COLLEGE INC.: contextualizing the PBS documentary on for-profit universities, Wall Street, and government regulation

Link here for access to PBS’s COLLEGE INC., which was aired on 4 May 2010. RAINmedia, which produced the documentary for PBS’s FRONTLINE, describes the show this way:

Higher education is a multi-billion industry fueled by taxpayer money. One of the fastest-growing–and most controversial–sectors of the industry is the for-profit colleges and universities. Unlike traditional colleges that raise money from wealthy alumni and other donors, many for-profit schools sell shares to investors on Wall Street. But what are students getting out of the deal? Critics say a worthless degree and a mountain of debt. Proponents insist they’re innovators, widening access to education. FRONTLINE producer and correspondent Martin Smith follows the money to uncover how for-profit universities are transforming the way we think about college in America…

This show, which is currently generating ripples across the higher education and investment landscapes in the US, is also relevant for readers in other countries, most notably the UK, Chile and Mexico (where Apollo Global is particularly active), and Australia (e.g., see ‘Commercial campuses ready to fill gap‘, The Australian, 5 May 2010).

And speaking of topical news, it is noteworthy (but purely coincidental, re. timing?) that former US President Bill Clinton “accepted the role of Honorary Chancellor of Laureate International Universities, the global network of leading private universities” one week ago. This is a paid position, “honorary” title aside, though Laureate has refused to disclose the sums involved.

And is it purely coincidental that the show is being released amidst vigorous debates about forthcoming US federal regulations that, according to Bloomberg news:

may reduce the amount of federal financial aid flowing to for-profit colleges, cutting the companies’ annual revenue growth by as much as a third.

In response, the $29 billion industry and its supporters including Republican Senators have enlisted top Washington lobbyists and are courting black and Hispanic legislators to fight the proposed rules scheduled to be released as early as this month.

While these debates may seem US-centric at first glance, their outcomes will have implications at a much large scale for these firms are establishing global agendas and networks.

Kris Olds

Moody’s ‘Special Comment’ report on the global recession and public/private universities

They say a year is a long time in politics. This last year has been a particularly long one, not only in political and policy circles, but for whole nations and their institutions. The sub-prime mortgage collapse quickly turned into a fiscal meltdown and is now a full-blown global recession.  ‘Hunkering down’, weathering the effects, and practicing ‘recession-style prudence and risk management’ is now the new game in town.

So how are universities doing in this highly uncertain, fiscally-brutal environment? Clearly there are many kinds of stories which can and are being told — from departments closing to new ventures being advanced.

One story being put forward is by Moody’s — one of the two big global rating agencies whose pronouncements on the creditworthiness of nations and institutions makes them particularly powerful and worth noting (see also our earlier background report on rating agencies and higher education).

In June, Moody’s released a Special Comment report on higher education called Global Recession and Universities: Funding Strains to Keep Up with Rising Demand which makes for particularly interesting reading. The lead author of the report is Roger Goodman, Vice President-Senior Credit Officer, Moody’s Investors Service, New York.  Our thanks to University World News for bringing the report to our attention in their 5 July story ‘US: Universities fair well in recession, says Moody’s‘), and to Moody’s for permission to publish the figure below.

Essentially their argument is that (particularly public):

…universities are proving to be appealing investments for government stimulus efforts due to the sector’s stabilising, countercyclical nature in the short term as well as its potential to stimulate long term economic growth.

…Most universities demonstrate countercyclical ability to increase student enrollments during recessions, receive relatively strong support from sponsoring governments, and offer long term potential for increasing revenue diversity.

On page 3 of their report, Moody’s offer a useful graphic on the enrollment impact of recessions (see Fig 1 below).

MoodysFig1

In other words, as the economy nose-dives, individuals are more likely to consider investing in more education as a means of waiting out the recession, and positioning themselves for the labour market when it revives. For Moody’s this all means a possible ‘tail-wind’ for universities as student demand increases — particularly those who have an access oriented agenda.

Moody’s Report outlines 5 key ideas:

  1. While universities will experience some stress, they will be more sheltered than other sectors.
  2. Public university ‘credit quality’ will be steadier than that of private universities
  3. Private universities can achieve a high rating if they are able to show evidence of sustained demand, financial strength and liquidity is clear
  4. Universities are likely to seek more alternative sources of funding to offset the pressure on government balance sheets and limitations on public funding growth
  5. Despite efforts at diversifying, the public sector will continue to play a central role

There are several issues worth noting here. The first is that individuals have been encouraged to invest in a graduate education, very often at considerable personal expense (loans and so on) with the promise of future earnings that outpace non-graduate earnings. If wages are depressed across the public and the private sectors because governments and firms are having to manage the consequences of bailing out the banks, then a graduate education might not be as appealing as it once was.

Second, aside from the stark black and white categorizing of ‘public’ and ‘private’ in this report (for instance, is the University of Sydney, or the University of Wisconsin-Madison, public or private given that both receive around 14-18% of their core budget from government funding?),  Moody’s also offers us something of a paradox.

