In recent months there has been triumphant messaging on LinkedIn from Shorelight’s Tom Dretler claiming that the business “brought more international students to the US” than anybody else in fall 2023. It was queried by Andrew Colin of INTO University Partnerships with the riposte “Are you sure?” to which Tom posted a thumbs up sign. Probably better than the middle finger emoji but as neither of them would be able to definitively prove the point we are probably none the wiser.
What is clear is that Shorelight, having overtaken INTO for pathway partnerships within three years of springing into existence, has also significantly outstripped the erstwhile US market leader in terms of direct recruitment options. But as the US comes back to life after a tough and long pandemic it is interesting to watch the maneuvering of other players. There is no doubt that there are probably hundreds of US universities who would like to get on the gravy train of southeast Asia enrollment opportunities so we should expect a glut of wannabe global student recruitment options emerging.
Enter Study Group, whose approach to the US has been akin to a slightly the worse for wear dad doing the Hokey Pokey1 on new year’s eve. The gyrations of the past few years are a painful reminder that a business that could once claim to be among the world leaders as a private provider of recruitment services to universities seems to be struggling for identity, a sense of direction and worst of all hard cash. Having abdicated to Navitas in Australia by selling all of its holdings and now facing a UK Tory Government lining up post-graduate work as the Christmas sacrifice to right-wing rebellion, it seems to have turned attention across the Atlantic.
The announcement of three new direct recruitment partners may look like a decisive step but you have to wonder whether this represents a strategic drive for market share or a gambler’s final throw. A quick look at the recent international student enrollment record and a few facts about each university might suggest that we are at the stage of the evening where subdued lighting and sufficient refreshment has brought lonely souls together. Maybe inspiration on the partnerships has been drawn from the mighty Bruce Springsteen’s suggestion that “Show a little faith, there’s magic in the night, You ain’t a beauty, but hey, you’re alright.”2
Shake It All About
Between 2019 and 2021 Study Group ended relationships with seven US universities and, as recently reported, has seen Baylor University depart the fold in 2023. Some of the relationships had been in place as long ago as 2008 but there was a burst of activity with new partners in 2013 and 2014 after the purchase of Study Group from Champ Private Equity by Providence Equity Partners for a reported £388.3m in 2010. Of the four partners added at that point only one remains.
By 2017 Study Group was on the block again. It seem entirely possible that the addition of seven new partners between 2016 and 2018 was driven as much by the desire to show momentum as long-term strategic planning. Four of the seven are no longer partners. Current major backer Ardian bought the business in 2019 without the terms of trade being made public but at a point when the decline in US international pathway businesses was already evident.
Timing is everything and nobody could have predicted the pandemic to come, so Ardian have been obliged to put up with some even more difficult times. Between February 2021 and March 2023 they tipped a further £77m into the business according to Study Group’s Annual Report and Financial Statements. Despite that in the year ended 2022 Study Group posted a decline in new student enrollments of 22% from 8,050 to 6,244 year on year and lost a top university brand, Lancaster University, to INTO in 2023.
A more detailed review of the underlying issues at long-term partner James Madison University shows the problems that Study Group may still have in holding on to its pathway business. In that context it seems possible that new partner universities, whatever their merits, will be welcome if Ardian are considering how best to extract themselves from an investment which seems unlikely to have satisfied expectations, in a sector that is in significant turmoil. Getting out of Australia just as the tide seems to be turning looked a curious decision but the growing risks in the UK must be leaving many senior people with sleepless nights.
Maybe this is the moment that a major (and often discussed) reunion bringing Andrew Colin’s two creations – Study Group and INTO University Partnerships – together might provide the critical mass and overhead savings to compete effectively while balancing risk around the globe. The merits of merging two businesses that have struggled to make headway in recent years, and where one is embroiled in legal dispute with a major US university, might be questionable. Perhaps CEG should be thrown in the mix to complete a trifecta.
Shake It All About
The three new partners are University of Nebraska – Omaha, CSU San Marcos and Townson University in Maryland. Study Group is putting its brand in at points north, east and west with a group of institutions that might be described as eclectic. One thing that connects them looks to be slow progress in recovering international student numbers quickly after the pandemic.
University of Nebraska – Omaha positions itself as “Nebraska’s Metropolitan University”.. “dedicated to the city and state in our name.” It’s international enrollment since 2019 has followed a broad pattern of decline in undergraduate numbers but an encouraging uptick in graduate students since 2020. One would guess that the relatively low tuition fee of $22,358 and value for money housing costs could also be an attraction.
On the other hand, Nebraska might be a tough sell as a location and it’s worth noting that the University of Nebraska – Lincoln is the dominant international student recruiter in the state. It claims the “lowest tuition in the Big Ten” at $28,792 and looks in a good position to dominate competitively.
Warren Buffett, the “Sage” of Omaha, is among the more famous residents of Nebraska. With a presidential election in 2024 and possible uncertainties that might bring it is difficult not to think of his dictum, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” Given Study Group’s US record that might be worth thinking about.
Source: University of Nebraska – Omaha Office of Institutional Effectiveness
Those who think of California as an ideal location for international student recruitment need to remember that the performance of the big players is not always replicable. For every University of Southern California (15,729 international students in 2022 according to Open Doors) there is a, um, CSU San Marcos (CSUSM). The international new student enrollment at CSUSM was never particularly high and appears to have been in serious decline for four years with little joy even in graduate recruitment.
Tuition and fees at CSUSM look reasonable at $18,160 for UG rising to c$22,000 for most Graduate degress but room and board costs are less so.
Source: CSU San Marcos Office of Institutional Planning and Analysis
One the east coast Towson University has a new President in Mark Ginsberg and was embroiled in a controversy earlier this year for allegedly “creating programs that already exist at historically Black colleges and universities.” It later withdrew the program. It bills itself as a “…nationally recognized leader in inclusive excellence.”
With undergraduate fees of around $28,000 a year it is the most expensive of the three but presumably the location offers some relief from the sunshine of southern California and the seasonal extremes of Nebraska. It’s non-resident student fall enrollment has been lackluster for several years with graduate numbers creeping up only slowly.
Source: Towson University Office of Institutional Research
You Put Your Whole Self In
Good strategy requires long-term commitment, intense focus and a relentless drive to implement effectively even as circumstances change. If this is Study Group’s new direction they will need to move very quickly to build their portfolio and execute enrollment against some entrenched opposition. It may be, however, that the sale of the Australian portfolio and the saturation of the UK market has reduced options to the point where it is the only game left to play.
NOTES
- The Hokey Pokey is an Americanization of the Hokey Cokey which reached peak popularity in the UK in the 1940s. The peak of popularity in the US is claimed to be the 1950s. Perhaps Study Group intend to revitalize it…
- The line is from what is, in my view, The Boss’s greatest song “Thunder Road”. Written in 1975 it was the first song on breakthrough album Born to Run. Apparently he played it as first song when he first played in the UK in November 1975.
Image by OpenClipart-Vectors from Pixabay