A most fascinating article from The Chronicle about the drive to increase revenues through international enrolments, and the private sector partnerships that make it possible: “Problem: Foreign Students. Solution: Corporate Partner,” Karin Fischer, The Chronicle of Higher Education 55.2 (Sept. 5/08, A41) [Thanks, Fran!]:
More colleges are recruiting and educating overseas applicants with the help of private companies, but the arrangements create controversy
By Karin Fischer
In July, Oregon State University struck a deal with a private company to recruit and educate foreign students in a college-preparatory program. It was the first American college to do so, but it very likely won’t be the last.
Over the past decade, such partnerships have become commonplace in other English-speaking countries. About 20 percent of Australia’s foreign students come into the country through these preparatory, or pathways, programs. In Britain, universities are regularly approached by companies looking to strike multimillion-dollar deals.
The reason is clear: pathways programs enable colleges to tap into a much broader pool of students, including those who may not qualify on their own for admission because of language difficulties, incomplete course work, or limited study skills.
Champions of the partnerships call them smart moves, financially and academically. They allow colleges to recruit students they couldn’t have reached with their own marketing budgets, and can give those students the academic grounding to make the transition to full enrollment. And because these pathways programs can greatly expand enrollments of international students, they provide new revenue to cash-strapped colleges.
The partnerships are not without controversy, however. Critics argue that they outsource core educational functions and that academic standards may well be compromised in pursuit of profits.
“Yes, we contract out to get our carpets cleaned,” says Brenda Austin-Smith, president of the University of Manitoba Faculty Association, which has opposed the deal reached by the university and an Australian company, Navitas. “But isn’t educating students a public good?”
As the global pursuit of students intensifies, though, colleges everywhere seem more willing to consider deals that give them a competitive edge.
“The institutions that survive the next 20 years are going to be those that cast a wider net,” says JoAnn S. McCarthy, an American international-education consultant who has reviewed some of the joint ventures.
Losing the Advantage
For decades the United States was the prime destination for international students, its pull so powerful that American colleges could attract top foreign talent with little effort.
The September 11, 2001, terrorist attacks fundamentally changed that. New and tougher visa rules made it more difficult for students to enter the country, leading to a temporary drop in foreign enrollments that shocked many colleges out of their complacency.
Increased international competition for students also served as a wake-up call. The message to American educators was clear: If you want more students, you need to work to get them.
While many colleges have since begun aggressive recruitment campaigns, the U.S. share of the foreign-student market continues to shrink. The proportion of foreign students who enter American colleges hovers around 4 percent of total enrollments.
Overseas, where universities have traditionally received greater public subsidy, the sense of urgency struck earlier. Australia was the first to act, after government support for higher education there began to deteriorate in the mid-1990s. Tuition-paying foreign students seemed an obvious source of revenue for the country’s predominantly public higher-education system.
But many potential students didn’t have the necessary skills to survive in a Western-style education system, says Alan Olsen, a Hong Kong-based education consultant.
Some Australian universities developed their own preparatory courses and English-language programs. Others balked, concerned that they lacked the money or the expertise. That opened the door for private companies.
One of the earliest on the scene was IBT Education Ltd., now known as Navitas, which has arrangements with 22 universities worldwide. Its first partnership, established in 1994, was with Edith Cowan University, which has campuses in and around Perth, with just over 16,000 undergraduates in all.
Some administrators and faculty members were hesitant to invite a for-profit company to the campus, says Warren Snell, the university’s vice president for resources and chief financial officer. “We had a lot of questions to work through.”
Fourteen years later, Mr. Snell says the university is pleased with the partnership. The proportion of international students has jumped to 14 percent of total enrollments, he notes, up from 4 percent when the program started.
The Navitas model is to create a separate, yearlong pathways program, usually housed on the campus, in collaboration with the partner institution. Tuition varies based on the course of study but is often comparable to the fees paid by international students enrolled as undergraduates. At Edith Cowan, a student in an engineering pathways program, for example, pays about 19,000 Australian dollars, or about $17,600 (U.S.), while a foreign student seeking a bachelor’s degree in computer-system engineering pays $15,500. An Australian undergraduate, by contrast, pays about $6,340.
In Edith Cowan’s case, the pathways program is known as the Perth Institute of Business and Technology, or PIBT. It recruits students through a network of agents and offers English-language instruction, pre-university preparation, and a first-year curriculum that helps students transfer into a range of courses.
Faculty members set the curriculum, recommend instructors, and monitor student performance. They are under no obligation to accept the institute’s graduates but will give successful ones course credit for some of their work.
The program allows students like Wan Ying Chua to enter directly into the second year of a bachelor’s-degree program.