To weather the storm, public universities are going to have to become more ‘private’ in order to augment meagre government budgets.  However, the more private a once public university is, the greater the risk. Is this not a classic case of catch-22?

Susan Robertson

The US – India ‘knowledge’ relationship: the sleeping giant stirs!

gore Editor’s Note: This entry has been kindly prepared by Tim Gore, now Director of The Centre for Indian Business, University of Greenwich, London, UK.  Prior to this, Tim was Director of Education at the British Council in India, where he was responsible for growing the knowledge partnership between India and the UK. Tim also led the establishment of the UK-India Education and Research Initiative (UKIERI) that is profiled in an earlier blog entry.

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How will President Obama’s ambitious plans for a new diplomacy translate into practical international relations and how will this impact on the education sector? An early example of this may prove to be relations with India and some clues may be in the newly released Asia Society Task Force report: Delivering on the Promise: Advancing US Relations with India.  goreasiasociety2goreasiasociety1

The high level rhetoric for the US-India relationship may not have changed that much after all President Bush declared ‘the world needs India’ on his 2006 visit to the Indian School of Business (ISB) – Hyderabad –  a school touted by the new report as an example of what can be done with good US-India cooperation. The School works in partnership with Wharton and Kellogg and prompted a Bush accolade ‘You’ve got a great thing going’!

However, the tone of the report is a substantial departure from the Bush years. Democratic colors are now firmly fixed to the mast and references to ‘reciprocity’ and ‘understanding India’ abound, while the ‘world needs India’ has changed to ‘the USA needs India as an ally in its foreign policy issues’.

The education agenda is a little buried in this report. It has been classified under the second track ‘Joint Public-Private Partnerships for Complex Global Challenges’. Is this code meaning that there will be little Government funding available (seed-corn funding is mentioned briefly)? After all, educational relations between the two countries have flourished over the years, despite a relative absence of visible policy and public sector involvement. There are over 80,000 Indians studying in higher education in the US every year and the US dominates the ‘market’ for doctoral studies. Also, many commentators (see, for example,  Anna-Lee Saxenian’s book The New Argonauts: Regional Advantage in a Global Economy) have pointed out the seminal role of talented Indian entrepreneurs in Silicon Valley and elsewhere and research links with the US are strong and growing.

There are also quite a number of US tertiary collaborations with India (although surprisingly bearing in mind the respective sizes of their tertiary sectors, not more than the number of UK collaborations). However, the use of ISB as a beacon of attainment highlights the key issue with US-India educational relations and the nuances of policy that the US will need to get right.

goreisb ISB is an exceptional institution, undoubtedly in the top tier of such institutions globally, in terms of how hard they work their students if nothing else! However ISB, with its powerful private sector Governing Board and influential international links (US presidents don’t drop into every management college with a foreign badge on the gate), is not accredited in India by the relevant regulatory body the All India Council for Technical Education (AICTE).

Similarly, the campus of the US Western International University run by the influential Modi family has no official status in India. If pressed, officials will say that it is ‘not legal’.

Australia, New Zealand and UK have a multilateral forum with India on quality assurance, regulation of cross border education and other issues of mutual interest, The US approach thus far has been to lobby for liberalisation of the sector. Alienating the Human Resources Ministry may not matter in trade relations, but it will matter in education and knowledge partnerships.

The report shows little understanding of the education sector. It claims that direct investment in education is not allowed in India. This is not really the case as a recent MoU to establish a campus of Georgia Institute of Technology in Andhra Pradesh (near the ISB) demonstrates. Regulation of foreign provision in India is unclear with the relevant legislation frozen in parliament but accreditation can be achieved. The UK’s Huddersfield University has both invested in, and achieved, official recognition of its joint venture in ‘Hospitality Management’ with the Taj Hotel Group in India.

Similarly, the report claims that the higher education sector is overwhelmingly public which is again not the case. Over 50% of higher education provision in India is private and the vast majority of audiences the US would like to address at secondary level will attend private schools which dominate the urban areas. This brings me to a second point.

The ISB example, while interesting, also misses the point raised, as the main way the US can build an educational relationship with India is claimed to be partnership in meeting the training requirements for India’s large population. ISB and similar Tier 1 institutions will never address this demand with their tiny elite intakes. More relevant are the 1800 engineering colleges with Tier 2 aspirations that are currently achieving less than 30% employability according to the IT industry body Nasscom. Here the community colleges and Tier 2 US institutions could play a bigger role (briefly touched upon in the report). And here, also, the private sector becomes very relevant with the enormous number of Tier 2 private institutions springing up all over India.

Finally, the potential of the partnership is less than fully explored here. The US already has a substantial knowledge partnership with India which transcends the main objective in the report; of helping India to produce its next generation workforce. The complex research and innovation links with US through entrepreneurs and highly qualified graduate technicians and scientists are of immense value to both countries but largely ignored in this report. The overall impression is of a hastily prepared report to encourage the new administration to focus on India.

