intled – Page 11 – View From A Bridge – management, education and personal thoughts

Open Doors and Outliers – Looking For Rubies in a Mountain of Rocks

Open Doors data, published by the Institute of International Education (IIE) on 13 November, confirms the much-anticipated decline in international student enrollments in the US. But delving into the detail demonstrates that there are also outliers with significant growth in international students year on year. It is always interesting to dig down to see who is bucking the trend – but more importantly how they are doing it.

At the headline level there is unmitigated gloom with the total number of enrolled international students in 2017/18 down by 11,797 (1.3%) on the prior year. There are also signs of a fractured pipeline for Fall 2018 with non-degree student starters down 9.7% year on year (4,868 students) and down 23.8% (14,135 students) from the 2014/15 peak. Since a 2015/16 high-point undergraduate and postgraduate new-enrollments are down by 9% (10,723) and 6.8% (8,556) respectively.

Table 1 – New International Student Enrollment in the US 2007-08 to 2016-17
Source: Open Doors Report on International Educational Exchange. Retrieved from http://www.iie.org/opendoors

Against that background the state of Kentucky was eye-catching for two reasons. It posted a 26.9% increase in international students – an exceptional performance for a state that was, in 2016/17, 31st in overall popularity in terms of volume of students enrolled. Within the state Campbellsville University was the only one of the top five (by volume enrollments) to grow and became the leading recruiter with a year on year increase of nearly 2800 students.

Table 2 – Year on Year Change in Foreign Students in Kentucky (Source: Open Doors Fact Sheets 2017 and 2018)
IPEDS data shows that across all domestic and international, full and part-time enrollments Campbellsville grew by 96% year on year to Fall 2017. A time series shows that growth at the institution accelerated very significantly in the past year. Graduate part-time has been the primary engine of growth with graduate full-time and undergraduate part-time also contributing.

Table 3 – Campbellsville University Total Graduate and Undergraduate Enrollments 2014-2017
NB: 2017 data is listed as Provisional Release data by IPEDS

International student enrollments (as per non-resident aliens in IPEDS reporting) have been the driving force for the significant growth over the past year. Full-time international graduates grew by more than 600 year on year and part-time international graduates by over 1700.

Table 4 – Campbellsville Full and Part Time Graduate Enrollments
The graduate growth appears to be almost entirely driven by students from India. In 2016 Open Doors reported the proportion of students from China and India in Kentucky as being equal at 18.9% of the total. By 2017 students from India leapt to 43.1% of the total as China fell to 13.1%.

This is supported by the Quartz news website which published, in May 2018, an article reviewing the courses offered by Campbellsville and another Kentucky-based institution, the University of the Cumberlands . The article quotes Shanon Garrison, the vice president for enrollment services at the University of Campbellsville, as saying that “99% of the students in the course are native to India but live in and work for companies based in the US.” Most students are enrolled in the Masters of Science in Information Technology and Management (MSITM). which, according to Quartz, is ‘designed to allow international students to work full-time jobs while enrolled.’.

The report suggests that students are required to attend the campus for three days of face-to-face classes at the beginning of each term and that the degree costs around $17,000. Flexibility, affordability and the opportunity to work appear to be key factors in the popularity of the course. It is a powerful combination which appears to have turbo-charged growth at Campbellsville.

International recruitment has always been a space where intelligent minds consider ways to develop creative programming that works productively within the legal, visa and competitive environment. Large institutions can often be relatively slow in adapting to new circumstances or may rely on their reputations to see them through the bad times. Innovation and boldness are usually the hallmarks of smaller, more nimble institutions and their successes are often worth considering.

The purpose of looking more closely at the University of Campbellsville is to illustrate possibilities and is not intended to advocate for or against the model. The Quartz article outlines some of the potential challenges and it is not unusual for innovation to appear in specific niches that are inaccessible or out of scope for other institutions. But at a difficult time for US international student recruitment it’s interesting to see opportunities that are still being discovered and exploited.

FRESH HOPE OR ZOMBIE DAWN AS CLEARING FOG LIFTS?

Day 28 sounds like a bid for the latest in the zombie movie franchise but its the UCAS yearly data-release marking four weeks from A-level results day. For some UK universities the former might feel appropriate because the clearing season is nearly over and visa deadlines are coming. It’s not long before all that is left is the counting of enrolments.

This year Day 28 was 13 September with the data published a week later. These numbers give the best indication of how far the UK has come in enrolling new undergraduates for the 2018/19 academic year. It’s a mixed bag.

The good news that the number of ‘placed’ international students (non-EU) is up 4% to 38,330 – that’s 1,500 more than last year. It’s a solid gain although slightly disappointing after double-digit applicant growth in the early part of the cycle. It looks anaemic against the growth in Canada and Australia but is likely to be better than the US.

At a subject level the biggest winners are Business and Administrative Studies (+350), Computer Sciences (+310) and Biological Sciences (+240). However, the number of Engineering students is down by 230 and at its lowest level since 2012. The five-year growth in Technologies has also been reversed with a loss of 130 students taking it to its lowest ever total.

