Tag: university pathways

US PATHWAY SECTOR FACES DOUBLE WHAMMY UNDER ENROLLMENT PRESSURE

It appears that the cull of pathway operations in the US has further to go. The Navitas website suggests that Global Student Success Programs at UMass Lowell, UMass Dartmouth and Florida Atlantic University have been discontinued.  All of them throw up the message, “The Global Student Success Program is no longer accepting new applications..” * It’s the same story for Virginia Commonwealth University and the University of Idaho links.

Looking more deeply, the figures from UMass Lowell show a precipitous drop in Navitas enrollments from 187 in Fall 2016 to just 81 in Fall 2018.  The numbers for 2019 aren’t available on the university site but a further dip seems likely.  If these are permanent closures it brings Navitas down to three pathways in US from eight at its peak.  Overall, the number of on-campus pathways in the US may have fallen to around 40 and its little wonder some are making a “pandemic sales pitch” that they are really masters of online technology.

With the pressure on US international enrollments growing year by year it’s difficult to see that there is a lot of good news to come.  Rumours abound and are difficult to verify but in recent weeks I’ve been told of a pathway run by one of the big two operators at a top 200 east coast university that is looking at a 70% decline in enrollments year on year.  It’s a very long way from the suggestion made in 2014 by Parthenon Group partner Karan Khemka, that “We anticipate that growth will be constrained only by the pace at which private providers can develop the market.”

We are seeing a wholesale realignment of the pathway sector but alongside that there may also be a double whammy as universities seek to renegotiate commercial terms in the light of changing market conditions.  For example, the University of South Carolina Board of Trustee minutes from April 2019 make for interesting reading as they reflect on the changing nature of the university’s deal with Shorelight.  The initial deal had been signed for seven years in 2015 and the proposal was to re-sign for another seven but with “better financial terms for the University”.

One big shift indicated was that USC would be allowed to keep 90% of the tuition paid by students in years following the pathway and pay Shorelight 10% of the tuition.  Under the initial agreement the split was 83% to USC and 17% to Shorelight, so on an out of state, undergraduate student fee of $16,700 that’s a cut of just over $1,100 a year per student.  It’s worth remembering that Shorelight noted early in their history that, “not only does the university not contribute anything upfront to get the program off the ground…but Shorelight reimburses the university for any expenses as it’s getting off the ground.”

The obvious question for traditional pathways is how they remain sustainable when the university is bearing none of the start up costs, and if the provider’s revenue share from students going into the university is being reduced.  In a recent blog I looked at the growing inter-company debt between INTO University Partnerships and its US pathways where, the collective debt owed by five joint ventures open for at least five years, had from under $5m to nearly $15m. The closure of the pathway at INTO’s partner Marshall University came as enrollments fell and inter-company debt rose sharply.

While $1100 a student doesn’t sound very much the real point is that this becomes a loss of $110,000 a year if you have 100 students progressing and $330,000 over the lifetime of the cohort. Add to that the increasing cost of acquisition of each student as global competition increases and the basic economics of a pathway come under serious pressure.

It also raises the question as to how sustainable are the remaining pathway operations as the US faces another bleak year for international enrollment.  A recent Open Doors survey reported 52% of US universities indicating a decline in enrollments for 2020.  Navitas research with agents recently suggested that declining student mobility and growing unpopularity could see the US lose between 160,000 and 350,000 international students.

Alongside the well-known and longer-term internal issues facing students who might previously have seen the US as their preferred option there is little doubt that competition is playing an increasingly important role.  The UK has made good headway and become a more popular destination this year which has led to an increase in undergraduate enrollment from China of 14% this year.  Canada continues to provide an attractive option with clear routes to citizenship that have been particularly successful in attracting Indian students in recent years.

Supply and demand are powerful and remorseless market disciplinarians.  The dash for growth in the US pathways came supported by over $1bn of private money flowing into the sector, but the economics of creating more and more supply at a point when demand was slowing have become evident.  With global competition for students increasing, student mobility threatened and universities finding alternative means of reaching the market – particularly online – it’s probably a hard road ahead.  

*As always I am happy to have authoritative corrections or clarifications and will record them.

Image by Gerd Altmann from Pixabay

The Dwindling Party* – More Pathway Closures in the US

Pathways providers are cock-a-hoop about the UK this year but there’s a slightly embarrassed silence about continuing closures in the US.  A quick spin through the websites tells us that INTO looks to be shuttering one of its early partners and Study Group has trimmed another from its stable.  And there are plenty of discussions about where the axe might fall next (with one contender noted below).