Many of us have wondered what would happen if the sleeping giant awakes and the US take a more pro-active and coherent approach to its knowledge and education partnership with India.This report may be the alarm clock going off..!!

Tim Gore

Seeking new insights on the ‘Evolving Regulatory Context for Private Education in Emerging Economies’

Discourses on private higher education, and the role of private higher education in spurring on the globalization of higher education process, are emerging in a variety of contexts: informal discussions, classrooms, workshops and conferences, publications, protests, websites, and structured and unstructured policy dialogues.

GlobalHigherEd
is designed to help shed light on where thinking about the construction of new knowledge spaces takes place, and when possible what the content of such thinking is.

ifcbrochureOn the former role, it is worth noting that there are some ongoing on-line deliberations between now and 14 November about the “Evolving Regulatory Context for Private Education in Emerging Economies”. The deliberations are being sponsored by the International Finance Corporation (IFC), and more specifically the IFC’s EdInvest. The IFC is an institution that is part of the World Bank Group. Our brief entry in October (‘”Frontier markets”, the International Finance Corporation, and development’) explains a little more about the IFC, and provides a variety of links to this increasingly important global higher ed institution.

An introduction to the forum can be found here. The general discussion thread can be accessed by following the link along the right margin to Private Education Forum, or by following this link.

Key questions in the discussion include, according to the IFC:

Week 1 – November 3 to 7: What are the major challenges in regulating private education and how might they be overcome?

Week 2 – November 10 to 14: Should government involve private providers in policy and decision making relating to the role of the private sector? If so, what are the most effective mechanisms for doing this? If not, why not?

The online discussion that is underway now is an outcome of an earlier (May 2008) international conference that was attended by a small group of government representatives, accreditation officials, private providers, and World Bank Group officials. According to Svava Bjarnason, Senior Education Specialist of the IFC, the purpose of the May event was to:

begin a dialogue between the various players concerning how the regulatory context is evolving in relation to private sector providers. At the close of that event we agreed to continue the dialogue and to host an online discussion to engage the wider community in the debate.

This two week long dialogue is underway until 14 November so check it out now if you want to contribute.

Apart from the content, it is worth noting that this IFC-sponsored event, like the broader (more ‘open’) national policy dialogues that have been occurring in Australia and the UK (see our entry ‘Higher education policy-making, stake-holder democracy and the economics of attention’), is an experiment in the use of digital technology to facilitate (it is hoped) debate, innovative thinking, and new insights.  Yet as we noted in our previous entry:

new technologies operate within an ‘economy of attention’ – a point well made by Richard Latham in his influential 2006 book The Economics of Attention: Style and Substance in the Age of Information.

Now the essential point Latham is making is that we live in an information economy, and information is not in short supply. In fact, argues Latham, we are “drowning in it”. What is in short supply is ‘attention’! To grab attention, we need stylistic devices and strategies so that what Latham calls ‘stuff’—like debating the future directions for higher education—moves from the periphery to the center of attention.

Thus the IFC’s on-line discussion is worth tuning into and contributing to for obvious content-specific reasons, while the nature of the forum (on-line, open, two weeks long) can also be assessed as a vehicle to enable geographically dispersed voices to engage. The IFC’s hope is, we are guessing, that the discussion enables the generation of some new insights on a topic (the “Evolving Regulatory Context for Private Education in Emerging Economies”) that clearly needs to be thought about, and with considerable care and attention.

Kris Olds & Susan Robertson

Developments in the world of private for-profit global higher ed

The private for-profit global higher ed world generated three news items of note this morning.

First:

LAUREATE EDUCATION, INC. ACQUIRES LEADING UNIVERSITIES IN MEXICO AND COSTA RICA

Baltimore, Maryland, July 8, 2008 – Laureate Education, Inc. today announced it has acquired the Universidad Tecnológica de México (UNITEC), one of the largest private universities in Mexico, and the Universidad Latina and Universidad Americana (UAM) in Costa Rica.

UNITEC has eight campuses throughout Mexico, including six in Mexico City, one in Guadalajara and one in Monterrey. The university has a 40-year tradition of providing higher education throughout the country, and today serves more than 36,000 students….

Universidad Latina, the largest private university in Costa Rica, was founded in 1989 and has more than 16,000 students. The university is widely recognized for its health sciences programs, including medicine and dentistry. UAM, founded in 1997, has more than 4,000 students, and specializes in business education. Combined, the schools have 13 campuses throughout Costa Rica.

Continue reading here

Second:

APOLLO GROUP, INC. APPOINTS STRATEGIC AND FINANCIAL ADVISOR CHARLES B. EDELSTEIN AS NEW CHIEF EXECUTIVE OFFICER

PHOENIX–(BUSINESS WIRE)–July 7, 2008–Apollo Group, Inc. (Nasdaq:APOL) (“Apollo Group,” “Apollo” or “the Company”) today announced the appointment of Charles “Chas” B. Edelstein as Chief Executive Officer and Director, effective August 26, 2008. Apollo’s founder, Dr. John G. Sperling, continues to act as Executive Chairman of the Board of Directors….

