Tag: US higher education

Open Doors or Closing Time for US Pathways?

Open Doors data for 2021/22 confirmed trends that have already become evident in the UK and are likely to shape the future of global student recruitment for several years.  It also points to some stark realities for pathway operators that may cast a shadow over any hopes for a post-pandemic recovery in the US.  Most starkly, the recovery was marked by the highest ever new postgraduate intake, largely driven by students from India, while new undergraduate enrollment was only just above 2011/12 levels.

Will China Bounce or Break or Will It Depend Where It’s Dropped?

One of the biggest questions facing pathway operators in the US is whether enrollment numbers from China have reached a low point and will rebound.  The overall number of degree students from China enrolled in 2021/22 was 232,674 which was 16.7% down on 2017.  Undergraduate enrollments were down 26.3%.

However, the impact is not the same across all states.  Consideration of the 25 states with more than 10,000 international students in 2017 shows four who increased the overall number of “Foreign Students in the State” – Arizona, Massachusetts, North Carolina and Maryland. The first two made significant percentage increases from India while the latter two also increased the percentage enrolled from China

By contrast the two states with the largest percentage loss in international students over the five years were Oregon (-42.4%) and Iowa (-34%).  Of the 25 states, they had the highest percentage of students from China and in the case of Oregon the second highest percentage was from Saudi Arabia rather than India in 2017.  The leading universities in each state – Oregon State University, Corvallis and Iowa State University – lost 26.7% and 30% of international students enrollment respectively.    

  *Information from Open Doors Fact Sheets 2017 and 2022.  Numbers relate to “foreign students in the state”. 

A thoughtfully argued piece in University World News has suggested that a variety of factors could see a significant rebound by Autumn 2025.  This is tempered by factors including the growing strength of other recruiting countries and the developing academic quality of Chinese universities.  Others have suggested that unpredictable geopolitics, the potential for online delivery and universities desire for diversity may be major factors suppressing demand from China. 

Either way it seems an unpredictable future and not something to bet the house on.  Certainly, US universities wanting to rebuild their numbers are going to have to think long and hard about products, price points, promotion and graduate employability.  It seems possible that as global alternatives increase, recruitment markets change and in-country competition stiffens the role of pathways will come under further scrutiny.    

Pathways Poser

Responses by the main pathway operators to changing market dynamics have differed.  A previous blog illustrated Shorelight’s pivot from pathways to direct recruitment options but there has been little sign of such significant movement from its main US competitor, INTO University Partnerships (IUP).  The situation in Oregon, home to key IUP partner Oregon State University (OSU), suggests that the need for action may be growing.   

OSU provides long term, consistent enrollment reporting though its Office of Institutional Research which gives some weight to this thinking.  Despite the 2021/22 growth reported in the Open Doors data, OSU did not show international postgraduate growth in Fall 2021.  Fall 2022 numbers show another overall decline in international enrollments driven by falling undergraduate numbers and only limited growth in postgraduates.   

*These figures include all INTO Oregon State University (INTO OSU) pathway enrollments except Academic English

The impact of declining numbers from China is evident.  Despite recruitment support for direct admits from pathway partners IUP there seems to be limited ability to accelerate enrollment of students from other markets to compensate.  While the number of students coming from India to enrol is showing reasonable growth it is starting from a low base. 

Overall enrollment has been impacted by a continuing decline in the INTO OSU pathway operation.  Undergraduate pathway enrollments in Fall 2022 were down 80% over five years (and 65% on 2019), while graduate pathway enrollments were down 57% over five years (and 62% since 2019).  Total enrollments for INTO OSU have fallen 72% since 2017.

A previous review of Fall 2022 preliminary numbers from INTO George Mason University showed that IUP’s pathway operation at that university was struggling to bounce back after the pandemic but there was no information available concerning countries of origin.  INTO OSU data offers country insights and shows that three of the four main countries of origin have seen declines, with China falling from 581 students to 48 over 5 years (92%).  Numbers from India have shown small fluctuations but in Fall 2022 the intake of 16 was the same as in 2017.

Money Matters

Alongside declining volumes the INTO OSU debt to IUP increases.  This is, presumably, all well and good if the joint venture can generate enough pathway enrollments or find alternative revenue streams to pay the debt back over time.  However, three of IUP’s US joint ventures have closed in recent years – at Colorado State University, Marshall University and Washington State University – with a fourth, at St Louis University now wholly owned. 

The joint venture at the University of South Florida is not currently recruiting and is under threat.   Recent court filings have shown that USF Financing Corporation (USFFC) sought a “declaratory judgment that the 2010 stockholders Agreement between USF FC, the Company, and the INTO Defendants is terminated as of April 21, 2022.” The grounds were that the joint venture is “insolvent under both a balance sheet basis and inability to pay debts as they become due, and (b) has demonstrated a material adverse financial position where it could not perform all or a substantial part of its obligations..”.

*Taken from IUP annual reports up to and including that for the year ended 31 July 2021.  Excludes INTO SLU which is wholly owned, INTO USF which is not currently recruiting and INTO Hofstra which the INTO University Partnerships annual report does not record as a joint venture.

**The 2021 Financial Statements of Illinois State University (p.50) note that “INTO ISU has an agreement with its two partners, Global and INTO NA, which allows INTO ISU to borrow up to $6,000,000 in operating capital from INTO NA with an interest rate of 6%…. INTO ISU has outstanding borrowings with INTO NA in the amounts of $6,000,000 and accrued interest of $488,392 for the year ended June 30, 2021.”  INTO NA is a wholly owned subsidiary of INTO University Partnership Limited (IUP).

Reflections and Realities

Global pathway operators have many creative, flexible and commercially minded individuals but it’s worth remembering Margaret Thatcher’s dictum that “there is no way in which one can buck the market.”  Open Doors provides a picture of 2021/22 but as more universities report on their Fall 2022 enrollments it becomes even clearer that the dynamics have changed.  With all four major recruiting countries having relatively benign government policies it is no time to be clinging to outdated models with 2023 recruitment already starting.

Notes

As always the text reflects my understanding of the data. I am happy to receive any alternative thoughts or corrections from authoritative sources.

Image by Kingrise from Pixabay 

Look Into UAC, UEA, UK, USA, USF etc

Back in May the roundabout of changes at INTO University Partnerships (INTO) was in full motion.  My blog suggested a go to market strategy based around University Access Centers and an emerging sales structure reflecting the differing fortunes of Russell Group partners and other universities in the UK.  Particularly intriguing was the decline of the University of East Anglia joint venture (INTO UEA) and the rise of Queen’s University Belfast.

Regular readers will has seen that INTO UEA then failed to file its 2020/21 Annual Report by the due date but it is now possible to confirm the extent of the continuing decline in enrollments.  The UAC strategy was duly launched, a new partner in the US gives some further sense of a possible direction and some familiar faces have returned while the top team continues to change.  A summary is timely.

Changing UK Enrollment Dynamics

For some time now it has become clear that changes in international student enrollment for the UK is making for unusual turbulence and may not be good news for pathway operators.  This year’s UCAS data shows that overall international acceptances at undergraduate level are down to their lowest level since 2015 (excluding the pandemic affected 2020) due to continuing declines in EU students.  As importantly for pathway operators the shift to Indian postgraduates as a dominant, growing market brings very different challenges after years of reliance on China.

With the inclusion of the confirmed INTO UEA numbers the overall picture for INTO’s UK operations becomes clear.  While the Russell Group aligned operations had a steeper year on year fall in the most recent, pandemic affected, year the longer-term trend was positive.  Non-Russell group operations appear to be struggling and in decline.

Note: Wholly owned subsidiary INTO Manchester is primarily aligned with the University of Manchester and is included in the Russell Group enrollments.  INTO World Education Centre is a “choice” option and included in the Non-Russell Group enrollments.

The new figures also show that INTO UEA, the first joint venture opened, saw its enrollments fall below those of INTO Queen’s for the first time.  The recently posted Annual Report confirms that this decline came with an operating loss of £4.66m.  Note 18 of the Report indicates that fees charged by INTO and UEA to the joint venture have also been “renegotiated” to “reduce the LLP’s cost base.”