With 6,040 students international students still holding offers the eventual enrolment outcome remains uncertain. In 2015 the number holding offers on Day 28 was 6,380 but in the past two years had fallen to 1,760 (2016) and 1,610 (2017). It is difficult to understand what is driving this fluctuation and there may still be time for a late windfall. But the majority may just be phantoms preying on the minds of hard-pressed recruitment teams.

More good news is that EU-students ‘placed’ are also up by 2% to 30,350. This is still slightly below the number for 2016 but is some cause for encouragement. A number of universities, including De Montfort who opened an office in Portugal earlier in the year, are enhancing their physical presence in Europe. It will be interesting to see how these developments plays out with Brexit looming.

The bad news is that the total number of placed students after 28 days – counting all domiciles – is down by 10,000. At a standard UK home student fee rate that’s £277m of fee revenue over a three-year degree. Universities know that the home-student demographic dip will continue for a few years, which is one reason those that can have been building their student base. It seems to be one factor behind the growth in unconditional offers from well-ranked universities.

Table 1 – Total of All Placed Undergraduate Students 28 days After A-Level Results
Of course, undergraduate enrolments are not the only source of student income for universities and postgraduates make up the bulk of international enrolments. But it is also difficult to see why the postgraduate enrolment picture would be much of an improvement on that for undergraduates. And an enrolled undergraduate gives a near guarantee of three years income compared to the yearly challenge of recruiting more one year taught Masters students.

Against this background it was interesting to read Being set up to fail? The battle to save the UK’s Universities from speculative finance. The article, from May 2018, notes that ‘some £3bn has been borrowed by UK universities since 2016, over half of this in the form of private placements.’ Some of that borrowing may be based on predictions of student enrolments that look increasingly unsustainable.

This echoes WonkHE’s November 2016 report, Getting worse: HEFCE’s bleak prognosis for university finances. One recruitment related line from HEFCE was “Our financial modelling shows that removal of projected growth in overseas fee income over the next three years (2016-17 to 2018-19) would all but wipe out sector surpluses by 2018-19, with projected surpluses falling from £1,081 million (3.4 per cent of total income) to £56 million (just 0.2 per cent of total income).”

It is to be hoped that the early warning signs from HEFCE were heeded and that the long-term financial health of individual universities has been considered more carefully over ensuing years. My blog Getting To Grips With Pathways – A Thorny Subject? showed the decline in some university incomes that has already become evident as international enrolments fall. The UK demographics will not improve for several years and the battle for international students will not get any easier.

GLOBAL LEAGUE TABLES OFFER MIXED NEWS FOR THE US AND PATHWAY PROVIDERS

Credible and well publicised global comparative university rankings are one factor changing the face of international recruitment. Students and their advisers can compare and contrast between Beijing, Berlin, Boston and Birmingham at the touch of a button. The rapid growth of online courses from universities around the world has also helped to popularise the notion of ‘shopping’ for courses through the internet.

It is clear that league tables matter and that universities see them as an important part of student recruitment. Some less welcome consequences include misleading claims and recent incidents suggest that data submitted is not always accurate. Perhaps these incidents reflect the recognition that league tables can help build reputations that support both country and institutional desirability.

In that respect evidence suggests the US is losing its way as a global rankings leader with strength in depth. For pathway providers it’s a double-whammy when the quality of their US partnerships, as defined by global comparisons, looks to be lagging behind their partners in other parts of the world. At a difficult moment for US recruitment of international students it may be another indicator of harder times ahead.

US DECLINE IN GLOBAL RANKINGS
The US has traditionally been dominant at the top of global rankings and remains powerful. But The Economist (May 19th 2018) highlighted how its broader grip on the Academic Ranking of World Universities (ARWU) table has slipped over time. Chinese and Australian universities have seen the most significant growth in the table over that period.

Table 1 - Representation of Countries in ARWU TOP 500 - 2003 to 2017

The Times Higher Education (THE) World Rankings also noted that in 2018 ‘two-fifths of the US institutions in the top 200 (29 out of 62) have dropped places.’ In contrast, two Chinese universities had risen into the top 30 for the first time. This shift in global power reflects the growing power of China as a first choice for international students.

US PATHWAY PARTNERSHIPS BELOW TOP LEVEL
While many US universities are slipping in global rankings, pathway providers also seem to be struggling to secure partnerships with the very best universities in the country. Since April 2016 none of the partnerships announced by Study Group, Navitas, INTO or Shorelight has been in the top 200 in the QS Ranking or THE World rankings. Only two make it into the US News and World Report (USNWR) Global top 200.

Table 2 – Comparative Ranking of New US Pathway Partnerships Announced Since April 2016*National rank unless noted

Looking over the total portfolio of pathway partners of the ‘big 4’ providers in the US shows that more than half are not globally ranked by the QS, THE or, even in the US News and World Report Global Top 1000.

Table 3 – Global League Table Rankings of Pathway Provider Institutions in the US

UK PATHWAY PARTNERSHIPS LOOK STRONGER IN GLOBAL RANKINGS
Three of these providers are active in the UK where their portfolios look significantly stronger in terms of global rankings. With the addition of the fourth big player in the UK – Kaplan – the overall number of partners is similar. At an aggregate level the worst performance is in the USNWR ranking but even by that measure less than a third of partners are unranked.

