough for them to delay the seemingly inevitable because the private providers will turn their attention to other opportunities if the attraction of Canada begins to fade. Universities that have already signed on the dotted line may find that, as happened in the US, pathways are as willing to walk away as they were to sign up in the first place.

Notes

1. Frank Sampedro/Neil Young, Rockin’ in the Free World lyrics © Wixen Music Publishing, Silver Fiddle.

2. Image by Gerd Altmann from Pixabay

Realities, Rumours and Days of Reckoning

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

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

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

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

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

Rumours

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

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

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

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

Days of Reckoning

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

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

*Note

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

Image by Gerd Altmann from Pixabay

US PATHWAY SECTOR FACES DOUBLE WHAMMY UNDER ENROLLMENT PRESSURE

It appears that the cull of pathway operations in the US has further to go. The Navitas website suggests that Global Student Success Programs at UMass Lowell, UMass Dartmouth and Florida Atlantic University have been discontinued. All of them throw up the message, “The Global Student Success Program is no longer accepting new applications..” * It’s the same story for Virginia Commonwealth University and the University of Idaho links.

Looking more deeply, the figures from UMass Lowell show a precipitous drop in Navitas enrollments from 187 in Fall 2016 to just 81 in Fall 2018. The numbers for 2019 aren’t available on the university site but a further dip seems likely. If these are permanent closures it brings Navitas down to three pathways in US from eight at its peak. Overall, the number of on-campus pathways in the US may have fallen to around 40 and its little wonder some are making a “pandemic sales pitch” that they are really masters of online technology.

With the pressure on US international enrollments growing year by year it’s difficult to see that there is a lot of good news to come. Rumours abound and are difficult to verify but in recent weeks I’ve been told of a pathway run by one of the big two operators at a top 200 east coast university that is looking at a 70% decline in enrollments year on year. It’s a very long way from the suggestion made in 2014 by Parthenon Group partner Karan Khemka, that “We anticipate that growth will be constrained only by the pace at which private providers can develop the market.”

We are seeing a wholesale realignment of the pathway sector but alongside that there may also be a double whammy as universities seek to renegotiate commercial terms in the light of changing market conditions. For example, the University of South Carolina Board of Trustee minutes from April 2019 make for interesting reading as they reflect on the changing nature of the university’s deal with Shorelight. The initial deal had been signed for seven years in 2015 and the proposal was to re-sign for another seven but with “better financial terms for the University”.

One big shift indicated was that USC would be allowed to keep 90% of the tuition paid by students in years following the pathway and pay Shorelight 10% of the tuition. Under the initial agreement the split was 83% to USC and 17% to Shorelight, so on an out of state, undergraduate student fee of $16,700 that’s a cut of just over $1,100 a year per student. It’s worth remembering that Shorelight noted early in their history that, “not only does the university not contribute anything upfront to get the program off the ground…but Shorelight reimburses the university for any expenses as it’s getting off the ground.”

The obvious question for traditional pathways is how they remain sustainable when the university is bearing none of the start up costs, and if the provider’s revenue share from students going into the university is being reduced. In a recent blog I looked at the growing inter-company debt between INTO University Partnerships and its US pathways where, the collective debt owed by five joint ventures open for at least five years, had from under $5m to nearly $15m. The closure of the pathway at INTO’s partner Marshall University came as enrollments fell and inter-company debt rose sharply.

While $1100 a student doesn’t sound very much the real point is that this becomes a loss of $110,000 a year if you have 100 students progressing and $330,000 over the lifetime of the cohort. Add to that the increasing cost of acquisition of each student as global competition increases and the basic economics of a pathway come under serious pressure.

It also raises the question as to how sustainable are the remaining pathway operations as the US faces another bleak year for international enrollment. A recent Open Doors survey reported 52% of US universities indicating a decline in enrollments for 2020. Navitas research with agents recently suggested that declining student mobility and growing unpopularity could see the US lose between 160,000 and 350,000 international students.

Alongside the well-known and longer-term internal issues facing students who might previously have seen the US as their preferred option there is little doubt that competition is playing an increasingly important role. The UK has made good headway and become a more popular destination this year which has led to an increase in undergraduate enrollment from China of 14% this year. Canada continues to provide an attractive option with clear routes to citizenship that have been particularly successful in attracting Indian students in recent years.

Supply and demand are powerful and remorseless market disciplinarians. The dash for growth in the US pathways came supported by over $1bn of private money flowing into the sector, but the economics of creating more and more supply at a point when demand was slowing have become evident. With global competition for students increasing, student mobility threatened and universities finding alternative means of reaching the market – particularly online – it’s probably a hard road ahead.

*As always I am happy to have authoritative corrections or clarifications and will record them.

Image by Gerd Altmann from Pixabay

The Dwindling Party* – More Pathway Closures in the US

Pathways providers are cock-a-hoop about the UK this year but there’s a slightly embarrassed silence about continuing closures in the US. A quick spin through the websites tells us that INTO looks to be shuttering one of its early partners and Study Group has trimmed another from its stable. And there are plenty of discussions about where the axe might fall next (with one contender noted below).

INTO’s portal for students claims 13 US partners but according to the corporate website there are “12..in the US”. It’s not entirely clear which university was intended to be mysterious number 13, but a click on the number leads to just 11 partner logos shown. The missing partner is Marshall University in Huntington, WV.