The joint-venture’s problems have had an impact on UEA’s overall international student enrollment and a significant decline in international fee income.  For now, the partnership continues but it will be worth keeping a close eye on it over the coming year.  The direction of travel and hopes for recovery seem clear from the Annual Report with talk of “the expansion of year one pathways and Integrated Degrees” as the focus for the future. 

Meanwhile, Back in the USA

INTO’s declining joint venture portfolio in the US has been explored at length and the current court case with the University of South Florida will play out over time.  Court documents show that an “Emergency Motion for a Temporary Injunction to maintain the status quo” on 31 August was declined which is presumably what led to the joint venture being removed as a recruitment option.  Filings indicate the next steps are that “INTO USF LP and INTO USF, Inc. shall file their Amended Complaint on or before September 20, 2022, and USF Financing Corporation and The Board of Trustees of the University of South Florida shall respond to the Amended Complaint within twenty (20) days thereafter.”

Meanwhile, the seemingly inevitable drive for direct recruitment partners may be coming with the announcement of an agreement to recruit postgraduate students for University of Massachusetts, Amherst from Fall 2023.  What is difficult to understand about INTO’s recruitment approach is that their student facing INTO Study website currently only features two direct recruitment partners (Colorado State University and Arizona State University) while the corporate site features nine US “recruitment partnerships”.  Shorelight’s site seems far more in keeping with the smooth approach that has been increasingly popularized by the aggregators and demonstrates how far INTO has to go if the intention is to have a significant direct recruitment network of partners in the US.

If the Face Fits

INTO’s web site constraints may also mean that updating new appointments and departures is not a priority but some of the comings and goings are interesting. 

Particularly relevant to the next stage of US development may be the return of ex-North America MD/CEO David Stremba as Senior Vice President, Business Development.  He was pivotal to the early growth of INTO in the US and has spent some time with both Shorelight and Navitas in recent years, so should have a good sense of the competitor landscape.  The US structure is also developing with long-term player Yasmin Sefer becoming Senior VP, Partnerships (Private) alongside the Senior VP, Partnerships (Public), Steven Richman.

The INTO corporate website also doesn’t reflect the recent departure of a Group COO and US Executive VP or a strongly rumoured, significant change at senior finance level.  All that aside, INTO seems to have decided the team and structure that it thinks can move it forward and there appear to be an ample number of “senior” titles for a business with a reported adjusted turnover of £119.3m in 2021.   Time for action.

Image by Peggy und Marco Lachmann-Anke from Pixabay 

INTO Court as Joint Venture Sours

There are signs that INTO University Partnerships’ (INTO) relationship with the University of South Florida may be ending after a recent Court Evidentiary Hearing1 on 19 August 2022.  While no public record of a judgement has appeared, rumors suggest there are communications in circulation advising that enrollment to INTO University of South Florida (INTO USF) will cease.  If any authoritative source can provide an alternative explanation or clarification, I will be happy to correct any misunderstandings.

It is appropriate to note that both INTO and the University of South Florida still feature INTO University of South Florida on their websites at the time of writing (27 August). The INTO Study site for students also offers the opportunity to apply for courses at the university. This may be the result of a time lag or the possibility of further discussion and this blog is written in good faith to explore the background to the Court case and the joint venture’s history.

The underlying case for a university going to court to end a joint-venture pathway that was once among the most successful in the world deserves attention.  Publicly available court filings outline the case2 and material on the INTO Corporate and University of South Florida websites is used to summarize the history and other background about the joint venture relationship.  The source of further commentary is referenced through hyperlinks.  

Summary of the Case

A Court filing3 from USF Financing Corporation (USFFC) to the Thirteenth Judicial Court in and for the state of Florida Civil Division dated 15 July 2022 seeks a “declaratory judgment that the 2010 stockholders Agreement between USF FC, the Company4, and the INTO Defendants is terminated as of April 21, 2022.” The grounds are that the joint venture is “insolvent under both a balance sheet basis and inability to pay debts as they become due, and (b) has demonstrated a material adverse financial position where it could not perform all or a substantial part of its obligations..”.  The particular difficulties of pathway programs in the United States have been widely explored and the filing incorporates direct reference to my blog of February 2022 regarding the growing level of indebtedness of INTO’s US ventures.

With an eye on its responsibilities for “stewardship of public resources” the University of South Florida terminated the program in April 2022 and “initiated the process for the teach-out of the programs’ enrolled international students….”  The filing asserts that “The INTO defendants refuse to acknowledge the Stockholders Agreement termination and refuse to participate in the teach-out or develop the Plan to dissolve and wind-up the Company.”  There are a number of points made around the fiduciary duty of the three INTO appointed Directors of INTO USF Inc, to creditors and shareholders “once a company is insolvent” with a memo, the accompanying Exhibit G of the filing, asserting that “the INTO appointed directors have a conflict of interest.”

INTO University of South Florida

INTO partnered with the University of South Florida in 2010 and the case study on the INTO website asserts “extraordinary” enrollment and economic impacts.  The accompanying graph (reproduced below) suggests that even if this was true up until 2016/17 the ensuing years have seen a significant decline in enrollment to the pathway.  Enrollments look to have peaked at around 800 but have subsequently fallen by around 100 a year to stand at c300 (this would be supported by the USF Fact Books showing non-degree seeking international students declining by a similar amount).

Source: INTO Global.com

The Court filing includes INTO USF, Inc’s Financial Statement to June 30, 2021 (Exhibit E) showing a net loss of $3.276m that year and $206,000 the year before.  This is supported by the USFFC’s Financial Statements to 30 June 2021 which comment on “approximately $3.3 million of net loss incurred by INTO USF during the year ended June 30, 2021.”  USFFC’s share of INTO USF’s “net accumulated (deficit)” was shown as $1.794m.

As noted in the February 2022 blog “China Crisis for US Pathways”, since 2018 when INTO Illinois State University opened, “total level of indebtedness across all US operations has nearly doubled from £18m to £35m”.  This figure included the debts at institutions where joint ventures have now closed – Washington State University, Marshall University and Colorado State University.  The blog also reflects that INTO has become the 100% owner of what was previously a joint venture at St Louis University.

One feature of both INTO USF (the second INTO partnership in the US) and INTO Oregon State University (the first) is that they are listed in INTO’s Annual Report as Inc. and are C-corporations.  Informed opinion suggests that closely held corporations (which these appear to be) “have been held to higher fiduciary duty standards” and this may be reflected in the “conflict of interest” comment.  Later US joint ventures are listed as LLC’s where, “By agreement, parties can alter certain duties to expand, restrict, or eliminate fiduciary duties owing to either the LLC or the other members and managers”, which suggests there may have been advice leading INTO to pursue alternative structures.5

Summary

It is worth waiting to see any Court judgement and whether there is an appeal process but the filing and other financial statements seem definitive in outlining the decline of the joint-venture’s financial situation.  If the joint venture is closed it would leave INTO with six joint ventures in the US, as well as the fully owned St Louis University operation and the “comprehensive partnership” with Hofstra (which is not listed in INTO’s annual reports as having joint ownership). 

As well as the closures in the US there have been several INTO joint ventures shut down in the UK in recent years.  In addition, INTO has taken a controlling interest in the joint venture with Newcastle University and the financial arrangements at the joint venture with City University have changed.  As noted in a recent blog the yearly financial reporting for INTO University of East Anglia is shown at Companies House as overdue, for a joint venture under significant financial pressure.

On top of all that there are rumors of imminent changes at the top in the INTO Finance team and the return of a familiar face to the INTO North America team but that is for another day.