INTO’s portal for students claims 13 US partners but according to the corporate website there are “12..in the US”.  It’s not entirely clear which university was intended to be mysterious number 13, but a click on the number leads to just 11 partner logos shown.  The missing partner is Marshall University in Huntington, WV.

The Marshall deal was signed in November 2012 with the first students entering the pathway in August 2013.  It was the heady days of expansion in the US and the opening came the same year that Leeds Equity took a 25% stake in the INTO University Partnerships business for £66m ($105.8m). With Shorelight Education launched shortly afterwards there was a lot of private money betting that US expansion would guarantee international student growth for a long time to come.

But Marshall’s non-resident alien population and the strength of the INTO pathway have declined sharply in recent years.  Institutional data showing early fall statistics shows a fall of 37.6% enrolled at INTO Marshall and 38.7% in the university overall (which implies that direct recruitment was falling faster).    

Table One: Marshall University International Student Enrollments

With respect to Study Group, I reported on closure of three US Centers back in September but since that time yet another has disappeared from the list of logos on the website: Oglethorpe University.  A visit to the University’s website confirms that the last intake was September 2019, and that the International Study Center won’t exist after May 2020.  The partnership was announced in 2017 with President Lawrence Schall, stating, “As part of our globalization strategy, choosing the right pathway partner was important.”

Reasons for the closure are not easy to discern, as the Oglethorpe Fact book suggests significant improvement of international numbers year-on-year for 2019 entry.  The number of countries for represented for first-timers had also increased slightly.  Maybe the future did not look bright enough.     

Table 2: Oglethorpe University International Enrollments

  Fall 2018 Enrollment Fall 2019 Enrollment
First time, full time international 16 41
Full time traditional undergraduate profile 97 122

While walking through the pathway websites I also came across Cambridge Education Group suggesting that a pathway with Illinois Institute of Technology, first announced in early 2018, is still ‘coming soon’.  When I clicked on the link for Illinois Institute of Technology Direct Entry I found an error page.  Careless at best if this is an important relationship but perhaps indicative of more deep-rooted reconsideration.  As always, I am happy to clarify this if I receive an authoritative correction and explanation.

It seems likely that the US will suffer even more retrenchment in international student enrollments over the coming year.  The resurgence of the UK will almost certainly affect the US more than other locations, with the recently reported 93% increase in student visas from India just the early part of the surge to take advantage of enhanced post study work visas.  Of course, the implications of coronavirus have yet to play out fully and that may mean that all bets are off. 

*The Dwindling Party is a book by Edward Gorey where pop-up illustrations and verses divulge how, one by one, six members of the MacFizzet family, disappear during a visit to Hickyacket Hall, leaving behind only young Neville, who expects “it was all for the best.”  It’s an interesting metaphor.

Image by Mediamodifier from Pixabay 

Another Canadian University Pathway Coming Soon?

Pathway operators have been focused on getting contracts with universities in Canada for several years but there has been little real momentum.  All the more interesting to catch rumours of Navitas nearing a breakthrough with Ryerson University.  It’s worth having a look at whether there’s any strength to them.

Exhibit one would be the university’s Senate Meeting Agenda of 1 October 2019.  Pages 78 to 83 have a summary of meetings ‘from the President’s Calendar’ and there, hiding in plain sight on page 82, is the entry:

Jul 29, 2019: Over dinner, I met with Rod Jones, group CEO for Navitas worldwide; Scott Jones, nonexecutive chair of the board for Navitas worldwide; and Brian Stevenson, president and CEO, university partnerships, Navitas North America. We discussed the potential for Ryerson to bring in international students through the pathways to university education that Navitas offers.

The information had previously been shared at the Board of Governors meeting on September 20, 2019.  So we know that Ryerson’s President Mohamed Lachemi has been meeting with senior people from Navitas although that might not be considered unusual.  But there’s a little bit more to report.

Recent social media shows President Lachemi escaping the Canadian winter in the past couple of weeks and ‘expanding Ryerson’s relationships with leading universities’ in Australia.  This might be unexceptional but the twittersphere also suggests visits to Griffith College and Deakin College – two Navitas centers – arranged by Navitas.  And it sounds like there have been more meetings with senior Navitas folk.

