Things seem to be moving fast as the big pathway players realise that winter is coming, both physically and metaphorically, to their US operations. Hot on the heels of the recent Study Group closures there are strong rumors of Navitas reviewing its US partnerships and cutting staff. Shorelight has also taken action through changes to its senior management team and staff lay-offs in the past month.
The Navitas partner changes are still at the point of speculation and no brand names have been removed from the list of partners as of today. But the ‘Search Navitas programs’ area of the website turns up no results for Virginia Commonwealth University, Richard Bland College or University of Idaho. Searches for University of New Hampshire courses lead to a broken ‘this page isn’t working’ link.* By contrast the Florida Atlantic University pages, UMass and Queen’s College pages seem fine, as do the Canadian university partner links.
Dr Brian Stevenson took up the reins as CEO and President of Navitas’ University Partnerships North America division at the start of this year. With his strong links to Canada it’s possible that there is a major shift of emphasis that would reflect the continuing popularity of Canada as a student destination. There certainly seems little prospect of any but the best or most market-oriented US universities being a profitable proposition in the near future.
In October InsideHigherEd noted the decline in Chinese student enrollments and its potential impact on US universities but the next news might be about the changing preferences of students from India. 2019 saw the UK have a 42% year on year increase in visas issued to Indian students and there is every sign that the coming year will see similar growth. With changes in post-study work visas coming into effect for 2020 enrollments universities and pathways are already reporting substantial interest.
Back in 2014 Karan Khemka, then a partner with the Parthenon Group, said: “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.” That was one of the drivers for over $1bn of private investment being made in pathways.
The reality is that, with CEG and EC leaving the market, Study Group cutting back and Navitas now looking hard at its options, the past 18 months has seen a decrease of well over 10% in the number of US pathways. By contrast the UK and European pathway market continues to grow and Australia has just loosened its post-study visa regime a little further. It seems likely that this is the prevailing direction of travel for the foreseeable future.
*Searches undertaken on 30 October 2019. As with all commentary in this blog any authoritative comments or corrections are welcome and will be recorded.
Whenever I come to the UK I think of the album Atlantic Crossing despite it being one of Rod Stewart’s less worthy offerings. It’s mainly notable for the song Sailing which was recorded at Muscle Shoals at 10.30am while Stewart was, unusually for the time, singing, stone cold sober. He didn’t want it released as a single, but it became the theme song to a ten-week BBC Series about the aircraft carrier HMS Ark Royal and his best-selling UK release.
The song
was originally by the Sutherland Brothers, two folk-music playing brothers, whose
lyrical genius is shown by the fact that the second verse of a song entitled
Sailing contains the lines, ‘I am flying, like a bird, across the sky’. They later combined with rock group Quiver to
tour and record the undemanding pop song ‘Arms of Mary’. Quiver’s other claim to fame is that they
were the first band to play the legendary Rainbow Theatre in London.
So, a song
with a misleading title, by a folk/rock combo, sung by a sober Scottish singer
and on the album under protest becomes famous because of an aircraft carrier. It may not be the strangest tale in the
history of music, but it is as whimsical as some of the experiences of an
itinerant Englishman. And Atlantic
Crossing was Rod’s first effort to make his mark after moving to the US so I
feel a certain empathy.
My latest
sojourn to England has been enjoyable as ever but has shown that I am rapidly
becoming out of touch with the ways of the Angles. It’s not that I have totally forgotten
everything that was handed down by my forebears, but I have found myself doing
things that only a tourist does. It’s very
unnerving but a reminder that I am visiting rather than coming home.
I have forgotten
how to cross the road without endangering myself and every driver in the
area. I keep looking the wrong way and
stepping out full of confidence that nothing is going to hit me. After a few tries I have found that the only
way to be safe is to approach the road with my head swivelling like an owl in a
barn full of field mice.
After
eating I keep asking for the check (and yes in America it is a check even when
it is a cheque). Restaurant staff are
too polite to ask me if I am just being ironically trans-Atlantic or just
influenced by too many shandies. I usually
blush and stammer, ‘oops sorry, I meant bill, but I live in San Diego now….’,
before trailing off under a stare that suggests they really don’t care.
Arriving
without an umbrella was also not my best idea.