Mr. Edelstein, 48, has more than 20 years of experience as a strategic and financial advisor. He joins Apollo Group from Credit Suisse, where he served as a Managing Director and headed the Global Services Group within the Investment Banking Division, as well as the Chicago investment banking office. Mr. Edelstein founded and oversaw Credit Suisse’s leading advisory practice in the education industry, where he served as advisor to many of the largest education companies, including Apollo Group.

Continue reading here

Finally, the Wall Street Journal noted, today, that Marcus Brauchli, the former managing editor of the Wall Street Journal (now owned by Rupert Murdoch) will become the Washington Post’s new executive editor. The formal press release is here.

Why profile this topic? Recall that the Washington Post, despite its iconic status, is effectively being bankrolled by private for-profit global higher ed (aka Kaplan), as we noted in an entry titled ‘Pulitzer Prizes and the global higher ed industry‘. This point is reinforced in the Wall Street Journal:

But the Post has been struggling with the same forces that have devastated the newspaper industry in recent years — defections of readers and advertisers to the Web. Over the past 24 months, the paper’s weekday circulation has dropped 7.1% to 673,180, according to the Audit Bureau of Circulations. Print-ad revenue fell 13% in 2007, according to the Post. While Washington Post Co. has been somewhat insulated from the impact of these changes by its profitable Kaplan education business, the paper has lately taken steps to cut costs. It eliminated more than 100 newsroom positions, bringing the total newsroom count to about 700 from its peak of more than 900 in 2003. Some staffers worry that further cuts are coming.

These three news items are lenses onto three related development patterns:

  • Diversification, dependency, and cross-subsidy via for-profit private higher ed (in the case of Kaplan).
  • The extension of private higher ed networks into new ’emerging market’ geographies via the acquisition of private universities (in the case of Laureate).
  • Financialization, with institutions of for-profit private higher ed reaching into the calculative networks that enable global higher ed value chains to be designed and brought to life (in the case of Apollo).

Given the scale of education services on offer via Laureate, Apollo, and Kaplan – over 2 million students being served right now – these news items and development patterns are worth taking note of.

Kris Olds

Science and the US university: video lecture series by editor-in-chief of Science and former (1980-92) Stanford University president

The Center for Studies in Higher Education at the University of California, Berkeley, is one of the more active centres of its type in North America. They sponsor an excellent working paper series (e.g., see ‘Universities, the US High Tech Advantage, and the Process of Globalization’ by John Aubrey Douglass. CSHE.8.2008 (May 2008)), workshops, seminars, and so on.

This newly posted lecture series, that the CSHE organized, should be of interest to GlobalHigherEd‘s audience. The speaker is Donald Kennedy (pictured to the left), the current editor-in-chief of Science, and former president (1980-1992) of Stanford University, amongst many other titles and responsibilities. The Clark Kerr Lecture Series on the Role of Higher Education in Society has been running since 2001.

I will paste in the CSHE summary of the Kennedy lectures below. The first two lectures were given in November 2007, while the third (and final) lecture was given in March 2008. If you click on any of the three titles you will be brought through to the UCTV site where the recorded videos can be accessed. Kris Olds

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Clark Kerr Lecture Series on the Role of Higher Education in Society sponsored by the Carnegie Corporation and the Center for Studies in Higher Education

Donald Kennedy, Editor-in-Chief, Science Magazine

Science and the University: An Evolutionary Tale, Part 1: The Endless Frontier

In which President Roosevelt asks Vannevar Bush and others,-including may helpers and some revisionists, to transplant the federal governments apparatus for wartime science into the infrastructure for growth of research in the nation’s universities. The result is not what Bush originally hopes — a single Foundation responsible for all of the nation’s science — but it ushers in a period of extraordinary growth and transformation. Universities deal with the challenges of allocating and rebalancing new resources of unexpected scope, but the twenty days after war’s end resource growth flattens and new challenges appear: federal support brings more control, and a new generation has new questions about the value of science.


Science and the University: An Evolutionary Tale, Part 2: Bayh-Dole and Enclosing the Frontier

In which universities, having been partly weaned from federal support, are recognizing new sources of help. Their quest is assisted by a new concern from the government: the money being spent on basic research is producing more prizes then patents. Congress finds a solution: in the Bayh-Dole Amendments of 1980 it forswears collection on intellectual property rights resulting from university research it supports. The result is a dramatic growth in academic centers devoted to patenting and licensing faculty inventions. This brings in new money, accompanied by new challenges: should the university go into business with its faculty? Can it retain equity of treatment across disciplines. Perhaps most significant, had the enclosure of the Endless Frontier created economic property rights that will change the character not only of science but of academic life?