The UK is a more mature market for pathways but the recent emphasis of the major players seems to be on enhancing quality. Kaplan partnered with the University of Nottingham in July 2016 and Study Group announced a deal with Durham University in February 2017. Kaplan and Navitas have established new-style arrangements, including investment in infrastructure, with long-term partners Liverpool and Swansea respectively. INTO’s last UK deal was with the University of Stirling in April 2014.

Table 4 - Comparative Global League Table Rankings of Pathway Provider Institutions in the UK

A GLOBAL LEAGUE TABLE FOR THE ERA OF THE CLICK
Some pathway groups also have strong representation in Australia (and to a lesser extent in Canada). A composite league tables to reflect this and show the ‘top 11’ pathway partner universities, according to three major global league tables, shows considerable consistency. Six universities (shaded) are in all the tables and five are in two. It is, however, worth noting that all but one have slipped lower in their placing between THE 2018 and THE 2019.

Table 5 - Top Pathway Partner Universities In Selected Global League Tables

NB: The University referred to in the table as Alabama is the University of Alabama – Birmingham.

CONCLUSION
Most people who work in the sector have seen the growth of league tables as an imposition with occasionally perverse consequences for investment and resource allocation in the institution. It is entirely possible to argue that that the rankings are arbitrary and spurious with no particular relevant to student outcomes. But they are increasingly offering new layers of insight to capture attention – the QS Graduate Employability Rankings is an example.

Students, parents, agents and employers look at league tables and most student recruitment marketing focuses on favourable rankings while ignoring less flattering indicators. They are far from the only factor involved in decision making but they set a tone that influences potential students and staff. It is rare to find an institutional leader who is not keenly aware of their relative performance.

In terms of international recruitment league tables are part of an institution’s ‘sales kit’ and the growth of global comparisons exposes their relative strengths and weaknesses. It is noticeable that as international student growth has stalled in the UK over the past five years the bigger and better ranked university ‘brands’ have taken a larger share of those coming to the country. It seems inevitable that this will be the story for the future and that universities without ranking ‘power’ will need to work harder to avoid being marginalised.

NOTE:

The exact nature of pathway provider and university partnerships is not always clear but extensive efforts have been made to focus on pathway partnerships where students are taught on-campus. The author is happy to hear from any authoritative source who has information that might improve the accuracy of the article. Any corrections will be noted below.

Correction and Update – 1 October 2018
The tables and commentary have been updated to reflect the publication of the THE Global Rankings 2019 during week commencing 24 September 2018 (comparative positions for individual universities are shown). Broadly speaking the new table showed declining rankings for both US and UK universities In addition, the tables have been corrected to show the rankings for Shorelight partner the University of Mississippi (Table 2) and INTO partner the University of Exeter (Table 5).

Understandable Caution About Students (UCAS) As Deadline Passes

The UCAS release of June deadline undergraduate applications is a snapshot giving insights into potential international (non-European Union) enrolments in the UK for September 2018. The scenario is a bit like England reaching the World Cup semi-final stage – enough to excite and build expectation. But we all know what happened next in that story.

News to cheer is that the number of applicants is up 4,550 from last year’s figure and 75,380 applicants looks like strong growth against last year’s 70,830. But underneath the headlines there are some interesting trends and nuances. It’s also worth bearing in mind that the UK’s compound annual growth rate for applicants is only 2.24% a year over the three years since 2014/15.

The other interesting factor may be the need of UK universities to fill the gap left by declining numbers of home student applicants – over 18,000 down year on year for 2018 entry. This seems certain to drive vigorous competition for existing international applicants. And the race to convert students in the last chance saloon of clearing will equal the stress levels of any penalty shootout.

MOMENTUM HAS SLOWED
A bird in the hand may be worth two in the bush as far as applications are concerned but early momentum in the recruitment cycle has fallen away. Year-on-year percentage growth of applicants has declined with each of the four UCAS deadlines. From a high in October of 11.7% it has fallen to a solid but less exciting 6.4% at the end of June.
Source: UCAS

This follows a broad trend in the growth in volume of international applicants applying between the January deadline and the June deadline slowing. In 2014/15 there were 18,510 additional applicants while in 2017/18 it has been 16,930. That’s growth of 35.6% and 29% respectively on the January total in each year.

It seems likely that students and agents are getting better organised earlier in the year. That would be a reasonable response to some of the changes in visa requirements and language testing in recent year. But it places an emphasis on speed of response to applications and the strengthening of conversion campaigns early in the cycle.
Source: UCAS

EARLY APPLICATIONS STRONG BUT MEDICINE LAGGING
Nearly 30% (1,350) of the total growth in international applicants came by the October deadline for students applying for Oxbridge or courses in medicine. However, the number applying for medical courses (3,310) remains below the 2014 figure of 3,490 despite the number of new medical places in recent years. It seems possible that competition is significantly undermining the attraction of UK medical courses and we know, for example, that as long ago as 2015 eighty per cent of Indian students in China were following undergraduate clinical medical courses (Source: The Economic Times, May 25, 2015).

The rise in non-medicine applicants is a strong step forward but the drivers are unclear. HESA figures suggest that between 2013/14 and 2016/17 both Oxford and Cambridge increase their total undergraduate population by 20% or more. It is possible that they are pushing on more aggressively and stimulating interest.