Notes

  1. Case number: 22-CA-006726 before Judge D.D. Farfante
  2. I am unaware of any written response by INTO University Partnerships to the case filed
  3. Filing#153460265 Efiled 07/15/2022 07:45:26 PM
  4. “the Company” is defined as INTO USF Inc which is the C-Corporation established in 2010 with stockholders USFFC and INTO USA LLC.  Its board has three nominees from INTO and three from USFFC.
  5. The purpose of this paragraph is to provide further information which may be relevant and the quoted elements comes from the source indicated.  There is no intention to give legal advice or guidance and readers are advised to seek appropriate counsel on company structures.

Image by Venita Oberholster from Pixabay 

US International Enrollments See the Light But Pathway Struggle Continues

It’s always a delight when there is a shaft of light that gives an insight into important issues like international student enrollment.  George Mason University (GMU) has made available a day by day view of preliminary enrollments1 which offers a near real time picture of what is happening at the university and its pathway partnership with INTO University Partnerships (IUP),  INTO Mason.  It probably gives a reasonable indicator of how US institutions and their pathways are faring as the pandemic unwinds and follows data points in the early part of 2022 including:

  • IEE Spring 2022 Snapshot where 65% of 559 institutions responding reported “an increase in their international student applications for the 2022/23 academic year”
  • a Wall Street Journal report showing the number of F-1 visas issued to Chinese students  dropped in the first six months of 2022 to 31,055 compared to 64,261 issued in the first six months of 2019
  • The Siasat Daily and others report that between January and May 2022 US consulates issued nearly 15,000 “F1 or student visas” to students in India – triple the number issued in 2022

Visa delays are still an issue but things are moving.  The question is how much and what are the implications.  GMU’s contemporaneous data gives some directions of travel.  There is still some time to go before official census data and the data does not provide country by country insights but the transparency is welcome.

Source data for the graphs below is on the GMU Office of Institutional Effectiveness and Planning website.  The graphs combines information on preliminary enrollment data for 2022 with year-by-year data from the normal census point in October of previous years.    

INTO Mason Pathway Struggles to Recover

Recruitment to INTO Mason has been struggling for several years and had dropped, before the pandemic, by 35% from 371 in 2017 to 241 in 2019.  Numbers enrolled halved during the two years impacted by the pandemic.  In a year where recovery might be anticipated the enrollments of 117 for Fall 2022 remain below those Fall 2020, less than half of 2019 and even further down on 2018.2

While the GMU data does not allow an analyse of enrollments by country it seems plausible to believe that declines in students from China contributed significantly to performance pre-pandemic and there is little sign of recovery.  It also seems likely that any growth in students coming to the US is largely made up of graduates who do not require pathway courses.  This would be consistent with previous suggestions that the changing market dynamics are likely to undermine the core pathway business model.

Note: Filter used was Fall enrollments, INTO Mason, US campuses, all students (Preliminary data for 2022 taken at 22 August, 2022 – shown as First day of classes)

Accelerated Growth in Direct Graduate Enrollment at GMU

Direct enrollment to GMU has taken a significantly different course.  From 2021 to the preliminary numbers in 2022, graduate enrollment has surged by 46% from 1641 to 2397.  While UG enrollment is still below 2019 the graduate growth has boosted overall enrollment of non-resident aliens to a six-year high of 3844.

This suggests that the opportunity to recruit has come in countries, such as India, where the majority of students are seeking a graduate course.  GMU presents the overall enrollment data in a way which includes INTO Mason numbers but it is clear from the graph above that the pathway cannot be responsible for the growth in recruitment.  There is no indication of the extent, if any, to which IUP’s direct recruitment efforts for GMU have supported this growth.   

Note: Filter used was Fall enrollments, ALL GMU US Campuses, non-resident alien. (Preliminary data for 2022 taken at 22 August, 2022 – shown as First day of classes)

Pandemic Escalates Debt Levels at Joint Venture

Each year, in its published annual report, IUP records the level of debt it is owed by its joint ventures.  In a single year near peak enrollment the INTO Mason joint venture did not owe anything but since then the level of debt has escalated and the first two years of the pandemic saw a significant growth in indebtedness.  A previous blog has shown the growing level of indebtedness of all of IUP’s US joint ventures (including the three that have closed in recent years).

Source: INTO University Partnership Annual Reports

A recent report from an IUP university partner in the UK suggested that the decline in its joint venture with IUP was so significant that there “will be no distribution in respect of 2020/21 nor for the next three years whilst the joint venture recovers”.  At INTO Mason the level of indebtedness appears to have grown by £1.5m a year in each of the pandemic years and there is little to suggest that INTO Mason’s enrollments this year will grow above those in 2020.  IUP has they have the opportunity to offset any problems in pathway performance with direct recruitment revenue streams but the scale of the challenge seems clear.    

No Miraculous Recovery

As noted in a previous blog, the changing international student recruitment picture is likely to fundamentally change the way that pathway operators develop sustainable revenue streams.  In the US, Shorelight has acted quickly to develop a direct recruitment partners and has significantly outstripped IUP in this regard.  With recovery in the traditional core market of Chinese undergraduates looking sluggish and increasingly unlikely to ever reach the heights of the growth years the strategic challenge is very real for all concerned.

There has been a longer-term malaise around IUP with recent changes at Board level and a developing “boots on the ground” strategy suggesting a shake-up is underway.  It comes off the back of a diminishing presence in both the US and UK which may be difficult to recover.  The route forward remains fraught with pitfalls and uncertainty.

The direction of travel at GMU reflects the more general emerging picture for the US. Graduate enrollments look strong but as the recent IDP annual report showed interest from China looks relatively weak. As suggested in my recent blogs, the new enrollment battleground is India and with Australia back in the game and hungry it’s going to be an interesting year.

Notes

  1. The Preliminary Daily Enrollment Reports and Dashboards carry data from 19 April 2022 to 25 August 2022 (as at 25 August).  Other Enrollments Reports carry an historical record taken at a Census date in October each year.
  2. INTO Mason accepts students at a number of intake points in the year but Fall enrollment is generally the largest intake and is the sole point of reference for this blog.

Image by Joe from Pixabay 

INTO THE OUT-DOOR?

Like most fledgling businesses, INTO University Partnerships (INTO) had some difficult moments in its early years. In March 2008,  Austin Mitchell MP raised the matter in a Parliamentary question why it had not filed financial records with Companies House and founder Andrew Colin said that the delay in submitting accounts was a “simple mistake.”  It’s not the sort of mistake you expect a £119m revenue company to be making 14 years later, so the apparent failure to file accounts on time for the joint venture with the University of East Anglia (INTO UEA llp) seems a reasonable moment for considering other possible reasons.

Companies House confirmed on 4 August that, “Upon checking the company record I can confirm that the LLP’s accounts for the period ending 31/07/2021 have not yet been received for filing at Companies House.”  This blog speculates without knowing the detail behind the late filing and it may turn out to be simply a matter of administrative failure.  Time will tell and I would be happy to provide an update if anyone with appropriate authority from the company or university contacts me with a plausible explanation.

At one end of the spectrum the failure may simply be down to bad planning and Companies House list fines starting at £150 for being a month late to £1500 for being six months over the filing deadline.  They do go on to say that “Not filing your confirmation statements, annual returns or accounts is a criminal offence – and directors or LLP designated members could be personally fined in the criminal courts.”  One would guess that it’s unlikely to get that far.

The delay does, however, raise the possibility that INTO and the University of East Anglia are in discussions about the future of the joint venture and are delaying the filing until a direction is clear.  It would require someone with appropriate accounting/auditing qualifications (which I don’t have) to fully explain the complexities of what needs to be declared in terms of timing (from balance sheet date to authorization for issue) and whether events are adjusting or non-adjusting.  Change would not, however, be unprecedented because recent history has seen INTO become 51% owners and take “significant control” of INTO Newcastle University LLP and new profit/loss sharing arrangements at INTO City LLP were noted in the 2020 accounts.

Slip Sliding Away

A previous blog noted the trajectory of INTO UEA’s student enrollments and the slide in the university’s international tuition fee revenue.  The parlous state of affairs at the joint venture was confirmed with the statement that there “will be no distribution in respect of 2020/21 nor for the next three years whilst the joint venture recovers and builds up surpluses for distribution.”  All that alongside a £7m loan guaranteed equally by both partners might be drivers of a discussion about the future.

