university pathways – Page 6 – View From A Bridge – management, education and personal thoughts

US INTERNATIONAL STUDENT ENROLLMENTS – PEER TO PEER AND PATHWAYS

Making sense of trends in US international enrollments presents real challenges due to the diversity among ~4,000 institutions. Looking at Oregon State University’s self-identified peer group of four other public universities is an opportunity to get under the surface. It also provides insights as to how private providers offering pathways and direct recruitment support to universities, are contributing to overall numbers and adjusting their programs in an increasingly crowded market.

It’s a small sample over a limited time but it may offer some pointers for universities considering how best to meet their recruitment needs*. Over a four-year period to fall 2018, one of the two public universities without private provider support was competitive in terms of overall international student enrollment. Where a new peer institution was added to the provider’s portfolio during the period it did better than longer-term partners.

Some universities have benefited significantly from partnering with a private provider to bring global recruitment expertise to both pathway and direct enrollment. But some have been less successful and new dynamics are emerging as the sector matures, competition increases and student numbers fall. Where a private provider services several universities with similar academic and ranking characteristics the potential for internal competition for students is likely to increase.

For the university this makes the task of selecting a provider more complex and the consideration of tighter commercial terms on target numbers and non-competing partnerships worth close attention. The lure of having a partner who offers to take all the up-front costs while returning more international students than the university currently has will always be attractive. But the prospect of signing a long-term contract to become a commodity product in an undifferentiated portfolio is less so.

A MIXED PICTURE IN TOTAL INTERNATINAL ENROLLMENTS AMONGST THE ‘ORANGE PEERS’

Oregon State University (Oregon State) defined four institutions as “Orange Peers” for the purposes of its Strategic Plan . Two, Colorado State University (Colorado State) and Washington State University (Washington State) are, like Oregon State, partnered with INTO University Partnerships. The others, University of Nebraska (Nebraska) and Oklahoma State University (Oklahoma State) do not have any private-provider pathway relationship.

A working assumptions of most private pathway provider relationships is that the university will benefit from students progressing from the pathway as well as direct applications as the institutions international profile is raised. Providers have also increasingly focused on recruiting students directly to the university i.e. not just through a pathway, with remuneration often coming as a percentage of tuition fees paid by the student. Looking at an institution’s total international enrollments is one way of considering how the partnership is delivering.

The four-year picture in Table 1 broadly reflects the overall slowing in the US since 2015. However, Washington State had year-over-year growth of 66 students and 46 in 2017 and 2018 respectively, which may reflect the early growth stage of the partnership with INTO which commenced in 2017. Both Oregon State and Colorado State, long term INTO partners from 2009 and 2012, respectively, saw overall enrollments decline in 2018.

Nebraska, which has no private-provider support had the strongest growth over the four years, increasing by 283 students or 11.2%, despite a dip between 2017 and 2018. Oklahoma State fared significantly worst with a fall of 236 students.

The IIE Open Doors report shows that between 2015 and 2017 (the latest comprehensive reporting available) US total international enrollments fell by 0.56%. All of the ‘Orange Peers’, except Oklahoma State, out-performed on that timescale. It will be interesting to see how 2017 to 2018 enrollments compare against the national trend.

TABLE 1 – ‘Orange Peers’ – Total International Enrollments Fall 2015 to Fall 2018

PATHWAY PROGRAMS REFLECT CHANGING CIRCUMSTANCES

Pathway enrollments help underpin direct recruitment to university programs. As global markets change in terms of major sending countries and the demands of students they need to operate flexibly to maintain relevance. As the number of pathways in the US has grown competition for students has intensified.

In June 2018 Inside Higher Education’s Elizabeth Redden took a deep dive into pathway performance as US international enrollments came under pressure. She noted, in particular, a steep decline in pathway numbers at Oregon State driven largely by falling numbers of Academic English students. Fall 2018 data shows that this has continued along with a decline in both Graduate and Undergraduate pathway numbers.