Alongside this is the growing flexibility of Russell Group universities, as evidenced by the number now making unconditional offers, and their hunger for international students. International students and their advisers may believe that their chances of successfully enrolling in a well-known, highly ranked UK university have never been better. At a macro-level the rise in early applications suggests that strong, well-ranked brands will do best out of any increase in applicants this year.

Source: UCAS

RELIANCE ON CHINA CONTINUES
Overall and as expected China and India have posted the largest uplift in terms of students applying – up by 1,850 and 1,100 year on year respectively. It seems possible that the UK is partly a beneficiary of what could become a very difficult enrolment period for universities in the US. In that respect the next biggest growth in international applicants is 300 from the USA.

Despite the good omens experienced international recruitment teams will not be counting their students before they arrive. The UK government’s failure to ease the visa situation for students from India by making the country ‘low risk’ could still play badly. But there must be reasonably strong expectations of a solid year for enrolments at this point.
Source: UCAS

CLEARING LIKELY TO REMAIN IMPORTANT
Another factor is clearing which includes all students applying after the June deadline. Over the past five years the peak number of international students ‘placed’ in universities in the 28 days after A-level day was 7,260 in 2014. This fell year on year before increasing slightly to 6,500 in 2017.

There are a lot of students available and most universities have strengthened their ability to operate efficiently at home and internationally under the pressure of clearing. Making on the spot offers, converting interest and having strong teams in place, including academics, are commonplace. Again, the well-known names would expect to dominate but as they fill there is opportunity for others to compete.

Source: UCAS

AN OPPORTUNITY FOR ALL – BUT REASONS TO BE CAUTIOUS
My previous blog showed that growth in international enrolments over the past five years has been dominated by metropolitan, Russell Group names. It is reasonable to assume that large, globally-ranked and well-known universities will now dive even more deeply into the pool of international students than ever before. The economic pressure and the likely shortfall in UK students over coming years will make this a priority.

And the wise will realise that the increase in their own applicant pool may be undermined by multiple applications. My analysis of the UCAS numbers suggests that while there are 4,550 additional applicants there are an additional 21,010 applications in the system. Over 3,600 of the additional applicants made the maximum of five applications and the majority of the rest made at least three.
Source: UCAS

US University Pathways – Build It And They Will Come?

In 2014 Karen Khemka, 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.” (Inside Higher Education, Bridge or Back Door? 30 April, 2014). With reports recently indicating that two leading providers in the US, Study Group and INTO, are for sale it’s a good moment to see what has happened.

Khemka’s statement came towards the tail end of a period when more than a billion dollars was invested in private pathway providers with the potential for pathway development in the US a strong incentive. But the next billion-dollar question facing potential investors may be whether US pathways were really a field of dreams where you could, to borrow loosely from the film, ‘build it and they will come’. Or has attention to the supply side of the equation ignored the challenges of changing patterns of demand around the world?

To size the growth in capacity in the US I took the NAFSA publication Landscape of Third-Party Pathway Partnerships in the United States (NAFSA, 2017) as a starting point. The publication identified eight providers who were partnering with 45 institutions on 1 April 2016. The criteria was that these partnerships had to be ‘contractual agreements between universities and third-party entities to provide English language courses along with academic credit.’

I revisited each of the third-party entities listed to determine what relationships they have added. It is reasonable to say that the wording of some media statements and the content of web-sites is, either by accident or design, unclear about the exact nature of the relationship or offering. However, Table 1 summarises my understanding of new partnerships that meet the original criteria and notes the dates they were announced.

Table 1 – New US Pathways of Eight Providers Announced 2016 to 2018

* Source: Landscape of Third-Party Pathway Partnerships in the United States (NAFSA, 2017)
**I can find no public announcement of the Shorelight partnership with Utah but it is reflected on the web-site of each organisation

Table 2 shows arrangements listed on the providers’ websites but which I have omitted. I am happy to accept any authoritative corrections in my understanding of the nature of the partnerships or courses provided and to add any partners I have missed. I have not gone beyond the original group of providers although a number of additional providers, such as EC Higher Education, have also developed pathway courses in recent years.

Table 2 – Partnerships listed on provider websites but not meeting criteria

The eight providers have added 21 new partnerships to the 45 shown in the original study – a growth of 47%. This suggests that the private providers have set about growing their businesses in the US with a good deal of vigour and some degree of success. At the time of Khemka’s quote in 2014 Shorelight was a new player but they have moved on to secure the most partnerships just four years later.

That growth in pathway capacity comes at a time when the global balance between supply and demand is in a state of flux and the future is somewhat less certain. The expanding availability of degrees taught in English and the ambitious targets of both traditional recruiting countries and emerging destinations has radically changed the competitive environment. While much of the world is adding rocket fuel to its recruiting engines the US looks to have loaded its unleaded petrol engine with diesel.