The University’s Council meeting in October 2021 was advised by the Vice Chancellor that at that point it was falling short of recruitment targets by c1,000 students.  This might suggest that international enrollments were also not picking up and the feed through from the joint venture was not as hoped.  It all seems good fodder for the Council member who requested at the Council meeting the following month an executive summary of “what was keeping the VC awake at night.”

One other thing that might be on that list for both the University and the joint venture is that both look to be poorly positioned to seize the opportunities offered by India as the major growth market for the UK.  According to HESA data, UEA’s intake from India rose from 40 to 175 between 2016/17 and 2020/21 in a period when total Indian students in the UK rose from 16,900 to 84,555.  It is a period when UEA’s enrollment of students from China fell from 1,320 to 810.        

Winds of Change

The trail of INTO’s long term, joint venture model has been patchy and it has, arguably, not proved to be as responsive to university needs as the more traditional stand-alone pathway model.  In the UK five operational joint ventures have closed – INTO Glasgow Caledonian University (2020), INTO St Georges University (2017), INTO University of Gloucestershire (2019), INTO UEA London (2014), and INTO Newcastle London (2020).  In the US there have been closures at INTO Marshall (2019), INTO Colorado State University (2021) and INTO Washington State University (2021) as well as INTO St Louis becoming fully owned by INTO in 2021.

A recent blog noted the shift in Shorelight’s range of university relationships from joint-venture pathways oriented to direct recruitment.  INTO has not been as dynamic in making that move but the shifting sands and complexities are captured in the grid below.  This presumes that the University of East Anglia remains a joint venture pathway operation with the university.

 Joint Venture Pathway with UniversityPathways (wholly or majority owned)Direct Recruitment OnlyDirect Admit Affiliates*
US8128
UK5310
Australia1000

*Described as “American universities that offer more choices to international students who seek direct admission.”

The turbulence in international student recruitment is being felt throughout the sector and pathway operations are particularly sensitive to changes impacting the relatively small number of student that require extensive language support alongside academic study skills.  There are many examples of changing course portfolios, including International Year One, which reflect creative responses to new demands and developing visa scenarios to broaden the market for pathways.  It may be that the continuing need for flexibility brings an end to the long-term, deeply embedded, joint-venture vision that was considered by some to be an industry game-changer. 

Image by Clker-Free-Vector-Images from Pixabay 

Pathways Pivot for India?

E.M. Forster suggested we should “mistrust all enterprises that require new clothes”2 but Shorelight has restyled its website and is offering aggregator type filters which reflect a change of direction.  The filters help clear up what’s been going on with their portfolio and suggests that the pressures on their pathway offerings are causing them to pivot at pace.  The site gives a clear sight into the dash for direct recruitment partners that looks to be the increasingly popular modus operandi for all pathway operators. 

Searching suggests that a “groundbreaking new partnership”, signed with Mercer University in October 2018 who were described as “an exemplary partner for Shorelight” at the time, doesn’t even make the roster in 2022.  The pathway program in the fifteen year contract with the University of Kansas signed in 2014 seems to have come to an end just eight years later.  And the pathway with the University of Central Florida (UCF) heralded in 2013 as “another big win for the students of an institution that is clearly on the move” is also over.

Only nine university partners are shown offering the full service of undergraduate and postgraduate pathway option with direct recruitment in both.  Leaving aside the three American Collegiate offerings there are a total of 14 undergraduate pathways and 12 postgraduate pathways.  It’s a complex offering, including three which are postgraduate direct recruitment only and with some significant restrictions – the Johns Hopkins University choices appear to be for engineering programs only.

UG Direct Only11
UG Direct and UG Pathway Option (no PG)14
PG Direct Only3
PG Direct and Pathway Option (no UG)12
PG and UG Direct with Pathway Options in both9
UG and PG Direct Only (no pathways)12

For new readers, the American Collegiate offering is a “choice” program hosted by American University in Washington DC and with courses through UCLA Extension in Los Angeles.  The goal is then to transfer to an institution that will accept the credits.  American Collegiate Live offers online courses taught by UMass Boston and bearing academic credit with “full recognition” by 13 universities

The Past Is a Different Country1

When Elizabeth Redden reviewed the US pathway scene for InsideHigher Ed in 2018 she commented, “With a few notable exceptions, both Shorelight and INTO tend to contract with large institutions, and their partnerships tend to be larger scale.”  Those days seem long past with Shorelight’s burgeoning list including a long string of smaller, regional colleges.  INTO’s closures at Washington State University and Colorado State University also suggest the game has changed irrevocably.

For completeness, the current state of relationships3 on major pathway operator websites shows:

 Current Total US PartnersCurrent US With Pathway*Closed in US Since 2018**
Shorelight42183
INTO1193
Navitas317
Study Group958
  • *Excludes American Collegiate
  • **Pathway announced/operational but no longer shown

It is difficult at this point not to recall the ill-fated words of Karen Khemka, a partner with the Parthenon Group, who said in 2014, “The U.S. third-party/outsourced pathway market is less than half the size of the Australian market despite having a higher education system that is 10 times the size. We anticipate that growth will be constrained only by the pace at which private providers can develop the market.”  It came towards the end of a period when private equity invested over a billion dollars in pathway operators but as I asked in a 2018 blog, “..has attention to the supply side of the equation ignored the challenges of changing patterns of demand around the world?”

Unless We Remember We Cannot Understand1

Curiously, the pathway operators inverted the equation when they were promoting the growing supply of students to meet the demand of universities in the traditional recruiting countries of the US, UK and Australia.  They quoted the dubious “8 million globally mobile students by 2025” mantra and largely ignored the potential growth of inter-country competition, relatively low cost of entry for new pathways, the rising cost of acquisition as agent and student choice grew, and the threat of substitute products through technology.  Ignoring one of Porter’s Five Forces seems poor business sense but shunning all five seems less than sensible when you are investing significant amounts of money.      

One talented US leader, running the American portfolio of a UK-based pathway operator, posed these fundamental questions shortly after INTO celebrated its £66m investment from Leeds Equity and Shorelight’s launch.  The company carried on regardless, although US losses mounted, the quality of partners declined and the UK operation stopped adding new partners.  As the Trojans found, it is unwise to ignore the insights and prophecies of a truth telling Cassandra.

Other observations that were rarely heard out or given sufficient attention included:

  • the home of the pathways in Australia and the UK were 13-year schooling systems where the Foundation year of a pathway completed a fundamental requirement. This gave an ideal opportunity for language tuition and academic skill development.  US universities already took students after 12 years schooling and those with larger international cohorts often had well developed ELIs to accommodate language needs;   
  • recognition that the bubble created by fast-growing demand from China, particularly at undergraduate level, was coming to an end as demographics changed;
  • understanding that the bounty of state-sponsored language students was fading fast and unlikely to be replaced;
  • for many US universities the attraction of students paying out of state fees was as attractive financially as international students and seemed more accessible as a market;
  • the best US universities could already recruit if they wanted to and so the opportunities to have great brand names on the website was always going to be minimal.

A Room With A View?1

While new recruitment markets are emerging they are quite different in character and nature.  The growth in students from India has led to a demand at post-graduate level, often without the need for significant English language or pathway academic skills.  It seems likely that Shorelight’s willingness to take on direct recruitment for less well-known institutions reflects the reality that those students are less brand conscious, looking for lower fees and are more focused on a qualification that gives them post-study work options.

It may be a model that is less stable and less lucrative than the pathway model appeared to be in the early part of the 21st Century but INTO and Shorelight have found the going very tough at many of their US pathways and need to do something.  As INTO launches its new strategy there may even be a longer term appetite for uniting forces with Shorelight in the US to become a super-dominant player.  Bringing the two groups together would offer a large direct recruitment portfolio, allow some selective reduction in competing or uncompetitive institutions, fill a gap in terms of online technology for INTO and should enable significant reductions in overheads.