Science and the University: An Evolutionary Tale, Part 3: Science, Security, and Control

In which science and its university proprietors confront a new set of questions. Whether in the later phases of the Cold War or in the early phases of the Terror War, universities find themselves witnessing a replay of the old battle between science, which would prefer to have everything open, and security, which would like to have some of it secret. Struggles in the early 1980’s regarding application of arms control regulations to basic data resulted in some solutions that some hoped would be permanent. But after 9/11 a host of new issues surfaced. Not limited to arms control considerations, the new concerns included the publication of data or methods that might fall into the wrong hands. At the same time, science was confronting a different kind of security problem: instead of being employed to decide policy, science was being manipulated or kept secure in order to justify preferred policy outcomes.

‘Frontier markets’, the International Finance Corporation, and development

The University World News is carrying a report this week on a conference to be held (14-16th May, 2008) in Washington DC, hosted by a less well known outfit in the World Bank Group – the International Finance Corporation (IFC). Better known to most is the IFC’s cousin, the International Bank for Reconstruction and Development, generally referred to as the World Bank.

The conference, titled ‘Investing in the Future: Innovation in Private Education’ will invite participants to discuss what the IFC regards as the significant benefits for developing countries of engaging the (for-profit) private sector in delivering tertiary education.

The IFC is currently the largest multilateral agency funding private education in the world. One way of understanding the difference between the World Bank and the IFC is that while the World Bank finances projects with sovereign guarantees, the IFC finances projects without sovereign guarantees.

In other words, the IFC is primarily active in private sector projects, and in this respect it is a profit-oriented financial institution. Like a bank, IFC lends or invests its own funds and borrowed funds to its customers, and expects to make a sufficient risk-adjusted return on its global portfolio of projects.

Over the past decade, the IFC has taken a keen interest in the education sector. In 2001 the IFC published its Education Sector Strategy (with advice from the Education Sector of the World Bank). According to the IFC, the role of the private sector lies in both the provision and financing of education. This role is expected to grow, with increased pressure for more education as a result of the Education for All initiatives, and as human capital formation is advanced as a result of knowledge economy policies.

From 2000 to 2007, IFC provided $237 million in financing to 37 private education projects in 20 developing countries. The projects had a total value of $839 million.

However, rating agency Standard and Poor’s 2007 Annual Report on the IFC has suggested the most profitable and secure investments are likely to be in the higher education as opposed to the schooling sector.

Its current medium term investment strategy is to open up ‘frontier markets’ in Africa and the Middle East (Standard and Poor’s, 2007).

In an interview with the University World News, IFC Executive Vice-president Lars Thunell is quoted as saying:

Global spending on education has risen substantially over the past decade. There is a demand for more and better services, and governments are embracing private sector participation as a way to increase quality and efficiency. Nowhere is this felt more keenly than in the emerging markets, where demand is presenting significant opportunities.

Claims that for-profit private firms necessarily provide more efficient and better quality services, including in sectors like education is vague, and the evidence provided to date is thin.

However, the more important issue is that, like the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS) (see our recent report on the GATS), the IFC sees education as a ‘frontier market’ in the emerging economies, and is willing to lend funds to investors in order to advance this project. It is also ready to ‘up’ its levels of investment in order to help this project along.

We will likely see more of the IFC as efforts to advance the privatization of education move ahead and developing countries are seen to be ripe for the picking. What is crucial, then, is that we become better informed about actors, like the IFC, and their role in the global governance of higher education. This will enable us to see the very complex way in which this sector is not only developing but is being strategically progressed by actors that are often off the analytical radar of many people and institutions.

Susan Robertson

15 May update: see Inside Higher Ed‘s story ‘The private sector role in global higher education‘ for a report from Day 1 of the conference. See also this report on the conference by World University News.

Pulitzer Prizes and the global higher ed industry

News that the Washington Post‘s excellent journalists just won six Pulitzer Prizes for journalism, including for Public Service, Breaking News Reporting, Investigative Reporting, National Reporting, International Reporting, Feature Writing, and Commentary, should serve to remind GlobalHigherEd‘s readers that the Washington Post Company is being bankrolled by Kaplan, by far the Post’s most profitable unit. Kaplan, for those of you who do not know, is a global education company, with approximately 50% of its revenue derived from the higher ed sector. It serves over 1,000,000 students per year in over 600 locations, and employs 27,000 staff according to Kaplan sources. The numbers below speak for themselves:

And in the Washington Post Company 2007 Annual Report, the company had this to say “to our shareholders”:

At The Washington Post Company, every single one of our businesses has dramatically changed over the past 15 years. In some cases, the changes were for the better.

Fifteen years ago we were accurately described as a media company. Over that time Kaplan has grown into a powerhouse, a multidisciplinary and increasingly international education business unlike any other education company in the world. For the last six months of the year, Kaplan’s revenue was almost half of the company’s, at 49%. Kaplan will continue to grow stronger in 2008. The Washington Post Company is now an education and media company (this isn’t “re-branding”; it’s reality), and the accent on education could get a lot stronger in the future.

On the media side, the financial and operational results at Cable ONE have been exceptional. Profits have bounded up during years when not all cable companies have performed as well. Customer service is at an all-time high in an industry not known for that quality.