In the US a decline in non-degree new enrolments in 2015/16 was followed a year later by both graduate and undergraduate new enrolments declining. And non-degree enrolments continued to fall in 2016/17 which may be a leading edge indicator of further decline. The IEE Fall 2017 International Student Enrollment Hot Topics Survey says ‘Responding institutions report a 6.9 percent decline of international students enrolling for the first time at a U.S. institution, continuing the declines first seen in Fall 2016.’ (IEE, November 2017)

Table 3 – US New International Student Enrollment, 2006/07-2016/17
Source: Institute of International Education (2017). Open Doors Report on International Education Exchange. Retrieved from http://www.iee.org/opendoors

Like many sectors higher education is being obliged to rethink the fundamentals of supply and demand as demographics, competition and disruptive technologies undermine the old certainties. It is a challenging moment to be launching new initiatives and building capacity based on past performance.

NOTES AND CORRECTIONS

This post was updated on 24 September 2017 to include Lynn University as a Study Group partner announced in May 2017. Other related statistics have been updated. At the time of announcement it was billed as ‘is set to open in January’ – presumably 2018. As of the date of this correction the partner is billed on the Study Group site as ‘Launching Soon’.

UNIVERSITY PATHWAYS – INTO THE VALLEY

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

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

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

Table 1: Yearly Average Enrolments at INTO Centres

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

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

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

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

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

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

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

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

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

PATHWAY, DEAD END OR TIME FOR A U-TURN?

August 2018 will be the fifth anniversary of Shorelight’s first partner, Bath Spa University in the UK, being announced with suggestions that the university would ‘see its overseas intake swell to around 2,000 students over the next four years.’. The four years would run from 2015/16 to 2018/19.

It seemed a good moment to look at the pathway market and what happens when relationships don’t work out. This is partly because we may be entering a period where the pathway sector has matured and circumstances make it ripe for realignment. The stakes are high on all sides and the factors are particularly relevant to the UK and US where growth in pathways has been rapid and international student recruitment has been under substantial pressure.

As finances tighten university management is under more scrutiny and is likely to demand more in terms of targets and delivery from partners. The consequences of a failing pathway are becoming increasingly difficult to hide as direct recruitment gets harder. Providers have their own problems with unprecedented global pressures and ubiquitous competition. Some may be reaching a point where optimising their portfolio is more important than simply adding or maintaining capacity.

In the UK a number of institutions have been following the University of Sheffield to see how the switch from one major private provider to another might work. Loyalties are under pressure as university leaders who signed the deal move on and some pathway providers look to change hands after the glut of private equity investment from 2010 to 2014. Pressure to perform has never been greater.

So, when a pathway becomes a dead-end there is every incentive for one or other party to make a U-turn. Or, as Warren Buffett is quoted as saying, “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be a more productive than energy devoted to patching leaks.” And it doesn’t really matter if it’s a long-term contract (where remedies for under-performance are usually written in) or time for a tender after five years.

IT HASN’T ALWAYS ENDED WELL IN THE PAST
There is, of course, precedent and although closures can be hard to trace I have listed below those that I have uncovered in my research. New partnerships are usually heralded with a fanfare and people smiling as they shake hands on a deal done. Unsurprisingly, a veil is drawn over partnerships that end and those that are public are usually dressed in anodyne media responses.

For both universities and providers that is unfortunate. Considering and addressing failure is a good way of learning and often more informative than the bright, shiny case studies which are so popular as sales tools. In my time with two leading universities with private providers and as COO and CEO with two providers I saw many factors that can make or break a partnership. These are worth sharing.

I make no comment on the reasons for the ending of the relationships noted (but have referenced reports where available). Neither do I claim that this list is exhaustive and I would be interested in any other examples. For organisations contemplating partnerships an open and honest discussion with those who have tried and moved on is probably worth as much as hours of expensive contract development.

Study Group
i) Stirling University (Opened 2007- Closed 2013) Source: QAA

INTO
i) University of East Anglia London (2010-2014) Source: THE) ii) University of Stirling London (Opened 2014 – Closed 2015?) iii) St George’s University (Opened 2012 – closed 2017 Source: St George’s University Annual Report

Oxford International
i) Canterbury Christchurch (Opened 2015 – closed 2017?)

Kaplan
i) University of Utah (Opened 2010 – Closed?) ii)University of Sheffield (Opened 2006 – Closed 2015)

Navitas
i) Western Kentucky University (Opened 2010 – Closed 2016)
ii) Edinburgh Napier (Opened 2011 – due to close 2018)

PRIVATE PATHWAYS MAY NOT BE ACCESSIBLE OR GUARANTEE SUCCESS
UK universities with the greatest decline in overall international enrolments in the past five years often have no pathway partner or are relatively late to the party. Several of the non-aligned universities here have been actively seeking providers but there is, inevitably, caution from providers about taking on institutions that do not have underlying strength.

It remains to be seen whether some of the new partnerships can materially alter the trajectory of underperforming universities. Sector sources suggest that Oxford International and the University of Bedfordshire are parting company and the provider is not currently listing this university on its website.

Table 1 – UK Universities With Greatest Decline In International Enrolments 2012/13 to 2016/17

Source: HESA (enrolments), QAA and University/Company websites

And that brings me full circle to Bath Spa and Shorelight. HESA data (supported by the University’s Annual Report narrative) showed strong growth in international recruitment from 2012/13 to 2014/15. In the first full year of the partnership with Shorelight (2015/16) there was a weakening of growth which was followed by declining international enrolments in 2016/17. There is some way to go for the university to reach the anticipated 2,000 by 2018/19.