There’s no way of confirming the market gossip and I am always happy to clarify the situation if an authoritative source gets in touch. Ryerson has certainly been in conversation with at least one external operator in the past but given the rise of Canada as an international student recruitment magnet it’s questionable what benefits such a relationship brings.  Some commentators might argue they could organize themselves to take advantage of the momentum behind enrollments.

Once clue might be that Ryerson looks to have been left lagging despite the surge in interest for the country with the world’s longest bi-national land border.  There are thirty Canadian universities listed in the THE 2020 World Ranking top 1000 and the percentage of international students at Ryerson is the lowest of all.  At 4% it is well behind other, admittedly higher ranked, Toronto institutions like the University of Toronto (21%) and York University (24%).

Ryerson’s global ranking in the THE ranking 601-800 bracket places it behind the other Navitas partners in Canada.  The University of Manitoba is ranked in the 351-400 bracket and has 17% international students and Simon Fraser University is in the 251-300 bracket with 30% international students.  This might suggest that there is plenty of scope for Ryerson to grow with the right sort of support.

It would be the third public research university to partner with Navitas and would give the portfolio added depth.  The only other pathway provider with representation in Canada is Study Group who have one public research university in Royal Roads and two sub-degree colleges in Stenberg and the Center for Arts and Technology. 

With US enrollments still struggling and the maturity of the UK and Australian pathway markets it’s easy to see why there is interest in Canada.  Interest remains strong amongst students and agents with little sign of applications slowing.  But everyone with a history in international recruitment knows that past performance is no guarantee of future success.

The international student boom in Canada has come with some issues that are increasingly grabbing the headlines.  There are allegations of students being ‘duped by unscrupulous agents’, scarcity of part-time work and up to 39% of study visa applications being rejected.  It’s difficult to believe that interest will slump quickly or precipitously but it may be time for wise heads to consider what a sustainable rate of growth might look like.

Image by David Peterson from Pixabay

Changing Fortunes and Futures Across Major Recruiting Countries

Another extraordinary year in higher education around the globe and a good moment to review some of the highlights and possible future directions of the main four recruiting countries.  There’s plenty to consider as the established recruiting heavyweights fight off emerging challenges, the shake-up of pathways continues, and India’s rise as a market becomes an obsession for recruiters.       

USA

A year of reckoning for pathways with four closures each by Study Group and CEG while EC Higher Education exited the market totally.  All of which reminded us of the chill wind blowing through international student enrollments in the US.  It added to the uncertainty around a sector which is seeing changing demographics and growing competition lead to longstanding institutions closing. 

IIE reported overall international student enrollments for 2018/19 down 2.1% on the year before and 3.4% down on the peak of 2016/17, with the number of new undergraduates falling for a third year in a row (down 10.4% over three years).  For the press release to claim,  “we are happy to see the continued growth in the number of international students in the United States”, seems either complacent or misguided.  It’s fair to say that the quote reflects the inclusion of OPT (a form of post-study work) numbers in the overall count but even when they are included growth was a measly 0.05% which hardly seems a basis for contentment. 

A microcosm of the problem and its impact on pathways was highlighted by student newspaper The University Daily Kansan which showed the University of Kansas and Shorelight partnership falling short of expectations.  It indicates that in 2014 Shorelight intended to double the number of international students at the University.  But between 2014 and 2018  the number enrolled fell from 2,283 international students to 2031 – an 11% decrease.  

 Shorelight parted company with their Chief Commercial Officer, Sean Grant, in October after just over a year in post.  At INTO University Partnerships, Cagri Bagcioglu, Senior VP Partners North America, left after 16 months and has turned up at Cintana Education.  Reports of job losses at Navitas were in the news and Study Group have yet to announce the replacement of their North American MD.

Looking forward there seems to be little likelihood of the news improving any time soon.  Changes to post-study work in the UK may further undermine recruitment from India and there is already good evidence that some Chinese students are putting the UK ahead of the US.  It will be worth watching to see whether INTO, buoyed by bumper recruitment in the UK, will invest heavily to make life even tougher for the US-centric Shorelight.

UK

The world of international student recruitment in the UK changed in September 2019 with the announcement that a two-year post-study work visa was being introduced for students from the 2020/21 academic year.  Foundation courses are already doing huge business for January 2020 entrants looking to go on to the full university degree later in the year.  The British Council is predicting growth of ‘just under 20%’ across the sector in the year ahead.