All of these types of potential mergers are riddled with questions about existing financial arrangements, for example Huron Consulting has $40.9 million in convertible debt in Shorelight Holdings LLC maturing in January 2024, competing institutions and cultural fit.  But when the CEO of INTO is talking explicitly about “lighter touch, lower investment” (The PIE live interview, 11 July 2022) ways of having discussions with universities, it seems reasonably clear that there is a shared interest in building non-pathway relationships.  The real question will be whether the new era for organizations that cut their teeth on pathways can drive enough revenue and profitability to be worthwhile and whether consolidation offers added value.   

Of course, it may also be that the days of the recruitment behemoths are over.  Twenty years of pathways has created some highly skilled individuals with strong in-country contacts who could simply choose to go solo with a smaller portfolio of hand-selected university names.  Faced with a choice between being one of eight names in a portfolio or being in the bag of a sales team with 37, 48 or even 100 different products to promote, a smart university might choose to be in a select pack rather than a faceless herd.

Notes

  1. Shameless use of E.M. Forster book titles and quotes throughout the article.
  2. Apparently, Forster adapted this quote from Henry David Thoreau
  3. It is not always easy to interpret the websites of pathway operators and I am happy to accept authoritative and evidenced corrections and note amendments where appropriate

Image by yogesh more from Pixabay 

(What’s So Funny ‘Bout) Peace, Justice and Strong Institutions?

Readers might need some inspiration for trivia questions about the latest Times Higher Education Impact Rankings so I thought I’d help out.  The Russia Federation had more universities represented than any other country in the 2022 rankings BUT in which SDG category are none of them listed?  It’s a good test of whether anyone can remember all the SDGs but for those that can, the unsurprising answer would be Peace, Justice and Strong Institutions.

This is despite the fact that 49* Russian institutions were listed in that category in the 2021 rankings and it highlights the big problem when you allow universities to self-report and select which categories they enter because they can be really quite good at some things but ignore or even oppose others.  It is difficult to see how a Russian institution could be good at, say, “peace” when there could be 15 years in prison and other serious penalties for mentioning “war” or “invasion”.  Strong institutions also come under serious pressure when Russian Political Rights rank a 5/40 and Civil Liberties rank 14/60 according to Freedom House.

Universities can be enfeebled as institutions by political power and the outcome can be that they even become agents of coercion and repression.  Examples include the Higher School of Economics restricting political activism on campus in 2020 and more recently hundreds of students reported as having been expelled and some students playing an active role in hunting down activist teachers.  The tightening of the Russian Government’s grip on senior administrative appointments and strategic direction is well documented and one author has suggested, “controlling universities via rector appointment may serve as an instrument for controlling young minds.”

THE Fails On Effective Action to Minimise Credibility, Prestige and Marketing

Also, unsurprising is that the universities have continued to use their presence in the Impact Rankings to publicise themselves despite the words of Times Higher Education Chief Executive Paul Howarth on 4 March that “we will be taking steps to ensure that Russian universities are not using branding or other promotional opportunities offered by THE until further notice.”  Here’s a snip from Peter the Great St Petersburg Polytechnic University showing how feeble that statement was and why the THE should ban institutions from the rankings.

It would be good to think that the full weight of the THE’s legal machinery might come crashing down on the Russian universities that are continuing to use the organization’s logo and public properties for their own promotional purposes.  But as we have seen in a previous blog Study Portals, the THE’s partners in monetizing student mobility, also continues to promote the THE ranking of Russian universities.  The statement from THE looks increasingly like a cynical PR ploy to play for time and hope that nobody remembered the promises made.  

Lilliput or Brobdingnag

In Jonathan Swift’s books Gulliver becomes a giant amongst the people of the island country of Lilliput during his first voyage because they are only 6 inches tall.  But the second voyage takes him to a peninsula called Brobdingnag where he lives with a farmer who is about 72 feet tall.  It is a reminder that there is a perspective to most things and the Impact Rankings are worth considering in that respect.

So, another good trivia question might be – universities in which countries seem disinterested in the Impact Rankings?  A good answer might be the USA where only 42 universities are shown but even lower is China where only 13 universities are featured.  The USA number is even down on last year’s 45.

It is difficult to believe that the USA does not have more than that number of institutions with a strong record in sufficient SDG categories to make a bid for the top place.  As it is, only one of the 12 US institutions who rank in the THE’s own world top 20 seems to have taken part.  Neither of the Chinese universities in the world top 20 are mentioned in the Impact Rankings and the three from the UK are also missing.

Professor Barney Glover of the table topping Western Sydney University recognised the problem and commented, “there are too many of the very strong and powerful universities in the world that are not recognised” in the Impact Rankings.”  His university’s website doesn’t go so far as to acknowledge that situation or that less than half the universities in the World Rankings feature in the Impact Rankings.  But I think he may realizes that WSU was visiting Lilliput on this occasion.

Writing in University World News Dr Anand Kulkarni makes the point that while the number of Indian universities participating grew  that “what is also noticeable is that, unlike the World University Rankings, the famed Indian Institutes of Technology are not as prominent.” Rankings expert Ellen Hazelkorn noted that absence of many leading universities “may not be due to their poor(er) performance but rather their choice not to participate” and commented on the THE Impact Rankings reliance on “self-reported and interpreted data”.  If, as claimed by THE chief knowledge officer, Phil Baty the Impact Ranking are “redefining excellence in global higher education” it rather makes one wonder why the THE don’t have the courage of their convictions and drop their other league tables.

There is a tradition in the English Football Association Challenge Cup (the FA Cup) that there are qualifying rounds before the First Round Proper when teams from the bottom two tiers of the professional Leagues join.  The Second Round Proper sees the teams from the second tier join and finally the Premier League teams join for the Third Round Proper.  The Impact Rankings look a little like selecting the winner of the FA Cup long before the Third Round Proper.

Not The Only Game In Town

This is not to argue that many of the institutions who enter aren’t doing magnificent work in some areas related to the SDGs.  But it does suggest that some institutions have recognized that the THE Impact Rankings are just another attempt to build rankings for commercial benefit and private equity gain or are simply unwilling to undertake the extra administration for little gain.  There are also other channels, with Carnegie Mellon, Georgia Tech, Rice, Harvard and Northeastern not featuring in the Impact Rankings but all being mentioned in a recent United Nations Foundation blog highlighting innovative ways progress on the SDGs is being driven by universities in the US.

There is also increasing evidence that students are less interested in rankings and more focused on employability while interest in the SDGs seems less evident.  The THE’s own research suggests that “only 16 per cent said they would choose a university that had a worse reputation for teaching and research if it had a better reputation for sustainability.”  It may be that the refusal of significant numbers of universities to become involved is a sign that the merry go round of league table mania has passed its peak.  

Note:

The title of this blog is a small nod to the classic tune “(What’s So Funny ‘Bout) Peace Love and Understanding” written by Nick Lowe and originally released by his band Brinsley Schwarz in 1974.  It became more famous when recorded by Elvis Costello and the Attractions in 1978 but even then was only a B-side.  It has been played by many artists to reflect hope in troubled times and the message seems very pertinent right now.

 Image by Joan Cabras from Pixabay 

*As a note of clarification. In its Overall Rankings list the THE only shows the top three scores of the institution plus their SDG17 ranking. They list separately, presumably for all institutions registering a score in the specific category, the ranking for each individual SDG. Thus, in 2021, 27 out of 75 Russian institutions had SDG 16 count towards their overall ranking but 49 were listed as having a score in the SDG 16 category.

CHINA CRISIS FOR US PATHWAYS?

My early January blog on the two big US pathway operators focused on specific examples of INTO University Partnership’s (INTO) pathway problems without similar insights into some of Shorelight’s major partners.  There had been some insights into lacklustre performance at Louisiana State University, Auburn University and the University of Kansas back in October 2019 (Shine a Light on Shorelight) but an update is overdue.  There is also some news from INTO as it confirms new faces in senior management* and some fundamental changes in its relationship with university partners. 