Elsewhere in the company, the news is not as good.

This is a further sign of the increasingly significant role of private for-profit education at a global scale, and how higher education companies are perceived to be partial counter-cyclical mediators for revenue and profitability. However such trends cannot help but lead to the reallocation of capital away from the media (even despite such prestigious prizes), and towards education, at an intra-firm level.

Kris Olds

Apollo Group fined for aggressive recruiting practices

Recruiting students in the global higher education marketplace is a tough business. Clearly, however, some universities are seen as overstepping the bounds of what is acceptable practice and for that have been the subject of criticism by regulatory authorities.

Today the Chronicle of Higher Education reported that Arizona’s federal jury had fined the Apollo Group, the parent company of The University of Phoenix, for withholding this report criticizing the Group’s aggressive recruiting practices. The jury ruled that by withholding the report, the Apollo group were misleading the shareholders, and ordered them to pay $280 million.

Ouch!

Susan Robertson


Benchmarking ‘the international student experience’

GlobalHigherEd has carried quite a few entries on benchmarking practices in the higher education sector over the past few month – the ‘world class’ university, the OECD innovation scoreboards, the World Bank’s Knowledge Assessment Methodology, Programme of International Student Assessment, and so on.

University World News this week have just reported on an interesting new development in international benchmarking practices – at least for the UK – suggesting, too, that the benchmarking machinery/industry is itself big business and likely to grow.

According to the University World News, the International Graduate Insight Group (or i-graduate) last week unveiled a study in the UK to:

…compare the expectations and actual experiences of both British and foreign students at all levels of higher education across the country. The Welsh Student Barometer will gather the opinions of up to 60,000 students across 10 Welsh universities and colleges. i-graduate will benchmark the results of the survey so that each university can see how its ability to match student expectations with other groupings of institutions, not only in Wales but also the rest of the world.

i-graduate markets itself as:

an independent benchmarking and research service, delivering comparative insights for the education sector worldwide: your finger on the pulse of student and stakeholder opinion.

We deliver an advanced range of dedicated market research and consultancy services for the education sector. The i-graduate network brings international insight, risk assessment and reassurance across strategy and planning, recruitment, delivery and relationship management.

i-graduate.jpg i-graduate have clearly been busy amassing information on ‘the international student experience’. It has collected responses from more than 100,000 students from over 90 countries by its International Student Barometer (ISB)- which they describe as the first truly global benchmark of the student experience. This information is packaged up (for a price) in multiple ways for different audiences, including leading UK universities. According to -i-graduate, the ISB is:

a risk management tool, enabling you to track expectations against the experiences of international students. The ISB isolates the key drivers of international student satisfaction and establishes the relative importance of each – as seen through the eyes of your students. The insight will tell you how expectations and experience affect their loyalty, their likelihood to endorse and the extent to which they would actively encourage or deter others.

Indexes like this, either providing information about one’s location in the hierarchy or as strategic information on brand loyalty, acts as a kind of disciplining and directing practice.

Those firms producing these indexes and barometers, like i-graduate, are also in reality packaging particular kinds of ‘knowledge’ about the sector and selling in the sector. In a recent seminar ESRC-funded seminar series on Changing Cultures of Competitiveness, Dr. Ngai-Ling Sum described these firms as brokering a ‘knowledge brand’ – a trade-marked, for a price, bundle of strategies/tools and insights intended to alter an individual’s, institution’s or nation’s practices, in turn leading to greater competitiveness – a phenomenon she tags to practices that are involved in producing the Knowledge-Based Economy (KBE).

It will be interesting to look more closely at, and report in a future blog on, what the barometer is measuring. For it is the specific socio-economic and political content of these indexes and barometers, as well as the disciplining and directing practices involved, which are important for understanding the direction of global higher education.

Susan Robertson

The Global Colloquium of University Presidents: events for global challenges?

University presidents (or their equivalents – vice-chancellors, rectors), especially those associated with universities that seek to be at the forefront of the internationalization/globalization agenda, are searching for suitable mechanisms to make their voices heard, create momentum for change, and generate discursive effects at a wide variety of scales. In other words university presidents seek material change (e.g., enhanced understanding of issue X; new initiatives to address problem Y) but they also seek to use such mechanisms to create positive publicity for their university (under their stewardship) as leaders at a global scale. Leadership at the local, state/provincial, and national scales is no longer enough for ambitious university presidents. Thus a rescaling process is taking place with an enhanced emphasis on the global, with universities as seeking to act as global actors and university presidents seeking to act as global leaders. In some ways this is nothing new, as the experience of colonial university vice-chancellors and rectors demonstrated. Such people acted as the interlocutors between the colonizer and the colonized; the soft administrative infrastructure and centres of calculation that enabled colonial networks to be extended over space. This said times have changed, and it is interesting to see what forms of action are emerging in the contemporary era, where these forms of action are initiated, where they take place, and what the underlying objectives are.