TABLE 2 – INTO Oregon State University Enrollments – Fall 2015 to Fall 2018

Source: Oregon State University Institutional Research

At Colorado State one response to the changing market conditions has been a notable increase in the number of pathway courses and the range of academic disciplines covered. In fall 2015 six pathway programs secured 152 students, an increase to 14 programs in 2017 drove a short-term increase to 163 enrollments, with numbers falling back to 142 in 2018 despite a further program being added.

Enrollments on the business pathway program have fallen sharply over the period with engineering enrollments also declining in 2018. New programs in computer information systems, computer science and finance have ameliorated the overall decline. These shifts demonstrate that traditional recruiting patterns are under considerable pressure and raises some questions over whether emerging courses will reach the same volume of enrollments.

Table 3 – INTO Colorado State University Enrollments – Fall 2015 to Fall 2018

Source: Institutional Research, Planning and Effectiveness Reporting

At the time of writing it was not possible to find any specific detail about enrollments in the Washington State pathway programmes.

FUTURE DIRECTIONS

US pathway growth continued after new international student enrollment growth peaked in 2016, with around 20 further partnerships by 2019. The ubiquity of pathways has seen an increasing duplication of academic offering and ranking status within each provider’s network. The recent closure of three of CEG’s pathways operations in the US suggests that some partnerships may begin to look sub-optimal over time and that restructuring is likely to happen in the future.

In this new world, well-placed universities looking for partnerships hold a great deal of power to dictate commercial terms or to choose to invest in alternative recruitment options. Locking out competitor institutions, contractually-binding performance criteria and understanding how to exit a failing partnership without penalty should all be considered as part of the commercial terms. There are still many opportunities for the smartest and most creative to do well.

*Data provided by universities is seldom wholly consistent and some provide greater granularity than others. Every effort has been made to make fair and consistent comparisons but any authoritative corrections or comments are welcome.

From Deal to Delivery With Pathways

After the champagne has been drunk and lawyers have left the building the respective teams of the pathway provider and the university face ‘operationalising’ the arrangement. 57% of College and University Admissions Directors believe ‘pathways programs will become more important to US higher education in the current environment’ (IHE/Gallup Survey, 2018) so it’s a good moment to consider how that can work. Here are a few thoughts and things to consider based on experience from both sides of the fence.

Most deals are driven by senior management who want to meet strategic needs including more students, revenue and diversity. Work groups, steering boards and workshop sessions are often held in the context of political will from the top down to get a deal done. But once they believe the international recruitment issue is resolved the top team moves on to other priorities.

The failure of many pathways to deliver the expected results can be traced back to this moment because there is no perfect preparation for the day to day engagement between two culturally different organisations. Caution, disorientation and lack of empathy quickly become frustration, blame and mistrust. As Mike Tyson memorably put it, “Everyone has a plan until they get punched in the mouth”.

Personal relationships between key decisionmakers can help and one example will serve. One pathway provider wanted to take over all communication with agents, a plan that was being resisted wholeheartedly within the university. It became a symbol of resistance in the international office but a sign of naivety and bloody mindedness by the provider.

Over a couple of Long Island Iced Teas in a Malaysian bar the universities head of international recruitment explained the insecurities, egos and justifications to the provider’s Global Sales Director. After a pause he simply said, “OK. You carry on communicating directly. As long as you promise that we can review in six months and if it isn’t working we try my way.”

It allowed the head of international a ‘victory’ but also the chance to give a clear warning to the internal team that they had to deliver. Having conceded without rancour the provider was able to leverage goodwill on other issues. A year or so later both the main protagonists agreed that it was never that important an issue in the first place.

But personal relationships are the result of hard work, respect, regular engagement and transparency. There will always be decisions to make, changes to consider and strong views to manage. Below are a few things that will almost certainly come up in the first year or so and some possible responses.