I had forgotten how much it rains in England and how, even when it is
not raining hard there is a misty, spitting sort of precipitation that leaves
you damp. All of this not helped by the
reality that older English hotels are delightful but not endowed with ways to
get warm or dry.
The good
thing about the weather is that I have been freed to have more baths in seven
days than I have in the last seven months.
At first, I was timid because I had got used to a shower routine that is
vital in a place where it doesn’t rain for nine months of the year and the
water bill makes H2O seem more valuable than gold. Once I got over my culture shock, I plunged
into a routine of baths both morning and night and have every intention of
squeezing in three during the last 18 hours before the plane.
I have lost
the ability to deal in the coins of the realm and had an uncomfortable moment
in the supermarket where I kept trying to feed the automatic checkout with a
fifty pence piece that wouldn’t work.
The shop assistant who came to my assistance was surprised enough to
blurt out loud that her grandfather had “some of those antique coins” in his collection. I reverted to paying for everything with
notes to save time and embarrassment but am left with a bag of metal for the
charity collection on the plane.
It has been
lovely to hear people speaking in accents and tones that are as redolent of my
youth as Manchester United getting relegated to the old second division. Both these features have mixed memories
because for every Norfolk burr there is an estuary sentence full of glottal
stops, dropped aitches and foul language.
And for every memory of the glorious recovery under Docherty and onwards
to Ferguson there is the sadness of watching incompetent management buy Ian Ure
from Arsenal, who became my constant nemesis as the worst player in United’s
history.
Difficult
to get this far without mentioning Brexit.
Truth is that it is difficult to know what to say and this is not the
place for a political rant about the ineptness of a referendum for such a
significant change to be based on a 50/50 vote.
Neither is it helpful for someone with their interests in another part
of the world to question the right of a minority government to drive
legislation that will change the future for millions.
Almost everyone I have spoken to has been sad but resigned to leaving the European Union. Some of the Scottish and Northern Irish seem steely eyed about taking a new opportunity for statehood, independence or realignment that places them back in the European fold. The Brexiteers, my favored name for the ‘Leavers’, continue to sound like a raddled, sulky, deceitful, agit-pop band, but seem uncertain about the “sunlit uplands” that await and even less sure about the veracity and quality of the politicians leading them.
Next time I return I believe it will be to a nation that is making its own way in the world. That was how it was when it became the land of the ‘mother of parliaments’, the lone defender against fascism and the leader of cultural and technical innovations that continue to influence creative enterprises around the world. My fingers are crossed that its future allows it to rediscover its courtesy and civility, be a beacon to the ambitious and the oppressed and, above all, a place to be proud of.
Getting contemporaneous data and sales targets from privately
held pathway providers is unusual. But
in a July 2019 podcast
interview, Sean Grant, Chief Recruitment
Officer of Shorelight Education, tells us that Shorelight recruited 3,000
students “last year” (presumably 2018/19) and are forecasting to recruit ”4,000
students plus this year.” Grant notes
that the 3,000 student figure for 2018/19 represented year-over-year growth of
35%, which suggests Shorelight recruited approximately 2,200 students in
2017/18.
It was equally enlightening to hear that the company continues
to invest heavily in building its sales function. Grant noted that Shorelight’s
US-based onshore recruitment team grew from five people to 28 in “about six weeks”
last year. While staff growth of this magnitude and pace is prodigious by most measures,
it may be the norm for a company that considers itself “the Amazon or the Google
of the…international education sector.”
Because Shorelight is a private company based in the US, it
has largely been able to maintain confidentiality around its economic
performance (unlike UK-based competitors, who are required to publicly disclose
annual financials). The Shorelight website shows 17 current
university partners, and a press
release announced their partnership with Cleveland State for fall 2019
recruitment, bringing the total to 18.
Grant referenced 19 partners in his interview, so it’s just possible we
may have had early notice of a new partner joining the portfolio.
Shorelight is now in its seventh year of operation since its mid-2013 inception. With the disclosure of recruitment numbers and the indication that the business continues to invest heavily in sales staffing, it’s worth drilling down to look at how the six public universities that signed early on with Shorelight are doing*.