The announcement lifted the gloom that had been felt since post-study work was ended in 2012.  While many big brand names have done well in the intervening years, the new Government policy opens the door for more universities to maximize their intakes.  The news built on statistic showing that the UK had already seen a 63% year on year increase in Tier 4 visas granted for Indian students in the year to September 2019.

It was a good year overall for pathway providers with Study Group picking up Aberdeen and Cardiff while Navitas secured Leicester.  Given the renewed recruitment opportunity, it’s ironic that INTO’s pathway with Gloucestershire was closed during the summer period.  With growth guaranteed for a couple of years the year ahead may be the right moment for some of the smaller players to get a good price for their pathway activity from one of the big players.

The coming year is also likely to see interest focusing back on the implications of Brexit with the probability of the Government inserting a clause to ban any delay beyond December 2020.  Plenty of reason for universities to be nervous about enrollment from Europe if students are obliged to pay international fees when the deal is done.  And there may be a resurgence of interest in new, European based campuses to try to ameliorate the problem.

Australia

The battle for the Ashes has nothing on the intensity of competition for international students, and it took Australia less than a month to respond to the UK’s post-study work change.  They decided that Perth and the Gold Coast would be classified as regional which gives international graduates an  additional year of post-study work rights.  The federal government added that student in regional centres and other areas would have access to up to six years of PSW.

All this on top of an Australian enrollment juggernaut that has seen double-digit growth in international higher education students for each of the past four years.  Enrollments year on year to October 2019 were c45,000 up at 434,756.  Despite arguments about lack of diversity their percentage of Chinese students is 28% compared to the US at 34% (including OPT) and the UK at 33% (of international fee paying).

There could be plenty more gas in the tank which may have been the reason Rod Jones and his colleagues took Navitas into private ownership with BGH.  It would also explain new kids on the block (or old kids who’ve been round the block) Camino Global Education, founded by John Wood, former CEO of university partnerships at Navitas, and Peter Larsen, who co-founded Navitas (then known as IBT) with Rod Jones in 1994.

Australia has led the way in developing transparency on student recruitment agencies, and its Government recognizes the value of the higher education sector to the economy.  One would guess that the potential of trans-national education is well within their sights as they embed their network in the vibrant Asian economies.  For the casual observer they also provide the best, most up-to-date and detailed data on international student enrollment and that’s a model most other could do with replicating.

Canada

‘O Canada…with glowing hearts we see thee rise, the True North strong and free’.  Those words from the national anthem must be how the country’s higher education sector and national Government feel about international student recruitment.  But it’s far from over because the federal government recently pledged nearly $30-million a year over the next five years to diversify global recruiting efforts in the postsecondary sector.

Remarkable to believe that just five years ago a headline of ‘When it comes to foreign students, Canada earns ‘F’ for recruitment’ accompanied the release of a report by the Council of Chief Executives and the Canadian International Council.   It provoked action and the launch of the EduCanada brand in 2016, which drove the number of international students in college or university from about 120,00 to 260,000 from 2015 to 2018.

Canada is also unusual in having more students from India than from China.  In December 2018 India surpassed China as Canada’s top source of foreign students, across all sectors, with more than 172,000 study permit holders. Each country represents slightly more than a quarter of the total of 570,000.

It’s no secret that every pathway operator has been trying to access the Canadian higher education sector for years.  The reality is that the sector had organized itself and was making progress while most of the attention was on the US.  There seems little need for outside help as they launch their  International Education Strategy 2019-2024.

Anyone who has worked in the international recruitment field knows that bets on long-term success are likely to lead to embarrassment. It’s less than a decade since Australia’s years in the doldrums, this article notes Canada’s ‘F for failure’ and just three months ago the UK wasn’t competing on post-study work options. It’s also only ten years ago that the lure of the US market was driving extraordinary valuations of pathway companies.

But it seems pretty reasonable to say that when the enrollment numbers for 2019/20 and 2020/21 are in there will be smiles in Canada, Australia and the UK. For the US the road to growth is unclear and may be several years in the building. And there remains the possibility that higher education in Asia will reach a tipping point to upset the old order even more fundamentally. Happy holidays.

Photo by Element5 Digital from Pexels

Changing Perception of US Pathways

It’s been the quietest year for nearly a decade in terms of announcements about new pathway partnerships in the US, and the 2019 Inside Higher Education (IHE) survey of College and University Admissions Officers suggests a shift in perceptions by institutions.  The closure of several centers in the past year and disappointing enrollments at a number of institutions have given plenty of reason to be cautious.  But faith persists in some sectors.