In the US the most significant point is that INTO has become the sole owner of what was established as a joint-venture with St Louis University.  This follows the closure of joint venture operations at Marshall, Washington State and Colorado state over the past two years.  INTO’s annual report does not list any shareholding in the pathway at Hofstra University so it now has only seven joint-venture partnerships in the US.

The big question, given that all of the most recent US announcement from both INTO and Shorelight have been for direct entry partnerships, is whether the bubble has totally burst on pathways.  Without a significant return of students from China it is difficult to see that predominantly graduate growth from India is going to sustain them.  Looking at the way enrollments have panned out in Fall 2021 suggests this could be the direction of travel.

Shorelight Stumble at Auburn And American

American University is generally reputed to be one of the star performers in the Shorelight portfolio but the enrollments reflect the harsh realities of the pandemic.  The numbers indicate that enrollments in Accelerator/Collegiate/PSE courses were already in decline before Fall 2019.  Despite the limited bounceback in overall enrollments to the US reported by Open Doors in Fall 2021 there is no evidence the Shorelight pathways are seeing an upturn.  

Source: American University Office of Institutional Research and Assessment

The story continues when American University’s total Fall enrollments are reviewed.  Separate axis are used to reflect the significant difference in volume between Chinese an Indian students and the only upturn in Fall 2021 was in Indian graduate students (about 10 students more year on year).  The decline in Chinese undergraduates begins the year after the fall in Accelerator/Collegiate decline and suggests the longer term vulnerability that American University has to declining Chinese numbers. 

Source: American University Office of Institutional Research and Assessment

The combined enrollments in the first and second term Global Masters Accelerator at Auburn University shows similar characteristics but with even more significant declines in volume.  Total enrollment has fallen from a peak of 87 in 2017 to just 11 in Fall 2021 with the decline in Chinese students driving the outcome.  Attracting students from India to pathway programs seems unlikely to make up the shortfall. 

Source: Auburn University Office of Institutional Research

Less Spirit at INTO Saint Louis University

Saint Louis University has seen a significant shift in direct enrollment graduate numbers in 2021 with Indian students outnumbering those from China.  This does not, however, go far enough to counterbalance the decline in Chinese undergraduates over the past five enrollment years.  Evidence from other INTO pathway operations has shown that this plays out even more dramatically at pathway level because Indian graduate students generally have less need of the services provided.

Source: Saint Louis University Office of Institutional Research

INTO St Louis (INTO SLU) was first established as a joint venture in September 2017, becoming, at the time, the seventh INTO partner in the US.  Between the financial reporting in 2018 and 2020 the debt owed by the joint venture to INTO had grown from £1.8m to £3.5m and the current circumstances suggest there is little likelihood of it being repaid in the near future.  If pathways are not enrolling sufficient students they quickly become unviable and need significant financial support from parent organizations.  

INTO’s most recent Annual Report is coy on the matter and simply reports that “subsequent to the year end INTO’s shareholding in INTO SLU LLC increased to 100%”.  Having lost three pathways in recent years there was probably little appetite for losing another partner. The upswing in interest from Indian students may have tipped the balance to continue a pathway while getting exclusive rights for direct enrollment of international students.

Overall, INTO’s US operations all appear to be increasingly indebted to them with even USF slipping from creditor to debtor in the most recent report and accounts.  While it is reasonable to expect new businesses to take a while to get into profit INTO hasn’t opened a joint venture in the US since Illinois State University in 2018 since when the total level of indebtedness across all US operations has nearly doubled from £18m to £35m.

Source: INTO University Partnership Annual Reports***

The most recent accounts for INTO Illinois State University LLC (INTO ISU) make quite interesting reading with the financial deal including a Promissory Note with INTO North America which allows borrowing up to $6m in operating capital with an interest rate of 6%.  Another number that catches the eye is that marketing expenses were an eye watering 77% of tuition revenue. The pandemic caused the LLC to cease operations for a period of up to 23 months, effective August 1, 2020 (the “Deferment Term”) and it will be interesting to see what happens next.

China Crisis for Pathways?

It is no secret that the early growth of pathways in the US owed an enormous amount to English Language scholarship students from Saudi Arabia and the acceleration of incoming students from China.  As numbers of the former fell away pathways became increasingly reliant on the latter which made the COVID-19 situation particularly difficult.  The $64 million dollar (sic) (and maybe more) question is whether the future will see a significant return to those pre-pandemic conditions.

Looking on the bright side might involve pointing to the growth in Chinese undergraduate applicants to the UK (up 12% year on year in January 2022) for entry later this year.  A more negative view might be reflected in the range of reasons summed up in “How Washington’s hawkish China policy alienates young Chinese”.  Optimists could point to the recent ending of the “crackdown on Chinese research ties” while pessimists would suggest that the countries are “locked in a stalemate”.

Back in 2014, Peggy Blumenthal, a 30-years at IIE and a senior counselor to its then president, Allan Goodman, discussed the underlying issues with Science magazine and its worth a look.   China had devoted significant resources to build graduate capacity, more of the professors had been trained in the US and Europe, and even at that time “the added value of a U.S. graduate degree has shrunk in relation to a comparable Chinese degree…for the vast majority of Chinese students.”  It’s arguable that the quality of Chinese universities has increased further and that there has been little to significantly increase the lure of a Western degree.

What is also clear is that, as discussed in a recent blog, 2022 is likely to be the first year that all four major recruiting companies are competing effectively at the same time and there have been a number of increasingly powerful entrants to add to the mix.  There seems every likelihood of continuing international tensions and the potential for students to be “weaponized” by their home government as a form of economic and cultural sanction.

The most prestigious universities in traditional recruiting countries have little need to worry but the early signs from Fall 2021 are not particularly encouraging for universities or pathway operators that have relied on Chinese students paying high fees.  While the growth of graduate students from India might provide some direct recruitment solace for universities this is not going to resolve the issues facing the pathway sector.  Shorelight appears to have already set its sights on building a direct recruitment portfolio of institutions over and above any pathway interest but since the University of Arizona announcement in June 2020 INTO appears to have no obvious sense of direction to face the changing market dynamics.

Notes

*Tom Hands has recently joined as Chief Recruitment Officer. He has previously worked in recruitment positions for Study Group, Navitas and Kaplan. Namrata Sarmah joined at the end of 2021 as Chief Product Officer having previously been Senior Director of Product at ViacomCBS

**As ever, research is presented in good faith but with a recognition that classifications of courses can be complex. I am happy to receive any authoritative corrections (with explanations) and would record them as notes on this blog.

***A review on 1 September 2022 showed that the INTO University Partnerships Annual Reports for 2020 and 2021 carry different figures in reporting of debtor information for INTO Washington State University and INTO Illinois State University. In the Report to July 31 2020 the debtor levels are shown as £3.156m and £5.438m respectively while in the Report to July 31 2021 (which shows the prior year as a comparison alongside the current year) the debtor levels are shown as £1.873m and £3.365m respectively. The July 31 2021 Report appears to make this change due to a prior year restatement and the graph has been adjusted to reflect that. This does not alter the explanatory text in the paragraph immediately before the graph.

SHORELIGHT REPORT AND STUDENT SAFETY – ILLUMINATION OR OBFUSCATION?

We are familiar with the notion that there are “lies, damned lies and statistics” so whenever an organisation throws up figures to paint a scenario that is in their interests it’s always worth taking a second look at the source data.  Students, parents and agents should particularly beware claims made primarily for marketing purposes when safety issues are at stake.  Caution is certainly a good approach to take with the recent collaboration between Shorelight and US News Global Education (USNGE) which includes a, so called, University Safety Index and league table of the safest States for international students.

There is no place in the world that is entirely free of potential trouble, and international students should be alert to both the joys and the potential troubles of studying overseas*.  The widespread rise in hate crimes around the world and specific incidents of racism are as concerning for the UK, Australia and Canada as the USA. Reputable universities work hard to make their campuses as safe as possible but the advice to incoming international students should be pragmatic rather than marketing gloss. 