Entry requirements will need reconsidering. Most pathway providers will, at some point, say that recruitment or progression is being hindered by unrealistic academic standards. Every university with a few years of successful recruitment will want to raise grades and then gets surprised when applications drop off.

Be realistic and conduct ongoing research into what is happening in the market – not just in your country but around the world. Too many universities fail to fully understand international equivalencies or the difference between school systems in other countries.

Cost of acquisition is going up and universities should invest. Competition is tough and commission deals are a complex range of standard, special, emergency and wrapped in deals for marketing, trips and exhibition slots. The suspicion is always that higher costs are simply an excuse to cover poor recruitment planning.

Understand the providers commercial plan for engaging with agents and why they believe it works for your university. Then keep asking how it is going and what evidence exists – term sheets are relatively easy to get from friendly agents. Consider the lifetime value of the student to the university and work with the provider to consider that return holistically.

Academics should travel to support recruitment. Some academics have been global road warriors with great success and some senior management teams spend weeks on the road at key times. Some try never to leave the university campus because it interferes with their research or they don’t have budget.

In the battle for students an academic title can make a real difference and overtime the winners will have academics who travel regularly. Get used to it and build an internal team that is willing to trot the globe and work hard to recruit. Also, make sure there is a budget to support international travel – time in country is never wasted.

Admissions times are rarely fast enough. This usually become a running sore and it needs to be dealt with quickly. Standards should be agreed before the deal is signed but even then the provider will want to move the goalposts.

Admissions processes are part of the recruitment arms race and sometimes responses are needed very quickly to optimise enrollments. Work with the provider to make the internal investment case for improved systems, people and processes. Start from the point that admissions is a bridge not a gate – the objective should be to secure every student who has a reasonable chance of completing their academic programme.

Targets will be missed. In the heat of deal making the pressure to close is intense and people, on both sides, sometimes get greedy and fearful in equal degree. Too many partnerships then work under a fog of misunderstanding and misinformation about target, stretch target, baseline, quotas etc. Even worse can be a lack of realism and prompt feedback about changing market conditions.

Start by presuming that first-year recruitment may be well below target (and that it is not necessarily the providers fault). Make sure university budgets, assuming progressing students, have a reasonable buffer. Do the work to review second year and third year targets as early as possible in the light of experience. Understand what can and will change to make ensuing years better.

Universities expect the provider to do it all. It can seem reasonable to hand the controls to the ‘experts’ and sit back to watch the students roll in. And there is always a get-out clause or a contractual stick to beat them with if targets are missed.

That is not partnership and universities should want to be involved in anything that involves their reputation. It’s not just about money because students and staff have a stake in the outcomes. University staff know their institution better than any external provider ever will – the more generous and helpful they can be the better for everyone. And providers need to socialise new thinking carefully rather than launching a new plan that is seen as counter-cultural.

Senior people and champions will leave. A partnership deal is often partly the result of a meeting of minds and ambitions. But it is rare for the original movers and shakers to be as regularly involved after three years. Incomers will have different understandings and motivations and the glow of ‘mutual benefit’ can be tarnished by competing interests.

Providers need to be alert to changing University personnel and work hard at relationships– not just at senior level but by embedding themselves at several levels. Taking time to understand new thinking while establishing a common knowledge of history pays off. Universities need to make sure they are allowing good access and taking time to keep their internal audiences informed.

This list is not intended to be exhaustive and there is plenty more that could be said about building long-term, productive partnerships in student recruitment. Neither partner should expect to have it all their own way but the search for optimal outcomes should be ceaseless. Perhaps the best advice is to have ‘the qualities of an old political fighter’ as Boris Yeltsin once ascribed to a colleague – ”patience and flexibility, always searching for intelligent compromise.

UNIVERSITY PATHWAYS – INTO THE VALLEY

The potential sale of INTO University Partnerships has created a lot of interest with a particular focus on the Joint Venture (JV) model it pioneered and how they are performing. A sharp-eyed and smart ex-colleague pointed me to Companies House, the United Kingdom’s registrar of companies, which offers access to annual reports for every JV as well as the wholly owned entities INTO Manchester and INTO London World Education Centre. They make for interesting reading.