Table 2 – Bath Spa University International Enrolments 2012-13 to 2016/17

Source: HESA

Perhaps more troubling is that in December 2017 the THE reported that ‘figures available on (sic) Companies House show that Bath Spa Global – an international pathway college venture set up in 2014 in partnership with US firm Shorelight Education – has lost about £1.4 million in the three years to July 2016, while its parent company Bath Spa U has lost about £736,000 over the same period.’. The 2016/17 Financial Statement from Bath Spa showed international student income and numbers declining year on year and noted that the joint venture partnership, Bath Spa Global, ‘remains fragile’. At the time of writing I can find no mention of Bath Spa University on Shorelight’s web-site and no current reference to Shorelight on the University’s site.

Winning And Losing In Global Recruitment

A lot is written about ‘winners’ and ‘losers’ in the race for international students. Putting some edges on that brings some surprises in terms of scale and the institutions in each camp. Between 2012/13 and 2016/17 the biggest eleven gainers in the UK ‘gained’ nearly 20,000 more international students while the eleven largest losers ‘lost’ approaching 19,000 students.

The outcomes show that mid-ranking, non-metropolitan, and less well-known universities can compete at the top table. It is also clear that being part of an exclusive clique of universities is not, on its own, enough. Good case studies abound for anyone wanting to grow enrolments in challenging times.

These conclusions are drawn from the Higher Education Statistics Agency (HESA) data showing international (non-UK or Other European) students enrolled by institution between 2012/13 and 2016/17. It’s a public record, self-reported by universities, and is widely used so it is one way of keeping score. I reflect on some of the complexities in notes at the end of the blog (and look forward to any corrections or challenges). When I worked for universities the time honoured response from planning offices to questions about student numbers was ‘how many would you like us to have’!

To give context HESA reported non-European enrolments between 2012/13 and 2016/17 growing from 299,490 students to 307,540 with a high point of 312,010 in 2014/15 (https://www.hesa.ac.uk/data-and-analysis/sfr247/figure-8). This is a total for all levels, years and modes of study.

WINNERS ARE NOT ALWAYS AS EXPECTED
Unsurprisingly large, well-established, metropolitan universities with strong rankings are well represented in the top eleven gainers. I was told that when one Russell Group university began to consider its brand management its proud response to questions about key selling points was ‘we’re big and we’re old’. For some that may still be enough but they are far from the only winners.

At number eleven, De Montfort University (DMU) has shown that clear strategic direction, strong engagement at senior levels and powerful execution can make a substantial difference. As CEO of their pathway partner, Oxford International Education Group, I saw at close hand the strong commitment to internationalisation and collaborative working. Their overall success reflects the drive of James Gardner, Pro Vice-Chancellor for International and Ben Browne, COO, under the leadership of Vice Chancellor, Prof Dominic Shellard.

Their partnership with Oxford International, established in 2013, has also played a part with integrated degrees and 94% progression rates in 2015-16 (QAA Educational Oversight, March 2017) boosting enrolments. A good lesson for any university with a private provider as partner is to be found in the strength of working relationships between Oxford International’s founder, David Brown, and former-Director of Global Sales, David Anthonisz, and senior university figures, including Gerard Moran, Director of Academic Partnerships.

Table 1 – Top Eleven Changes in International Enrolment by Headcount 2012-13 to 2016-17
Source: HESA tables 2012/13 to 2016/17 (see notes at end of blog)

BUT ABSOLUTE VOLUME IS NOT THE ONLY GAME IN TOWN
One would expect some of the biggest players to rack up the largest volume growth. But significant gains can also be made by universities with more modest starting points. The top five in terms of percentage growth over the period (with at least 2,000 international students in 2016/17) is a different way of considering potential. Table 2 has representation from England, Wales, Scotland and Northern Ireland and demonstrate that major English cities are not the be all and end all.

Table 2: Top Five By Percentage Growth of International Students – 2012/13 to 2016/17 (with total student volume over 2,000 in 2016/17)

Source: HESA tables 2012/13 to 2016/17 (see notes at end of blog)

The performance of Queen’s under the guidance of James O’Kane, Registrar and COO, and Isabel Jennings, Director of Marketing, Recruitment, Communications and Internationalisation, has been outstanding. I worked alongside them to develop an international enrolment strategy from 2011 to early 2013 and again as COO at pathway partner, INTO, in 2015. There were significant challenges to overcome in terms of location, reputation, data, programs and processes but these results show the potential for a focused, well-executed, long-term strategy to pay dividends.

This chart does not include some smaller institutions with growth stories. Falmouth University grew from 125 to 280 and the University of the West of Scotland by a startling 164.5% (405 to 1055) over the period. Cumbria, Newman, York St John, University of the Arts London, Birmingham City, London South Bank, Westminster, and Brighton – all ranked below 100 in the 2018 Times league table – have also added students over the five years. Each will have a different strategy but under tough competitive conditions every additional student reflects thought, effort and delivery.