There is no reason to believe that the numbers used are incorrect but the way the Index is constructed shows Washington D.C., Vermont and Massachusetts as the top three states of “the “extremely safe” category for international students.”  In September 2021 these States were listed as the top three of the list for Hate Crimes per capita in a 24/7 Wall Street report using FBI Uniform Crime Data and the FBI data shows Washington D.C. as having the US’s most violent crime rate per 100,000 inhabitants in 2020.  Further analysis suggests these anomalies reflect a selection and conflation of data that may mislead international students about the relative safety of their study destination.

Table Source: University Safety Index: State Safety by International Student Enrollment Percentage from How Safe Are U.S. Campuses?

Not All Crime on US Campuses is In Decline

While focusing on a comparison to criminal offenses two decades ago the Shorelight/USNGE’s own graph (below) shows that the “criminal offenses on campus” were comparatively higher in 2019 than five years before.   Also, the long term decline is largely due to a fall in motor theft, robbery and burglary which masks other trends on offenses against the person.  The U.S. Department of Education’s Campus Safety and Security Survey (CSS Survey), the source of the Shorelight/USNGE data on criminal offenses, shows that hate crimes, “sex-offences-forcible” and violence against women (VAWA) have increased in recent years.

Source: University Safety Index: State Safety by International Student Enrollment Percentage from How Safe Are U.S. Campuses? By Selene Angier 

Since 2014 the number of cases historically recorded by the CSS Survey as “Sex Offenses – Forcible”, increased 65% from 7,955 to 13,121 by 2019.  Since 2014 these offenses have been reported separately as “rape” or “fondling” with the former growing 33.5% and the latter by 124.2%.  A National Center for Education Statistics summary reflects these figures and notes that “according to reports in a student survey administered at several dozen large universities, officially reported sexual assaults represented only a minority of sexual assaults that occurred.”  

There has been excellent progress in reducing motor theft, burglary and robbery but the situation appears to have worsened in terms of sexually related offenses.  Offenses recorded as “aggravated assault” also remain stubbornly around the 4,000 mark. Mixing and matching the categories of crimes against property and crimes against the person fails to offer clarity that might be helpful in assessing risk.

Source: U.S. Department of Education Campus Safety and Security Trend Data

The CSS Survey also shows, separately, a 47% growth in reported offenses of violence against women, from 12,232 in 2014 to 17,578 in 2018 (the most recent data).  These have been registered since the Violence Against Women ReAuthorization Act 2013 (VAWA) brought changes to Clery Act reporting requirements.  With estimates that over 40% of international students are women it would seem reasonable to reflect this information in an article on campus safety.

Source: U.S. Department of Education Campus Safety and Security Trend Data

International Student Safety Off-Campus Matters

The CSS Survey data only includes cases, “…on campus, on property controlled by the university or a student organization, or on public property immediately adjacent to campus.” By using this measure the Shorelight/USNGE Index removes any information about the towns and cities where international students will hope to be welcomed.  This contributes to the leap of logic that establishes a league table of “the safest states to study in” which doesn’t include any city-wide or state-wide crime data.

The principle of aggregating data across a state is, itself, highly questionable when it comes to giving a student information on selecting a specific destination.  The statistician joke, credited to C. Bruce Grossman, that with your head in the oven and your feet in the freezer you are comfortable on average, comes to mind.  This consequences are evident as soon as you begin to consider more wide-ranging data about the crime rates in different cities.

In 2021 US News and World Report considered Massachusetts the 7th safest state in the US (although only 24th lowest for violent crime) but COVE Home Security in 2017 suggested the chances of being a victim of violent crime in Boston made “the city less safe than 83 percent of US cities”.  Neighbourhod Scout indicates that UMass Amherst is in a town that has a crime rate of 5.99 per 1,000 residents while UMass Boston is in a city with a crime rate of 26.45 per 1,000 residents.  Shorelight/USNGE use their Index to say both universities “…are located in the “extremely safe” category for international students” even though the numbers suggest the locations are quite different in terms of crime.

Washington DC, according to the Index is an ‘Extremely Safe’ State despite a 2019 crime rate which some sources indicate is 1.8 times higher than the US average and higher than in 95.5% of US cities.  American University’s campus may be a haven of civility and courtesy but students would probably be wise to exercise appropriate caution when they move onto the surrounding streets.  The university provides personal safety tips to international students which is both responsible and appropriate.       

Hate Crime is Relevant to International Students

The report is heavy on presenting data to reassure international students, yet surprisingly silent on the incidence of Hate Crimes recorded by the CSS Survey.  It was a 2008 amendment to the Clery Act which required post secondary institutions to report these incidents.  In 2018 the National Center for Education Statistics indicated that 43% of reported Hate Crimes in 2018 were motivated by racial bias.

The data presents a grim picture with a spike over the most recent years which is of relevance to students travelling to the US from abroad.  This may not fit the Shorelight/USNGE narrative but it is an important issue if students are to be given the most complete picture.  The Australian response to international students who are victims of crime might also inspire positive initiatives to engage productively with the issue rather than ignore it.

Source: U.S. Department of Education Campus Safety and Security Trend Data

At a state level Shorelight/USNGE report considers Massachusetts “extremely safe” for international students but the state’s campuses rank behind only New York (250) and California (174) in terms of reported Hate Crimes in the Survey.  The trend has been remorselessly upward for a decade.  In the broader Massachusetts context even the Editorial Board of the Boston Globe has recently argued that the situation in the state is serious enough to warrant its legislature updating hate crime laws.

Source: U.S. Department of Education Campus Safety and Security Trend Data

Whose Facts for What Purpose?

It is not unusual for organizations to give the most positive presentation of their situation and the Index is positioned as a response to a situation where “news headlines and social media shares can unfairly grab attention and raise concerns”.  But it seems specious to suggest that “U.S. News and Global Education (USNGE) and Shorelight — two leaders in U.S. higher education — have partnered to develop the University Safety Index” when one is owned by the other.  It also seems misleading to present the item as news on a website where the branding gives the gloss and reflected credibility of US News and World Report’s league tables.

While the article is designated as “News” the authorship, data and presentation of universities looks like an inside marketing job.  The writer was once on staff for Shorelight, has written regularly for the company’s website and describes herself as a “content manager specializing in e-commerce marketing, UX messaging and lifestyle brands.” The statistics were compiled by Shorelight’s vice president of data science and strategy.

The marketing dimension becomes even more clear when “Notable U.S. News Global Education Universities” are highlighted – they just happen to be Shorelight partners.  There is, however, no mention that the lowest “Somewhat Safe” category of the Index features Florida and Illinois where Shorelight has partnerships with Florida International University, University of Central Florida and University of Illinois at Chicago as well as new partner Eureka College.  The implication of the Index is that international students have more reason to be concerned about safety if they go to those institutions but that seems a less palatable marketing statement.       

Summary

Several countries and many universities are in a headlong dash for more international students and most recently Colleges Ontario commented on the need to recruit them to fill funding gaps. CBC News recently reported on the problems for students from south Asia who had arrived to study in Calgary but couldn’t find jobs and were unprepared for the winter weather. It’s a toxic mix where students are not getting realistic information about the situations they will encounter and there is every chance it will end in tragedy for individuals as well as blemishes on institutional reputations.

Fall intakes have shown that international students are returning to the US in significant numbers after the pandemic but it is entirely possible that some will have lingering doubts about attitudes towards foreign visitors. It is, however, unhelpful to underestimate the importance of ensuring that young people are given balanced information and not lured into a false sense of security.  International students are courageous, committed and deserve more respect than that.       

The US should also be applauded for publishing campus crime data in a consistent manner and might consider positioning this as a competitive advantage over the UK where there is a growing clamour for better data on student-related crime. While the Complete University Guide is to be commended for giving comparative information on an issue where one in five students are likely to be a victim, action from HESA or the Office for Students would be welcome.  For international students, agents and other decision makers the best advice is to demand information directly from your university of choice and avoid sales promotion gimmicks.