International university consortia and associations are one key mechanism, be they inclusive or exclusive. One example of the inclusive is the very active Paris-based International Association of Universities/Association Internationale des Universités, which has 570 members. The IAU/AIU runs or sponsors numerous events that bring together senior university officials, including presidents, to discuss and debate issues of global relevance. As Lily Kong also noted on 7 October, international consortia such as the Worldwide Universities Network (WUN), or the International Association of Research Universities (IARU) also create events (many of which are of an annual nature) that bring together senior officials, usually university presidents, to discuss issues. They sometimes focus on substantive issues, such as at the recent Realising the Global University conference, though many of such events tend to be focused on consortia governance matters.

Regular and ad-hoc groupings of university presidents are also brought together by national councils and associations but their ambit is national in scope is therefore limited by statute, in general.

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In this context, the third annual Global Colloquium of University Presidents took place at New York University (NYU) a few weeks ago. The first two of these events were held at Columbia University (2005), and Princeton University (2006). A core group of university presidents (Amy Gutmann, University of Pennsylvania; John Sexton, NYU; Lee Bollinger, Columbia University; Richard Levin, Yale University; Neil Rudenstine, president emeritus of Harvard University; and Shirley Tilghman, Princeton University) are the formal sponsors of the Global Colloquium of University Presidents.

Each colloquium explores two issues: “universities and their role in society, and a specific public policy challenge”, though the themes of discussion vary from year to year, with the assumption that the university president in attendance will draw upon expert resources (and one representative) out of his/her institution. The themes associated with the first three Global Colloquium of University Presidents have been:

  • 2005: “International migration, a key element of globalization” and “academic freedom, a crucial foundation of university research and teaching”
  • 2006: “The social benefits of the research university in the 21st century” and “innovative sources of funding for public goods”
  • 2007: “The role of universities in relation to climate change” and “setting the post-Kyoto agenda for climate policy”

A significant part of the rationale is to provide an annual forum where the Secretary General of the United Nations, and some of his staff, can benefit from the dialogue and discussion that takes place. As Kofi Annan, then Secretary-General of the UN, put it in 2005:

One of the first speeches I gave on taking office as Secretary-General was to a distinguished group of university presidents from around the world. From the outset, I was convinced that universities would be tremendously important partners of the United Nations. And so it has been. As educators, as repositories and creators of knowledge, as people deeply involved in helping the world address the issues of our times, your role has been vital. This colloquium is yet another example of the productive ties we have developed over the years, and I hope it will become a tradition.

The third Global Colloquium of University Presidents appears to have drawn in a larger and more diverse set of university presidents, as the attendee list demonstrates (Bangkok University, Columbia University, El Colegio de México, Fudan University, Harvard Universit, Hebrew University of Jerusalem, Indian Institute of Technology, Karagpur, Institut d’Etudes Politiques de Paris-Sciences Po, Jawaharlal Nehru University, Kyoto University, Makerere University, New York University, Pontifical Catholic, University of Rio de Janiero, Princeton University, Seoul National University, Tsinghua University, University of Amsterdam, University of Botswana, University of British Columbia,, University of Dhaka, University of Oxford, University of Pennsylvania, University of São Paulo, University of Tokyo, Yale University). It also drew in the new Secretary General (Ban Ki-moon), with Bill Clinton as a guest speaker this particular year (hard to imagine GWB as a guest speaker in future years…). NYU is, as we have noted, pushing the boundaries with respect to the globalization process so this event would clearly have been viewed as a complement to action on other levels for this institution.

gcupreception.jpgAre these events more than networking opportunities? It is difficult to say at this stage. Is, for example, the cumulative knowledge base of all of these universities regarding climate change evident in the position papers available here and here (with late stragglers consigned to the late download site here)? Or are the position papers mere leaders to bridge scholars in a president’s university to relevant UN units?

I can’t answer these questions, nor will I pose more that could be asked. But what I can say is that we at GlobalHigherEd have noticed a restlessness as universities (and select university leaders) seek to identify what networks and scales to focus their activities and contributions on, and how to frame their identities (and their brand names). All universities are embedded, placed, grounded; they have territorially specific responsibilities to the societies that they depend upon and (hopefully) nurture. But how to blend these responsibilities with supra-national responsibilities and objectives is becoming a conceptual and strategic challenge. Are temporary or regular fora such as the Global Public University, the Globally Engaged Institution, and the Global Colloquium of University Presidents the answer? Or are member-only international consortia of universities the answer given their capacity to offer sustained dialogue? Or is active and sustained leadership via a body like the International Association of Universities/Association Internationale des Universités the answer? There are numerous other options, many of which have not been discussed or indeed even invented yet. The point is that we are only at the early stages of thinking through what role universities, and university presidents, should be doing with their limited time and resources so as to address pressing process-oriented challenges that cut across the divisions that so artificially constrain truly global analyses and the formulation of associated solutions. If universities are to become genuine global actors, then more sustained thinking, and acting, on an intra-organizational level, is required. But we also need a broader global view, with an eye to creating a more effective and inclusive global landscape of options that is appropriate for universities and their leaders.