In the Survey only 12% of public doctoral institutions strongly agreed that “Pathway programs will become more important to US higher education in the current environment.” In the 2018 survey that percentage was 22%.  Among Private Non/Profit Doctoral/Masters institutions, the percentage of respondents agreeing or strongly agreeing to the statement fell from 60% to 51%.

Table 1 – Pathway Programmes Importance to US Higher Education (IHE, 2018)

Table 2 – Pathway Programmes Importance to US Higher Education (IHE, 2019)

However, there has been an almost Damascene conversion among Public Master’s/Baccalaureate institutions, where 28% now strongly agree in pathways’ growing importance, compared to 15% last year.  This is mirrored in the Private Non-profit Baccalaureate section where 56% agree or strongly agree compared to 33% last year.  While, at an aggregate level the survey shows declining enthusiasm for pathways it is clear that they still hold an allure for some institutions.

The real question for the new enthusiasts will be whether the private pathway providers have much appetite for non-doctoral institutions.  The portfolios of the ‘big two’, Shorelight and INTO, contain universities offering doctorates some have quite limited offerings.  Study Group have a mixed bag of institutions and recently some at non-degree level in Canada, and Navitas has some non-doctoral universities on the roster.

Potential for new, high-profile partners may become even more limited as stronger US institutions become increasingly comfortable with their capacity and capability to manage enrollments without resorting to a third party.  While, to date pathway providers have been the more likely party to terminate partnerships empowered or disappointed universities might begin to question underperforming relationships or decide they can do better alone.  The scene is set for more turbulence as people come to terms with the new global mobility conditions.       

Furthermore, the UK’s move to institute a two-year Post Study Work (PSW) visa for students enrolled from 2020 may bring further pressure and undermine the US’s position as a favored destination for international students.  After a 33% surge in Chinese undergraduate applications to the UK for 2019/20, the UK Home Office reported that the number of Indian students choosing to study in the UK increased 42% from June 2018 to June 2019.  It is likely that following the PSW announcement, India’s numbers will continue to grow rapidly for the 2020 intake.

Alongside that, the US is heading for an election year where the future of global relationships, student visas and existing post-study options could be part of the political debate.  Just as the financial markets dislike turbulence it is difficult to see why a student would choose to invest in an uncertain future.  The relatively safe havens and emerging, quality options around the world could seem increasingly attractive. 

For Study Group and Navitas any difficulties in recruitment to the US will be mitigated by increasing momentum behind their considerable portfolios in other parts of the world.  INTO’s mix is more finely balanced but its recent focus has been on the US and it has just lost the University of Gloucestershire as a UK pathway partner.  Shorelight is wholly US based and will face the full force of global headwinds. 

It certainly seems likely that pressure on sales teams, cost of acquisition and other “promotional” tactics will increase.  Local difficulties, such as those Shorelight are facing in Kuwait, will also impact on the ability to recruit sufficient students for existing partners let alone new ones.  Life is unlikely to get any easier in the short term and may get a lot worse, which might seem to mitigate against continuing expansion, particularly with sub-optimal partners.     

However, ‘doubling down’ is a popular phrase in the US and has come to mean ‘to strengthen one’s commitment to a particular strategy or course of action, typically one that is potentially risky.’  The IHE survey suggests that at least one sector of the market is increasingly interested if pathway operators have the appetite.  But in terms of recruitment it might be worth remembering that, as the UK’s ‘Iron Lady’, Prime Minister Margaret Thatcher said in 1997, ”you can’t buck the market.”

Image by Gerd Altmann from Pixabay

More Pathway Recruitment Indicators

Detailed, consistent and up to date insights into pathway recruitment performance are often difficult to find.  Some US universities give good data at a granular level and I reported on some of these in a recent blog.  The completion of the reporting cycle for INTO’s Joint Ventures and wholly owned centres in the UK gives a comprehensive picture of their enrolments in the 2017/18 financial year.

For the ten entities – eight joint ventures and two wholly owned centres – that have been trading five years, total enrollments bounced back from the low point in 2016/17 but remain short of 2013/14 levels.  This suggests that it’s probably still pretty tough going for the UK pathway market.

Table 1 – Average Enrolments for INTO Centres 2013/14 to 2017/18

Source: Annual Reports

At a detailed level the drivers of growth were Newcastle and City which bounced back after several years of decline and Queen’s.  Long-term partners East Anglia seem to have bottomed out after three years of decline.  Neither Stirling or Gloucestershire, the most recent partners in this group, have got over the 200 student mark after five years.