No doubt the wonks, analysts and number crunchers will comb these reports over the coming months as part of their due diligence and financial interrogation. As The Skids minor-hit of 1979, Into The Valley said – its ‘time for the audit, the gathering trial.’ But for this blog I am going to focus on enrolments because that is the area where most pathway providers claim they bring expertise, investment, global reach and commercial nous which add up to student recruitment that universities cannot match.

The individual filings appear to be consistent in reporting the average number of students in each Centre during the year. Table one shows these for ten entities operating in the 2013/14 Financial Year and still operating in 2016/17. This excludes the now closed St George’s University JV and the INTO Newcastle University London JV established in 2015.

Table 1: Yearly Average Enrolments at INTO Centres

*Manchester and London are not joint ventures. Their parent company is INTO University Partnerships
Source: Annual Reports 2013/14 to 2016/17

The average enrolments in 2013/14 across all Centres was 4284 while in 2016/17 it was 4016 – a decline of -6.3%. The peak year for enrolment was 2014/15 when an average of 4293 enrolments are shown. As a comparator HESA reports that the UK HE sector’s first year international enrolments declined from 179,250 in 2013/14 to 172,275 in 2016/17 – a fall of 3.9%.

There will be many drivers for enrolment performance and as my previous blogs have indicated there have been winners and losers amongst universities over the past few years. Many in-house international offices have secured outstanding results and some universities have received strong support from the performance of their pathway partners. The picture for INTO looks mixed with only the Queen’s and Stirling JVs showing an increase in average numbers enrolled.

What also interested me was that I once heard a pathway leader explaining to a worried Vice-Chancellor that the period from start up to profitability for a pathway was ‘deepening and widening’. Both Gloucestershire and Stirling JVs were in start-up mode in this period having been incorporated in 2013. But their fortunes seem to have taken different directions with the latter forging ahead as the former has fallen back. It would be no surprise if pathways at more lowly-ranked universities were finding it harder to make progress under increasingly competitive conditions.

We can also see that even some of the pathways at well-known top 30 universities, Newcastle and East Anglia, have had a pretty torrid time in terms of enrolments. Newcastle enrolments fell by 24.3% from their peak in 2014/15 and East Anglia by 17.5% in the same period. City, a relatively well-known university with strong international intakes and a London advantage, saw numbers fall by 25.5%. This suggests that even well-established partnerships with big name partners are not a guarantee of successful enrolment.

The university partners are, of course, still securing students who progress from these pathways but this scale of decline is unlikely to be made up for by improved progression rates or increased fee levels. My recent blogs have demonstrated that both Newcastle and UEA have seen their overall international student fee income declining over recent years. And while INTO University Partnerships’ share of the JV profits is not the only stream of income to its business it is reasonable to assume that the company would prefer operating profits to losses.

For INTO, and the pathway sector more generally, in both the UK and the US the challenges are not going away any time soon. These include the growth of favoured locations such as Canada, Australia and Europe, the emergence of new destinations and particularly those in Asia, and the ever-present spectre of improving on-line delivery and in-country tuition improving English-language levels.

Tennyson’s poem, The Charge of the Light Brigade, provides an apt metaphor. He wrote that as the cavalry charged ‘into the valley of Death’ there were ‘cannon to right of them, cannon to left of them, cannon in front of them’. There were survivors but of the original 600 Light Dragoons, Lancers and Hussars in the charge fewer than 200 were able to re-assemble with their horses.

Over a billion dollars has been invested in private pathway providers since 2010 as the prospects for growth in the US and UK seemed bright. If there is a next round of deals for those providers – Study Group have also been for sale recently – it seems likely that the price must reflect the market challenges. If not we may recall that, as French Marshal Pierre Bosquet reportedly said of the Charge, “C’est de la folie” — “It is madness.”