Louisiana State University
Shorelight began recruiting for LSU in 2015 and since then
the university’s total enrollment of non-resident aliens have fallen from 1704
in fall 2015 to 1599 in fall 2019 according to the Geographical
Origin of Students spreadsheet.
Table 1 – Total Fall Enrollment of Non-Resident Aliens at Louisiana State University
Souce: LSU Fall Facts and Interactive Dashboard
In the form contract between LSU and Shorelight, publicly
disclosed by the State of Louisiana, the articulated enrollment goal for
the International Accelerator Program, i.e., the pathway, is 850
students in the ’fifth Academic Year of the IAP” (2020/21). Inside Higher Ed reported that in spring 2018 “there were just 136 students
enrolled,” and market
rumors suggest that recruitment remains a long way short of target. The absence
of overall international enrollment growth at LSU suggests that neither pathway
or direct recruitment are going to plan.
University of Kansas
There is a similar story at the University of Kansas where
the fifteen-year contract with Shorelight came under
fire from academics at the time it was signed in 2014. Sarah Rosen, then Vice Provost for Academic Affairs at
KU (who has since moved to Georgia State), was reported to have articulated enrollment
aspirations of about
600 in two or three years. As Shorelight sought
and won an injunction preventing the release of the
contract, no further insight into the parties’ ambitions are available. As KU’s total fall enrollment of non-resident
aliens (termed international in the Factbook) has decreased during the relevant
period, it seems likely that this aspiration was not met.
Table 2 – Fall Enrollment of Internationals at University of Kansas
Auburn signed with Shorelight in 2015. The university’s online, interactive Factbook offers the option to filter enrollments by on-campus, “Primary Major” which includes the various “Auburn Global” programs offered in partnership with Shorelight. Enrollments rose substantially between 2015 and 2016 but have been in steady decline since. Overall, enrollments are largely undergraduate and Chinese.
Table 3 – Fall Enrolment to Auburn Global Courses at Auburn University
At the university level, the impact of the trends within
Auburn Global are clear: total international student enrollment has grown from
1639 in 2015 to 3034 in 2019, with the percentage of Chinese students going
from 46% to 62% during this same time. Obviously, the financial impact of 1400
additional students is material; however, the risk associated with such a large
proportion of students from a single source country, especially in the current
political climate, is palpable.
University of South Carolina
The Fall 2018 International Student Enrollment Report from USC captures the five-year picture on the university’s international recruitment. The International Accelerator Program (IAP) has helped push undergraduate numbers forward but its growth appears to have stalled. Of the total international enrollment for the university 40% of students are from China.
Table 5 – International Student Fall Enrollment – University of South Carolina
Source: USC Fall 2018 International Student Enrollment
Report
Florida International University and University of
Central Florida
Both of Shorelight’s Florida partners have seen strong growth in overall international enrollments. As a comparator, the University of South Florida, an INTO partner, saw total international enrollments grow by around 1500 between 2015 and 2018. This may reflect both the popularity of Florida as a destination for international students and that the three universities have lower fees than the others reviewed.
Table 6 – International Fall Enrollments at UCF and FIU
Source: Factbooks of Florida International University and Central Florida University
Summary
Some crude metrics emerge from the forecasted recruitment
outcomes mentioned in the podcast. If
Shorelight indeed recruits 4,000 students this year, the average number of
students recruited by each member of the 145-person sales team this year will
be 28, and the average number of recruited students per partner (assuming 18
partners) will be 222. Seasoned recruitment
professionals will have views on how that ratio stacks up in terms of
performance.
There will also be opinion on what the drive for 35% growth might mean in terms of cost of acquisition for US-bound students. As Inside Higher Ed reported in June 2018, promotional bonuses were already pushing agent compensation ”well north of the 15 percent threshold,” and it seems unlikely that this cost will have fallen. With the UK resurgent after reintroducing two year post-study work visas competition just got even tougher.
The closure of partnerships by Study Group, CEG and EC has provided insights into how difficult the US pathway business has become. The experience of the partners reviewed here suggest that, regardless of ranking, success can be elusive and only time will tell whether Shorelight’s strategy is a winner. Investment and targets are one thing, but brute market realities are quite another.
*University reporting formats are not wholly consistent. Extensive efforts have been made to verify data used and sources are given for reference. Authoritative comments or corrections are welcome.