FOR EVERY RAY OF SUNSHINE A DROP OF RAIN MUST FALL
The universities that have seen their enrolments decline by the greatest percentage lost 18,875 students. Some have had specific difficulties, such as visa challenges. Most are in the lower half of most league tables.

It is possible that the closing gap between the fee value of an international student and a home/EU student may have encouraged some universities to rebalance their community. But it is difficult to believe that many of these institutions set out to lose international enrolments to this level.

Table 3 – Eleven Largest Negative Changes In International Enrolment by Headcount 2012-13 to 2016-17

Source: HESA tables 2012/13 to 2016/17 (see notes at end of blog)

The most surprising is Nottingham University which has a well-deserved recognition for its international reputation and reach. Its Annual Reports for the period suggest a much smaller decline in international students from 6887 in 2012/13 to 6809 in 2015/16. The purpose of this blog is to reflect the data as reported through HESA but changes in reporting may have contributed to the overall scale of the decline.

Nottingham’s 2017 annual report also notes, ‘The University plans for a significant expansion of international recruitment, underpinned by the international foundation year, have been re-assessed and deliverable yet challenging targets have been agreed.’ Kaplan have been selected to support them.

In percentage terms Chart 4 notes those in the top 30 in the Times League Table 2018 that appear to have gone backwards over the period.

Table 4 – Universities in Times Top 30 Showing Volume Declines from 2012/13 to 2016/17

Source: HESA tables 2012/13 to 2016/17 (see notes at end of blog)

What this can mean for a university is illustrated by Table 5 showing income from international student fees over the period for three of these universities. While East Anglia’s and Essex’s declining income in 2016/17 is not calamitous it results from a declining student body and stagnation/low growth in fee levels. The University of Dundee has, from a lower base, been able to implement significant tuition fee increases.

Table 5 – International Student Fee Income (£000s) 2012/13 to 2016/17Source: University Financial Statements 2012/13 to 2016/17

THERE IS POTENTIAL FOR ‘THE DISCONTENTED’
Large institutions with strong rankings and good locations undoubtedly have some advantages in attracting international students. But less-well known, geographically challenged universities are achieving significant growth by adopting aggressive, well-planned and brilliantly executed strategies. Equally, it is true that even being well placed in the league tables, a big player with an established reputation, or part of the Russell Group ‘club’ does not guarantee growth.

I have long held the view that, as Oscar Wilde commented, ‘the world belongs to the discontented’. The challenge for ambitious universities is to maintain a sense of productive agitation for improvement in their approach to international recruitment. Constant attention to every facet of the pipeline is critical in a competitive environment as is a data-led approach and careful targeting of potential students with relevant programs of study.

NOTES
1. ‘HESA student figures include anyone enrolled for more than two weeks on a higher education (HE) course that is primarily based in the UK, unless they are an incoming exchange student, on sabbatical, writing-up or dormant.’ More detail at https://www.hesa.ac.uk/data-and-analysis/students/whos-in-he
2.Individual HESA tables from 2012/13 to 2016/17 were used to compile data in a time series for all universities in the 2018 Times league table. Totals and percentage gains or losses were calculated from this.
3.HESA tables round data which leads to occasional abnormalities in totals but these are minor in context.
4. The largest institutions in the HESA tables not featuring in the 2018 Times league table are University of Wolverhampton, Cranfield and London Business School – these accounted for 3085 students in 2016/17.
4. This blog reflects the HESA tables as published. It is recognised that reporting errors or changes in reporting conventions may have occurred.
5. The numbers shown in University annual reports usually differ from the HESA data. There are a number of reasons, including timing of any ‘snapshot’ used for University purposes.

China – Pigs in Pythons, Geese Laying Golden Eggs and the Sea Turtles

As we enter the Year of the Dog many international recruiters and university bosses will be anxious to know whether Chinese students will continue to follow the call to the traditional receiving countries. The period after Chinese New Year usually signals the quickening of pace in the recruitment cycle but may bring a summer of sluggish, difficult dog days for conversion. Some may even wonder how things might change by the time of the next Dog Year in 2030.

It is no secret that China has been the rocket fuel driving international student enrolments for the past fifteen years. The statistics show that US and UK enrolments continue to become increasingly dependent. And while the Canadian beaver may be popular and industrious, and the Australian kangaroo is bounding ahead, they look increasingly vulnerable to any changes in the market dynamics.

Table 1 – % of Chinese Students in Key Receiving Countries

NB: Gathering data that is matched in terms of definitions and timescales is problematic. The general point regarding concentration of students is clear but the sources are shown for clarity.

The demographics of China do not seem particularly helpful. The pig has passed through the python in terms of the bulge in University-age students. There are 32million fewer Chinese aged 20-24 than there were five years ago. And in another five years there will be 18million fewer than today. Numbers stabilise and then begin to grow slowly but by 2029 remain below 2017 levels.

Table 2 – China DemographicsIt would be fair to argue that 76million people is still a very big audience to aim at if you are a skilled recruiter prepared to travel around second, third and fourth tier cities (handy definition at http://multimedia.scmp.com/2016/cities/ ) as the move to urban areas continues.

There is also the lure that the Chinese middle-class is growing rapidly. Surely the wealthy middle-class is the goose that will lay sufficient golden eggs to more than make up for the fall in population? Well, maybe, but the concept of a ‘middle class’ seems quite slippery.