Ms. Chua, a 23-year-old from Singapore who graduated from Edith Cowan with joint degrees in marketing and communications and information technology, says the program prepared her for a new educational style.
“The study system was very different as compared to what I was used to in Singapore,” she says in an e-mail message.
This year some 590 students are enrolled at Edith Cowan after completing work at PIBT . about a third of all foreign undergraduates at the university, Mr. Snell says. Typically about 90 percent of the students in the program go on to matriculate at the university. Roughly 85 percent of those students complete their studies, a rate equivalent to that of international students who directly enroll there.
Rod Jones, Navitas’s chief executive, says Edith Cowan, like most universities, is “not geared up” to offer the small, intensive courses that the company can. Foreign students, he says, “can’t be dumped in a large lecture hall and succeed.”
The company covers the program’s marketing, recruitment, and operational costs, while the university provides classroom and office space. Students pay tuition to Navitas, which in turn gives the university a cut of 20 to 30 percent, depending on the course of study, Mr. Jones says.
The financial benefit to Edith Cowan comes once the students from the pathways program transfer into the university, where tuition rates for international students can be as much as three times those paid by their domestic counterparts.
As for Navitas, net profits for the company, which is listed on the Australian Stock Exchange, have grown by 16 percent this year.
Rise of the Joint Venture
As Navitas and other companies have mushroomed in Australia . almost every university there now runs a pathways program . some are looking abroad for new business.
The biggest new market so far is Britain, where Navitas opened a program with the University of Hertfordshire in 2000.
Other for-profit providers, including major international-education companies, have begun making similar deals. Kaplan Inc., which is better known for its test-prep business in the United States, has partnerships with five British universities.
Britain also has given rise to a more complex partnership model, the joint venture.
That approach got its start in 2005, when East Anglia University sought help recruiting students from outside the European Union. Campus officials were also interested in having an “entrepreneur” take over East Anglia’s struggling English-language center, says Edward Acton, pro-vice chancellor for academics.
David Eastwood, vice chancellor at the time, began talks with Andrew Colin, who had founded another international-education company, Study Group. Mr. Eastwood’s goal was a deal in which the university would outsource some work but maintain control over recruitment and instruction.
Out of those conversations came Into University Partnerships, a British company that would go on to sign an agreement with Oregon State University.
While the terms vary, the two parties generally agree to split the work and the cost of recruiting and educating international students. The universities offer their brand and their academic oversight, while the company contributes marketing resources and a network of 400 recruiting
In some cases, Into, as the company is known, builds facilities for students on the campus and leases them back to the university.
It is too early to say how well the company is faring; its first 145 pathways graduates entered East Anglia’s undergraduate programs last fall. So far Into has reached deals with five British institutions, including the University of Exeter and Glasgow Caledonian University.
On its Web site, Into says it anticipates that each partner university will earn 10 million pounds per year in tuition, or about $19-million, from international students after the programs mature.
At Oregon State, the company expects to follow much the same model, although the university, through the state’s bond authority, will shoulder the cost of constructing classroom and residential facilities, estimated at $52-million.
Sabah U. Randhawa, Oregon State’s provost and executive vice president, says the bonds will be paid off through the fees of students enrolled in the pathways program.
Between 150 and 200 students are expected to enroll in the program when it begins, in the fall of 2009. Within five years, the partners hope to attract as many as 650 students annually.
The university and Into will split the profit from fees paid by the pathways students. Oregon State will receive the revenue from tuition paid by the students who go on to enroll in degree programs.
With out-of-state tuition at $18,864 a year, the university expects to receive as much as $25-million annually from tuition and its share of pathways revenues after five years, Mr. Randhawa says.
Ambitions Beyond the Familiar
Despite the buzz surrounding those ventures, much about them will seem familiar to many Americans. Colleges for many years have contracted out English-language instruction to for-profit companies. ELS Language Centers, one of the largest, offers instruction at more than 50 locations across the country, most on college campuses, and also helps colleges recruit abroad.
The practice of paying commissions to overseas recruiting agents, meanwhile, is spreading in the United States.
And the idea of mixing language instruction and undergraduate courses is not wholly foreign.
Northeastern University this fall will begin offering a pathways program that will allow international undergraduates to take core classes in mathematics, science, and other prerequisites while receiving intensive academic support. Kaplan will handle recruitment and nonacademic services for the program, says Christopher E. Hopey, vice president and dean for professional and continuing studies, while the university will maintain control over instruction.
Oregon State’s experience illustrates why so many universities find a one-stop-shopping approach appealing.
For the past decade, the university has offered, through its English Language Institute, a few “bridge” courses to help foreign students keep up with vocabulary, prepare for tests, and improve their study skills.