Kris Olds

Update: The next Global Colloquium of University Presidents is being held at Yale University in January 2010. Link here for the press release.

Xi’an Jiaotong-Liverpool University and Liverpool International College

As has been noted recently in GlobalHigherEd (link here, here, and here), a number of educational institutions in the UK, including the University of Nottingham and the University of Liverpool, are forging relatively deep linkages with China. In this context I interviewed Kelvin Everest, former Pro-Vice-Chancellor and current Deputy Vice-Chancellor of the University of Liverpool, about the university’s venture in China.

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Xi’an Jiaotong-Liverpool University (XJTLU), located in Suzhou in China, opened its doors in September 2006 to approximately 160 students. Second year intake of students was 570, with an expected 900 for 2008. Currently, the university offers degree programmes in only four subjects: electrical engineering, computer science, financial mathematics and a combination of one or more of these with management. Four new programmes will begin in 2008, including finance with English and Biological Sciences. Degrees in civic design and town planning will be introduced in the near future. Two new buildings are currently under construction to support the anticipated expansion.

The initiative has involved a close partnership between the University of Liverpool and Xi’an Jiaotong University. The University of Liverpool also partnered with a large private corporation – Laureate Education Inc., based in Baltimore (a private provider of post-secondary education, with an income of $160 million in 2005). Laureate supplies online educational services and also owns a number of private universities around the world, with a global presence (see the figures below from one of Laureate’s Factsheets that is available on their Investor Relations site).

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The company provided the £1mn bond necessary for the University of Liverpool to operate in China. To proceed, the new university required the permission of both the Chinese national government (Ministry of Education) and the provincial government in Suzhou. As the Changing Higher Education blog noted this year, China is clearly on Laureate’s radar screen after using Latin America as its launching pad.

The university is located in China-Singapore Suzhou Industrial Park, which has been built with money from the Singaporean government, as part of Singapore’s attempts to develop an ‘external wing’ of its economy, and embed itself in China. The industrial park is 84 square miles with factories and other facilities but mainly new production plants for huge multinationals – Siemens, Samsung, Volvo, Zanussi and so on – particularly electronic communications and transport. It has been described as a ‘hub’ for foreign investors, including 53 Fortune 500 companies, and reflects the Chinese government’s desire to build ‘local’ R and D capacity. At one corner of the park is the ‘higher education town’ and the plan is to build five or six universities there with connections to other countries. This will then generate a workforce that will populate the science park and partly address the enormous projected demand for skilled graduates in China.

All teaching and assessment at XJTLU is carried out in English – the perceived global language – meeting a widespread demand for English-language skills. However, because it is an ‘independent’ university, XJTLU does not come under the auspices of the UK Quality Assurance Agency for Higher Education and the University of Liverpool will not be directly responsible for quality or standards. The university is run by a board, whose members include the US company Laureate, the Suzhou Industrial Park and the Chinese partner university.

The University of Liverpool is hoping to receive several benefits from this overseas development. In the long run, the University plans to sell various ‘products’ to XJTLU on a consultancy basis (such as curricula, quality assurance mechanisms, staff development experience, and so on). So some income will be generated in this way. However, the main advantage comes from an assured annual influx of Chinese students. Historically, the University of Liverpool has received significant numbers of international students from China studying in the Management School and in engineering and computer sciences. There has been a concern, however, that competition from other universities (especially from expanding HE capacity within China itself) threatens the long term dependability of these flows.

Starting next year, students at XJTLU will complete two years of their degree course in Suzhou followed by 2 years in Liverpool (with reduced international tuition fees). A four-year programme in Suzhou followed by a Masters degree at Liverpool is currently being developed and is attracting much interest. These structures ensure a constant and anticipated influx of Chinese students into the Liverpool university system. Electrical engineering at the University of Liverpool already has 50/50 home/overseas students and the new intake would change the balance to two-thirds overseas. This influx of students would allow the university to sustain itself and to grow as an institution.

The historic and cultural links between China and Liverpool are also deemed important to this development. Liverpool is twinned with Shanghai and has a higher profile in China than it does in Europe. Clearly, this initiative involves a high degree of risk and uncertainty. However, when it comes to China, possibilities would seem to outweigh the risks.

In a separate but related initiative, in May of this year the University of Liverpool announced an agreement with Kaplan Inc., another global educational and career services provider with an annual revenue of nearly $1.7 billion, and emerging interests in both the UK and China. Kaplan, Inc., is a subsidiary of the Washington Post Company. The joint venture between Liverpool and Kaplan will establish an international college located on the campus of the University of Liverpool. The aim is to prepare international students for entry into the University’s undergraduate and graduate degree programmes. Subject to meeting defined academic and English language standards, students who complete their course at Liverpool International College will be eligible for undergraduate and postgraduate degree programmes at the University. Such colleges are already in existence in partnership with the University of Sheffield, the University of Glasgow and Nottingham Trent University.

Johanna Waters