In 2016 McKinsey were reporting that, 54% of China’s urban households will be classified as “upper middle” class by 2022. Upper middle class sounds pretty well-off but is measured by McKinsey as household income of $16,000 to $34,000 a year. Just for comparison, the U.S. Census Bureau reported in September 2017 that real median household income in the US was $59,039 in 2016. If you have to pay tuition fees and accommodation in dollars relativity becomes reality.

To give this some further context Table 3 (below) shows the IMF and World Bank comparators on GDP per capita. The Geary-Khamis measure is an ‘international dollar’ that allows a comparison between countries allowing for local cost of living etc. The disparity between the US, UK and China on this measure seems stark.

Table 3 – Comparable GDP Per Capita (Geary-Khamis dollars)

IMF (2017) World Bank (2016)
USA 59,495 57,467
UK 43,620 42,609
China 16,624 15,535

Source: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Average wage growth in China looks pretty impressive. Trading Economics/MOHRSS statistics show strong growth. But a wage of CNY67569 is worth $10,643 in February 2018.

Table 4 – Growth in China Wages

The real question may be whether the burgeoning middle class will secure enough of the growing wealth of the country or whether the distribution of wealth will increasingly be skewed to a super-rich cohort. The New York Times in 2014 reflected on Professor Thomas Piketty’s book Capital in the Twenty-First Century. Critically, the author notes ‘…income from wealth usually grows faster than wages. As returns from capital are reinvested, inherited wealth will grow faster than the economy, concentrating more and more into the hands of few.’

Table 5 (below) suggests that a key question regarding the distribution of wealth to the Chinese middle class may rest on the extent to which China is more like France than the US and Britain.

Table 5 – Share of Total Income Change in Five Countries

Source: Capital in the 21st Century, Thomas Piketty

It may be, of course, that the growth in wealth is such that it will overcome the decline in demographics and the distribution of income hurdles. But a third challenge is how supply matches against demand in global higher education. In this respect developments in China (as well as other countries in Asia) are likely to bring serious and sustainable competition to traditional providers.

A full analysis is beyond the scope of this blog but recent reports give some sense of the direction of travel as far as capacity, quality and value are concerned:

i) Universities in China have built capacity at a furious rate and as Establishing A Presence in China notes notes ‘at current rates….there will be a university seat for every child in China by 2030’. (OBHE quoted in THE)
ii) Xiamen University opened its first overseas campus, the first Chinese university to do so, in the Malaysian state of Selangor in September 2015. The primary tuition language is English. The campus intends to split its students body equally between Chinese, Malaysian and other nationalities.
iii) The Asian Universities Alliance, launched in April 2017 will boost Asia’s influence on the global higher education stage as well as supporting regional student mobility. Founding members span 14 countries and include Tsinghua University, Peking University, and the Hong Kong University of Science and Technology.
iv) Government investment in Chinese academic research is significant and quality has moved ahead quickly. An example, noted by the White House and reported in the Washington Post (October 2016), gives context in terms of research into artificial intelligence.

Table 6 – Journal Articles Mentioning Deep Learning

vi) The Double First Class Project is reportedly allocating 40 billion RMB ($6.04 billion USD) to a comprehensive project to bring 42 Chinese universities and courses at another 95 Chinese institutions to a “world-class level”.

The move towards a powerful higher education sector capable of serving its own people as well as many other international students seems well established. But, as my economics teacher at school used to tell the class – all decisions are economic. She was in a relationship at the time with the person who became my politics lecturer at College who would tell us – all decisions are political. Education is often just a side show.

In that regard it’s worth considering the initiative commonly known as ‘One Belt One Road’. As one of the largest infrastructure and investment project in history it reportedly covers more than 68 countries, equivalent to 65% of the world’s population and 40% of the global GDP. The extension of soft power through hard cash may become critical in determining the long-term movement of students around the globe.

A self-sufficient China at the heart of a global network will become an even bigger attraction for business and, inevitably, for students drawn to a global economic superpower that is investing so heavily and making travel easier and cheaper. Many Western universities have already ensured that they are partnered with well-funded Chinese institutions and despite the odd wavering over academic freedom we have reached a point of no return. It seems likely that there will be a genuine tipping point where the long-established flow from east to west will reverse. The haigui, or sea turtles, may not need to travel (and certainly not in the volume of the last fifteen years), to secure the education they need for their lives and careers.

In that respect I find myself considering the words of Dr Monika Korte, the scientific director of the Niemegk Geomagnetic Observatory at GFZ Potsdam in Germany. She said, “It’s not a sudden flip, but a slow process, during which the field strength becomes weak, very probably the field becomes more complex and might show more than two poles for a while, and then builds up in strength and [aligns] in the opposite direction,”.

Dr Korte was talking to livescience.com in 2012 about the anticipated flipping of the Earth’s magnetic poles (What If Earth’s Magnetic Poles Flip? February 10, 2012). The article makes the point that the change is not instantaneous, that the period of change is difficult to manage and characterised by a significant weakening of the current magnetic field. But eventually the needle points in a different direction. I suspect that is a pretty good metaphor for the Year of the Dog 2030.