The Marshall deal was signed in November 2012 with the first students entering the pathway in August 2013. It was the heady days of expansion in the US and the opening came the same year that Leeds Equity took a 25% stake in the INTO University Partnerships business for £66m ($105.8m). With Shorelight Education launched shortly afterwards there was a lot of private money betting that US expansion would guarantee international student growth for a long time to come.

But Marshall’s non-resident alien population and the strength of the INTO pathway have declined sharply in recent years. Institutional data showing early fall statistics shows a fall of 37.6% enrolled at INTO Marshall and 38.7% in the university overall (which implies that direct recruitment was falling faster).

Table One: Marshall University International Student Enrollments

With respect to Study Group, I reported on closure of three US Centers back in September but since that time yet another has disappeared from the list of logos on the website: Oglethorpe University. A visit to the University’s website confirms that the last intake was September 2019, and that the International Study Center won’t exist after May 2020. The partnership was announced in 2017 with President Lawrence Schall, stating, “As part of our globalization strategy, choosing the right pathway partner was important.”

Reasons for the closure are not easy to discern, as the Oglethorpe Fact book suggests significant improvement of international numbers year-on-year for 2019 entry. The number of countries for represented for first-timers had also increased slightly. Maybe the future did not look bright enough.

Table 2: Oglethorpe University International Enrollments

	Fall 2018 Enrollment	Fall 2019 Enrollment
First time, full time international	16	41
Full time traditional undergraduate profile	97	122

While walking through the pathway websites I also came across Cambridge Education Group suggesting that a pathway with Illinois Institute of Technology, first announced in early 2018, is still ‘coming soon’. When I clicked on the link for Illinois Institute of Technology Direct Entry I found an error page. Careless at best if this is an important relationship but perhaps indicative of more deep-rooted reconsideration. As always, I am happy to clarify this if I receive an authoritative correction and explanation.

It seems likely that the US will suffer even more retrenchment in international student enrollments over the coming year. The resurgence of the UK will almost certainly affect the US more than other locations, with the recently reported 93% increase in student visas from India just the early part of the surge to take advantage of enhanced post study work visas. Of course, the implications of coronavirus have yet to play out fully and that may mean that all bets are off.

*The Dwindling Party is a book by Edward Gorey where pop-up illustrations and verses divulge how, one by one, six members of the MacFizzet family, disappear during a visit to Hickyacket Hall, leaving behind only young Neville, who expects “it was all for the best.” It’s an interesting metaphor.

Image by Mediamodifier from Pixabay

Another Canadian University Pathway Coming Soon?

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

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

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

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

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

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

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

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

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

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

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

Image by David Peterson from Pixabay

Changing Fortunes and Futures Across Major Recruiting Countries

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

USA

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

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

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

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

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

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

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

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

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

Australia

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

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

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

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

Canada

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

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

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

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

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

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

Photo by Element5 Digital from Pexels

Changing Perception of US Pathways

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

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

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

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

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

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

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

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

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

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

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

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

Image by Gerd Altmann from Pixabay

More Pathway Recruitment Indicators

Detailed, consistent and up to date insights into pathway recruitment performance are often difficult to find. Some US universities give good data at a granular level and I reported on some of these in a recent blog. The completion of the reporting cycle for INTO’s Joint Ventures and wholly owned centres in the UK gives a comprehensive picture of their enrolments in the 2017/18 financial year.

For the ten entities – eight joint ventures and two wholly owned centres – that have been trading five years, total enrollments bounced back from the low point in 2016/17 but remain short of 2013/14 levels. This suggests that it’s probably still pretty tough going for the UK pathway market.

Table 1 – Average Enrolments for INTO Centres 2013/14 to 2017/18

Source: Annual Reports

At a detailed level the drivers of growth were Newcastle and City which bounced back after several years of decline and Queen’s. Long-term partners East Anglia seem to have bottomed out after three years of decline. Neither Stirling or Gloucestershire, the most recent partners in this group, have got over the 200 student mark after five years.

Table 2 – INTO UK Centres Average Enrolments 2013/14 to 2017/18

INTO centres split educational oversight between ISI and the Quality Assurance Agency with the former giving specific details on numbers enrolled and the latter being less prescriptive. While the annual reports noted above are averages across the financial year (August to July) in question, the ISI education oversight into three centres gives deeper insight into the most recent autumn intakes.

The distinction between EFL and FE used in the ISI reports broadly distinguishes between students on English Language only or Academic courses. Newcastle appears to have a significant number doing both.

Table 3 – Student Population of three INTO centres – November 2018

*Source: ISI Educational Oversight Reports*

The other INTO Joint Venture is Newcastle University London which had an inaugural intake in 2015 and offers both pathway and degree courses. At the time of launch the university indicated that ‘…..in collaboration with INTO, our London campus is expected to grow to 1,200 students’. Three years in the average numbers for 2017/18 were 381.

Recent UK pathway activity from established providers has largely centred on adding well ranked partners with Study Group, Navitas and Kaplan gaining Aberdeen, Leicester and Essex respectively. Newer players have generally picked up less well-known names with Oxford International adding Greenwich and QA HE with Southampton Solent. With the UK Government launching its new strategy for international student recruitment it remains to be seen if the cake will grow for everyone or if the strong will dominate.

NOTE: Table 2 updated 16 June 2019 to include INTO Glasgow Caledonian University 2017/18 enrolment