Table 2 – INTO UK Centres Average Enrolments 2013/14 to 2017/18

Source: LLP Annual Reports

INTO centres split educational oversight between ISI and the Quality Assurance Agency with the former giving specific details on numbers enrolled and the latter being less prescriptive.  While the annual reports noted above are averages across the financial year (August to July) in question, the ISI education oversight into three centres gives deeper insight into the most recent autumn intakes.

The distinction between EFL and FE used in the ISI reports broadly distinguishes between students on English Language only or Academic courses.  Newcastle appears to have a significant number doing both. 

Table 3 – Student Population of three INTO centres – November 2018

Source: ISI Educational Oversight Reports

The other INTO Joint Venture is Newcastle University London which had an inaugural intake in 2015 and offers both pathway and degree courses.  At the time of launch the university indicated that ‘…..in collaboration with INTO, our London campus is expected to grow to 1,200 students’.  Three years in the average numbers for 2017/18 were 381.

Recent UK pathway activity from established providers has largely centred on adding well ranked partners with Study Group, Navitas and Kaplan gaining Aberdeen, Leicester and Essex respectively.  Newer players have generally picked up less well-known names with Oxford International adding Greenwich and QA HE with Southampton Solent.  With the UK Government launching its new strategy for international student recruitment it remains to be seen if the cake will grow for everyone or if the strong will dominate.

NOTE: Table 2 updated 16 June 2019 to include INTO Glasgow Caledonian University 2017/18 enrolment   

US INTERNATIONAL STUDENT ENROLLMENTS – PEER TO PEER AND PATHWAYS

Making sense of trends in US international enrollments presents real challenges due to the diversity among ~4,000 institutions.  Looking at Oregon State University’s self-identified peer group of four other public universities is an opportunity to get under the surface.  It also provides insights as to how private providers offering pathways and direct recruitment support to universities, are contributing to overall numbers and adjusting their programs in an increasingly crowded market.

It’s a small sample over a limited time but it may offer some pointers for universities considering how best to meet their recruitment needs*.  Over a four-year period to fall 2018, one of the two public universities without private provider support was competitive in terms of overall international student enrollment. Where a new peer institution was added to the provider’s portfolio during the period it did better than longer-term partners.   

Some universities have benefited significantly from partnering with a private provider to bring global recruitment expertise to both pathway and direct enrollment.  But some have been less successful and new dynamics are emerging as the sector matures, competition increases and student numbers fall.  Where a private provider services several universities with similar academic and ranking characteristics the potential for internal competition for students is likely to increase. 

For the university this makes the task of selecting a provider more complex and the consideration of tighter commercial terms on target numbers and non-competing partnerships worth close attention.  The lure of having a partner who offers to take all the up-front costs while returning more international students than the university currently has will always be attractive.  But the prospect of signing a long-term contract to become a commodity product in an undifferentiated portfolio is less so.

A MIXED PICTURE IN TOTAL INTERNATINAL ENROLLMENTS AMONGST THE ‘ORANGE PEERS’

Oregon State University (Oregon State) defined four institutions as “Orange Peers” for the purposes of its Strategic Plan . Two, Colorado State University (Colorado State) and Washington State University (Washington State) are, like Oregon State, partnered with INTO University Partnerships.  The others, University of Nebraska (Nebraska) and Oklahoma State University (Oklahoma State) do not have any private-provider pathway relationship.

A working assumptions of most private pathway provider relationships is that the university will benefit from students progressing from the pathway as well as direct applications as the institutions international profile is raised. Providers have also increasingly focused on recruiting students directly to the university i.e. not just through a pathway, with remuneration often coming as a percentage of tuition fees paid by the student. Looking at an institution’s total international enrollments is one way of considering how the partnership is delivering.

The four-year picture in Table 1 broadly reflects the overall slowing in the US since 2015.  However, Washington State had year-over-year growth of 66 students and 46 in 2017 and 2018 respectively, which may reflect the early growth stage of the partnership with INTO which commenced in 2017.  Both Oregon State and Colorado State, long term INTO partners from 2009 and 2012, respectively, saw overall enrollments decline in 2018. 

Nebraska, which has no private-provider support had the strongest growth over the four years, increasing by 283 students or 11.2%, despite a dip between 2017 and 2018. Oklahoma State fared significantly worst with a fall of 236 students. 