But there were shortcomings to that approach. For one thing, the classes were offered irregularly, says Jane E. Averill, director of the English Language Institute, because there were not enough undergraduates to take them. So when Into University Partnerships approached Oregon State with a plan to substantially expand its foreign enrollment by building on the institute’s expertise in language and remedial education, the university agreed.
The two partners are now collaborating on a large scale. They expect to double the share of international students at Oregon State, to 10 percent, by 2014.
In general, the partnerships bring greater complexity and comprehensiveness to international-student recruitment and education. The participating companies become partners not just in the business component of the programs, but also in their aca-demic aspects.
The Into model, in particular, is notable for its ambitious, long-term relationships. The parties sign 35-year agreements.
David Stremba, Into’s managing director for the Asia Pacific region, says the company . which is negotiating with two unidentified U.S. colleges . hopes to build a network of 25 university partners around the world. The network may also smooth the way for student exchanges and joint research among faculty members who have shared interests.
It’s those aspirations that have alarmed many faculty members, who worry that these programs are one more intrusion of the for-profit motive into academe.
“We shouldn’t just be looking at international students with dollar signs in our eyes,” says Ms. Austin-Smith, faculty-association president at Manitoba, where the first students under the partnership arrive this month.
Too Close for Comfort
Negotiations with corporate providers have sparked bitter protests at Manitoba and in Britain, where the main national faculty and staff association, the University and College Union, has made heading off such agreements one of its chief priorities.
On its Web site, the union regularly posts news about the latest universities in talks with private companies . about a half-dozen are rumored to be in the works . and about the few that have taken a pass on such deals.
Jonathan White, the association’s deputy head of campaigns, says members are concerned that corporate partnerships could swallow up existing English-language programs and their instructors.
Although the Oregon State agreement specifies that current language-staff members will remain university employees, at other colleges both current instructors and those hired to handle the expanding workload have become employees of the joint venture or of the private company, which, Mr. White says, often pays them less and provides fewer benefits than the colleges would. (Into says that is not true.)
Faculty and staff opposition, however, has ebbed on some campuses where partnerships have been established.
At Oregon State, English-program employees are discomfited by the “uncertainty,” says Ms. Averill, director of the English Language Institute, but have begun working on curriculum for the new program.
At Simon Fraser University, in British Columbia, faculty opposition delayed an agreement between the university and Navitas. But faculty members from several departments have worked to set the curriculum for the pathways program and are monitoring its instruction.
Tom Grieve, an associate professor and chairman of the English department, said he and many of his colleagues decided that it was better to have a say in crafting and overseeing the course work. “One of the things that sold us, as a department,” he says, “is that at least there’s a mechanism for quality control.”
With just three semesters’ worth of students transferring into Simon Fraser thus far, Mr. Grieve and other faculty members there say they are reserving judgment on the program, which is expected to enroll 1,000 international students within five years. “When we get the hard data,” he says, “is when the rubber hits the road.”
Mr. White, of Britain’s University and College Union, is among those who worry that aggressive enrollment goals and revenue targets could encourage pathways programs to promote, and universities to accept, unprepared students.
At Simon Fraser, where Navitas pays in rent about a third of the tuition it collects, the university will earn $8.75-million (U.S.) once the program reaches its full capacity, of 2,000 students.
“Because of the pressure to turn a quick profit, these partnerships are under a self-imposed pressure to bring in greater numbers of international students,” Mr. White says.
Both the private providers and their university partners say they have little to gain by promoting unqualified students. That could hurt the companies’ reputation with future partners, while universities would lose revenue if students abandon their studies.
But the issue has flared up in Australia, where a study last year by Monash University found that one-third of foreign students who obtained permanent-residence visas after graduating in the 2005-6 academic year could not demonstrate that they were competent in English on standard immigration tests.
Although the study did not suggest problems with established companies like Navitas, says Dennis Murray, executive director of the International Education Association of Australia, the report encouraged greater scrutiny. Educators are working with the national quality-assurance agency in higher education to put in place a way to evaluate pathways programs. “It’s still a very live issue here,” he says.
That debate is growing livelier in the United States as well.
Although pathways programs are unlikely to take off here in the way they have done abroad, executives of Navitas and other private providers say they are assessing the American market.
Part of the challenge, says Mr. Jones, the Navitas CEO, is finding the appropriate partners in a marketplace that’s far more vast and differentiated than in Australia and Britain.
“I think there’s a huge opportunity in the U.S.,” he says. “But we want to do our research, and we want to be thoughtful.”
For Oregon State, where state-budget woes have limited international recruiting, a deal with a deep-pockets partner seemed the only way to get foreign-enrollment numbers up.
“If this partnership was a way to make that happen,” says Mr. Randhawa, the provost, “we’re comfortable taking that chance.”
Volume 55, Issue 2, Page A41