NOTES

*  I am not aware of any comprehensive and credible research on which countries are safest for international students. Various guides exist but tend to base their outcomes on overall country statistics. The Founder and CEO of iSchool Connect based a recent table in The Tribune of India on indexes covering factors such as Global Peace, quality of life etc. It includes Singapore at number five – a country where the Prime Minister has recently acknowledged “resentment over foreigners”.

**US News Global Education was formed as a collaboration between US News and World Report (USNWR) and Shorelight but is a subsidiary of Shorelight. The University Safety Index is a reminder of the link to USNWR’s own league tables whose methodology ex-Editor Peter Bernstein, in a classic Freudian slip, called “this mythology.”

***This blog relies, in part, upon my understanding and interpretation of various data sources and media reports. While data is almost always partial in the way it is collected, categorized and presented I have considered a range of sources in an attempt to ensure the points made about specific locations are reasonable. I am happy to correct any material errors brought to my attention by an authoritative source.

Pathways to the Future for US Big Two?

Open Doors Fall 2021 snapshot offered some solace for international student recruiters in the US after the strong headwinds of recent years.  It comes after nearly two years of pandemic that has seen a focus on technology enabled learning options, increased online language testing and a brutal culling of pathway relationships during 2019 and 2020.  A deeper dive into the numbers suggests that fundamentals are changing in ways that will have a material impact on the future of the private pathway providers.

Global demographics indicate that future growth will be driven by India and south-east Asia with a Mitchell Institute report indicating that “India has now overtaken China as the largest source country of international students.”  The majority of Open Doors respondents are now prioritizing recruitment in India – 56% in 2021 compared to 45% in 2019 – compared to China where the percentage is now 51% compared to 58% two years ago.  However, an increasing numbers of international students seeking graduate level study and having reasonable proficiency in English will brings challenges for pathways in their existing format.  

If Chinese students become less willing to travel due to caution over health, political factors and declining returns on investment in a western degree the problems will be compounded.  INTO’s own research from November 2021 notes that agents from China, Hong Kong and Macau think that the US has handled the COVID-19 vaccine roll-out considerably worse than the UK or Australia.  The rankings for the US being “welcoming and safe” are even less helpful.

Source: Agent Perspective on International Education in the Context of COVID-19, INTO University Partnerships, November 2021

The two established pathway operators with most at stake in the US are Shorelight and INTO but recent developments suggest differences in their willingness and ability to innovate, adjust strategy and move decisively.  It has been eight years since Shorelight burst onto the scene with a model that looked like an enhanced version of INTO’s pathway operation but VP Imran Oomer’s early claim that “we wanted to come in without a formula” was an indication of being willing to adapt. Shorelight now has at least 17 pathway partnerships while INTO has lost Marshall University, Washington State University and Colorado State University in the past three years to reduce it to a portfolio of nine US partners.

Past success is not always an indicator of future prosperity but a brief review of the two companies suggests how they might fare under current circumstances. The context and references are in the public domain and offer some grounds for speculation about possible directions of travel.                     

Shorelight

Shorelight announced five new partners towards the end of 2021 – Eureka College (Illinois), Austin College (Texas), St Thomas Aquinas (New York), Southwestern College (Texas) and Wilson College (Pennsylvania).  It seems a significant shift of emphasis for a business which had previously focused almost entirely on partnerships with US News and World Report nationally ranked institutions.   The announcements say that they are “accepting international undergraduate student applications through Shorelight” which indicates these are not the full pathway model. 

It’s always been difficult to see inside Shorelight’s finances and performance but there have been several indicators that enrollment aspirations for some partnerships have fallen short of expectations.  Huron Consulting Group Inc’s third quarter filing in November 2021 show that the ‘fair value’ of the convertible debt investment in Shorelight was reduced from $64.4m (December 2020) to $61.5m.  The total cost basis over three tranches (2014, 2015 and 2020) was $40.9m with a consolidated maturity date of January 2024.

In November 2021, CIBC Innovation Banking announced new debt financing for Shorelight although the amount was undisclosed.  The announcement says that the money will be used to “invest in automated, self-service tools for students, counselors and universities engaged on its platform” which may be a glimpse of the future of the Shorelight business. This echoes the language of the recruitment aggregators who have been able to secure significant investor funding in recent years. 

The latest surge in partners may be designed to impress potential new investors.  US recruitment conditions have eased and a robust pitch highlighting online delivery, long-term contractual partnerships with well-known brands and a burgeoning new stream of direct recruitment partners could be attractive.  Memories of the past few years of international enrollment declines are fading but with the mid-term elections in 2022 and a Presidential election now just three years away it could be a small window of opportunity.

More intriguingly, Shorelight may be in a position where a capacity for online delivery, the option of face-to-face study and a technology-led recruitment capability has made it into a credible prototype one-stop shop for student needs.  A decent number of strong brand names, a deepening pool of price points and a widening range of institutional types makes the portfolio big enough to provide a credible breadth of choice.  With reasonable post-study work options in the US, a more benign visa regime and evidence of demand from high-growth source countries there could be some attraction to playing the longer game.      

INTO

INTO’s performance has been reasonably well recorded over the past few years and the new year sees the six-month anniversary of CEO Olivia Streatfield’s tenure.  The recent departure of the company’s Chief Recruitment Officer offers scope for a revitalization of a top team that has been virtually unchanged for over five years.  Cumulative losses of partners in both the US and UK may have undermined the company’s ability to capitalize on blossoming UK enrollment and the resurgence of the US.

Over a five-year period, where it has lost six face-to-face pathways while major competitors have been growing their portfolios, INTO’s competitive edge has looked increasingly blunted.  Linking with Cialfo arguably handed ownership of a key recruitment channel to a third party after the 2020 annual report had trumpeted the acquisition of Schoolapply AG as “part of its strategy to continue develop (sic) its technology platform to maximise student recruitment…”.  Schoolapply was closed down in February 2021, just nine months after the purchase.     

There are few signs of INTO responding effectively to the opportunities arising from online learning. By contrast Study Group has Insendi, CEG Digital has seven online university partners, Shorelight has Shorelight Live and American Collegiate Live, and Kaplan is working with Purdue and has online UK partners.  Even relative newcomer Oxford International Education Group, which is opening its first US operation in 2022, has established a “Digital Institute”. 

INTO’s most recent partnership in the US is the direct recruitment relationship with University of Arizona (UoA) which reflects the recent direction of partnerships announced by Shorelight and Study Group.  It is not a competitive differentiator but may be a wise first step away from the pathway model at a point when enrollments at Oregon State University offer an insight into the problems as international student mobility trends shift.  Declining enrollments at the INTO OSU pathway operation are driven by a significant decline in students from China but there is no evidence that enrollments from India are increasing to pick up the slack. 

Source: Oregon State University, Institutional Research Enrollment and Demographic Reports

The past year has also seen INTO announce its first partnership in Australia which provides an even more complex set of options for its sales team to manage.  Diversity can be an attractive feature but often comes at the expense of spreading management talent too thinly and confusing the market. By contrast Shorelight has retained a laser focus on working with US institutions while diversifying the ways in which it can serve the needs of agents and students.          

INTO’s UK and US portfolio could support a level of organic growth as student mobility increases but a trade purchaser looking to beef up existing operations in the UK, US and Australia may be better able to optimize the assets.  With money still cheap and a lot of dry powder around it would not be too difficult to see one of the major global players, with relevant management chops and sales expertise, trying to find some synergies.  It would also be interesting to see if the management team has enough confidence in its skill and ability to invest in itself, buy out the Leeds Equity stake and compete aggressively in the new world.

It is appropriate to reflect that demand for US higher education remains strong throughout south Asia and that record numbers of study visas were approved for students from India. For operators that can meet that demand with a mixed US portfolio offering realistic options while also catering to the students considering online options as part of their planning process the future could be bright. While reflections on the future of the current big two pathways operators are speculative there is no doubt it will need an agile, flexible and committed approach to make the most of the changed circumstances.