The IIE Open Doors report shows that between 2015 and 2017 (the latest comprehensive reporting available) US total international enrollments fell by 0.56%.  All of the ‘Orange Peers’, except Oklahoma State, out-performed on that timescale. It will be interesting to see how 2017 to 2018 enrollments compare against the national trend.

TABLE 1 – ‘Orange Peers’ – Total International Enrollments Fall 2015 to Fall 2018

Source: Institutional Reporting

PATHWAY PROGRAMS REFLECT CHANGING CIRCUMSTANCES

Pathway enrollments help underpin direct recruitment to university programs. As global markets change in terms of major sending countries and the demands of students they need to operate flexibly to maintain relevance. As the number of pathways in the US has grown competition for students has intensified.

In June 2018 Inside Higher Education’s Elizabeth Redden took a deep dive into pathway performance as US international enrollments came under pressure.  She noted, in particular, a steep decline in pathway numbers at Oregon State driven largely by falling numbers of Academic English students.  Fall 2018 data shows that this has continued along with a decline in both Graduate and Undergraduate pathway numbers.

TABLE 2 – INTO Oregon State University Enrollments – Fall 2015 to Fall 2018

Source: Oregon State University Institutional Research

At Colorado State one response to the changing market conditions has been a notable increase in the number of pathway courses and the range of academic disciplines covered.  In fall 2015 six pathway programs secured 152 students, an increase to 14 programs in 2017 drove a short-term increase to 163 enrollments, with numbers falling back to 142 in 2018 despite a further program being added.

Enrollments on the business pathway program have fallen sharply over the period with engineering enrollments also declining in 2018.  New programs in computer information systems, computer science and finance have ameliorated the overall decline.  These shifts demonstrate that traditional recruiting patterns are under considerable pressure and raises some questions over whether emerging courses will reach the same volume of enrollments.     

Table 3 – INTO Colorado State University Enrollments – Fall 2015 to Fall 2018

Source: Institutional Research, Planning and Effectiveness Reporting

At the time of writing it was not possible to find any specific detail about enrollments in the Washington State pathway programmes.

FUTURE DIRECTIONS

US pathway growth continued after new international student enrollment growth peaked in 2016, with around 20 further partnerships by 2019.  The ubiquity of pathways has seen an increasing duplication of academic offering and ranking status within each provider’s network. The recent closure of three of CEG’s pathways operations in the US suggests that some partnerships may begin to look sub-optimal over time and that restructuring is likely to happen in the future. 

In this new world, well-placed universities looking for partnerships hold a great deal of power to dictate commercial terms or to choose to invest in alternative recruitment options.  Locking out competitor institutions, contractually-binding performance criteria and understanding how to exit a failing partnership without penalty should all be considered as part of the commercial terms.  There are still many opportunities for the smartest and most creative to do well.         

*Data provided by universities is seldom wholly consistent and some provide greater granularity than others. Every effort has been made to make fair and consistent comparisons but any authoritative corrections or comments are welcome.

From Deal to Delivery With Pathways

After the champagne has been drunk and lawyers have left the building the respective teams of the pathway provider and the university face ‘operationalising’ the arrangement.  57% of College and University Admissions Directors believe ‘pathways programs will become more important to US higher education in the current environment’ (IHE/Gallup Survey, 2018) so it’s a good moment to consider how that can work.  Here are a few thoughts and things to consider based on experience from both sides of the fence.   

Most deals are driven by senior management who want to meet strategic needs including more students, revenue and diversity.  Work groups, steering boards and workshop sessions are often held in the context of political will from the top down to get a deal done.  But once they believe the international recruitment issue is resolved the top team moves on to other priorities.

The failure of many pathways to deliver the expected results can be traced back to this moment because there is no perfect preparation for the day to day engagement between two culturally different organisations.  Caution, disorientation and lack of empathy quickly become frustration, blame and mistrust.  As Mike Tyson memorably put it, “Everyone has a plan until they get punched in the mouth”.

Personal relationships between key decisionmakers can help and one example will serve. One pathway provider wanted to take over all communication with agents, a plan that was being resisted wholeheartedly within the university.  It became a symbol of resistance in the international office but a sign of naivety and bloody mindedness by the provider. 

Over a couple of Long Island Iced Teas in a Malaysian bar the universities head of international recruitment explained the insecurities, egos and justifications to the provider’s Global Sales Director.  After a pause he simply said, “OK.  You carry on communicating directly.  As long as you promise that we can review in six months and if it isn’t working we try my way.”

It allowed the head of international a ‘victory’ but also the chance to give a clear warning to the internal team that they had to deliver.  Having conceded without rancour the provider was able to leverage goodwill on other issues. A year or so later both the main protagonists agreed that it was never that important an issue in the first place.

But personal relationships are the result of hard work, respect, regular engagement and transparency.  There will always be decisions to make, changes to consider and strong views to manage. Below are a few things that will almost certainly come up in the first year or so and some possible responses.  

  • Entry requirements will need reconsidering.  Most pathway providers will, at some point, say that recruitment or progression is being hindered by unrealistic academic standards.  Every university with a few years of successful recruitment will want to raise grades and then gets surprised when applications drop off. 

Be realistic and conduct ongoing research into what is happening in the market – not just in your country but around the world. Too many universities fail to fully understand international equivalencies or the difference between school systems in other countries.

  • Cost of acquisition is going up and universities should invest. Competition is tough and commission deals are a complex range of standard, special, emergency and wrapped in deals for marketing, trips and exhibition slots.  The suspicion is always that higher costs are simply an excuse to cover poor recruitment planning.

Understand the providers commercial plan for engaging with agents and why they believe it works for your university.  Then keep asking how it is going and what evidence exists – term sheets are relatively easy to get from friendly agents.  Consider the lifetime value of the student to the university and work with the provider to consider that return holistically. 

  • Academics should travel to support recruitment.  Some academics have been global road warriors with great success and some senior management teams spend weeks on the road at key times.  Some try never to leave the university campus because it interferes with their research or they don’t have budget.    

In the battle for students an academic title can make a real difference and overtime the winners will have academics who travel regularly.  Get used to it and build an internal team that is willing to trot the globe and work hard to recruit. Also, make sure there is a budget to support international travel – time in country is never wasted.

  • Admissions times are rarely fast enough.  This usually become a running sore and it needs to be dealt with quickly. Standards should be agreed before the deal is signed but even then the provider will want to move the goalposts.     

Admissions processes are part of the recruitment arms race and sometimes responses are needed very quickly to optimise enrollments.  Work with the provider to make the internal investment case for improved systems, people and processes.  Start from the point that admissions is a bridge not a gate – the objective should be to secure every student who has a reasonable chance of completing their academic programme. 

  • Targets will be missed.  In the heat of deal making the pressure to close is intense and people, on both sides, sometimes get greedy and fearful in equal degree. Too many partnerships then work under a fog of misunderstanding and misinformation about target, stretch target, baseline, quotas etc.  Even worse can be a lack of realism and prompt feedback about changing market conditions.

Start by presuming that first-year recruitment may be well below target (and that it is not necessarily the providers fault).  Make sure university budgets, assuming progressing students, have a reasonable buffer.  Do the work to review second year and third year targets as early as possible in the light of experience.  Understand what can and will change to make ensuing years better.   

  • Universities expect the provider to do it all.  It can seem reasonable to hand the controls to the ‘experts’ and sit back to watch the students roll in.  And there is always a get-out clause or a contractual stick to beat them with if targets are missed.

That is not partnership and universities should want to be involved in anything that involves their reputation.  It’s not just about money because students and staff have a stake in the outcomes.  University staff know their institution better than any external provider ever will – the more generous and helpful they can be the better for everyone.  And providers need to socialise new thinking carefully rather than launching a new plan that is seen as counter-cultural.

  • Senior people and champions will leave.  A partnership deal is often partly the result of a meeting of minds and ambitions.  But it is rare for the original movers and shakers to be as regularly involved after three years.  Incomers will have different understandings and motivations and the glow of ‘mutual benefit’ can be tarnished by competing interests.

Providers need to be alert to changing University personnel and work hard at relationships– not just at senior level but by embedding themselves at several levels.  Taking time to understand new thinking while establishing a common knowledge of history pays off.  Universities need to make sure they are allowing good access and taking time to keep their internal audiences informed.

This list is not intended to be exhaustive and there is plenty more that could be said about building long-term, productive partnerships in student recruitment.  Neither partner should expect to have it all their own way but the search for optimal outcomes should be ceaseless.  Perhaps the best advice is to have ‘the qualities of an old political fighter’ as Boris Yeltsin once ascribed to a colleague – ”patience and flexibility, always searching for intelligent compromise.  

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.”