Changing Higher Education

What Moody’s doesn’t say in its recent report on higher education

 Moody’s Investor Service recently put out a report entitled Global Recession and Universities: Funding Strains to Keep Up with Rising Demand. It provides a very interesting and informative view of some aspects of the higher education scene as observed from outside of the system. The report came to my attention through posts in GlobalHigherEd (on whose server the report above resides) and University World News, and I thank both for their nice articles.

Moody has looked at universities at selected areas around the world, and how they are handling the global downturn.  Moody’s ultimate interest, of course, is to be able to rate these universities as they access capital markets, so the focus is on aspects of the environment that can or will impact their financial stability.  I will describe some of their observations that I find most interesting, and then will talk about the part of the report that I find most important - the things that are not said.  I will not try to describe the whole report, but recommend that you simply read the original - it is only 13 pages long. I also will focus on the parts of the report that refer to US universities, since that is the group that I know the best.

As a minor point, the report emphasizes public institutions, stating that public universities “most likely accounting for between 80-90% of all students enrolled in tertiary education.” A recent OECD report claims that private higher education now accounts for 30% of tertiary enrollment globally.  This relatively minor discrepancy does not invalidate any of the conclusions of the report, of course. 

Moody’s notes that recessions generally lead to enrollment increases for a variety of reasons, but warn these increases may not be uniformly distributed:

While enrolment declines are possible at individual institutions due to particular market, reputation, and management challenges, we expect higher education overall to enjoy a significant “tail-wind” in student demand for spaces over time. This is especially likely for universities that are “access” oriented with less restrictive academic requirements and a mission focused onskill development. Many prominent universities that function as comprehensive research institutions focused on maintaining strong academic quality reputations and high entrance standards may see the greatest impact in their advanced degree programs.

On the other hand, Moody makes a strong point regarding fundamental changes in funding:

Moody’s believes that the magnitude of economic changes in some countries may place pressure on historic funding and financing patterns of higher education. This would likely be driven by two conflicting trends– increased policy directives to expand university programs and more limited ability of governments to fund the desired expansion Not surprisingly, many countries now face significant budgetary challenges with large competing demands on government dollars.

While some aspects of spending on higher education have been temporarily boosted through stimulus spending, this is largely financed by government deficits and may be difficult to sustain beyond the near term. At the same time, the desire for rapidly rising investment in higher education to support higher participation rates and expanded research capacity suggests the need for significant new operating and capital dollars over an extended period. These trends may well become clearer as the ability to fund higher education comes under greater pressure.

In  regard to this desire for greater revenues, in the understatement of the year, Moody’s cautions: raising student fees is usually a politically sensitive decision.

For the US, there is a timely warning regarding globalization:

In general, we also believe the level of global competition and pooling of talent for faculty and students will continue to increase. As U.S. universities cut back significantly on hiring and capital spending,  non-U.S. faculty and students may be susceptible to recruitment to
other leading universities or home countries. Over the past three decades, the number of students enrolled outside their country of citizenship has risen dramatically, from 0.6 million worldwide in 1975 to 2.9 million in 2006, a more than four-fold increase. Developments like the Bologna Process in the European Union, and similar efforts in other regions, may further encourage the trend of crossing borders to enroll in higher education.

Overall, Moody’s is looking at financial stability impacts of increasing student demand (good), research funding (good), uncertainty of state funding (bad), conflicting demands for services (mixed), political pressures(bad).  So what is missing?  Actually, it is not so much that something is missing, but that the financial problems and dangers become clearer if one looks at them from a slightly different angle, one that will be familiar to readers of this blog.

First, at universities - both public and private - the cost of providing education is higher than the price paid by the students.  Thus the major difference between the two sectors is how this unmet cost/price deficit is covered. Strong undergraduate student demand is rightly viewed as a positive by Moody’s.  Any drop in undergraduate enrollment generally translates directly into a budget deficit.   In addition, with strong undergraduate demand, institutions have more flexibility in setting their “discount rate”, (net financial aid as a percentage of net published tuition) and in increasing tuition annually . Thus strong demand enables institutions to have a predictable, increasing budget  which minimizes- but does not remove - the structural excess cost per student that must be covered by other sources. 

Secondly, a similar difficulty occurs with research. Moody’s finds it positive for the balance sheet that federal stimulus funding for research is increasing.  However, universities lose money on almost every federal or private research grant that comes in.  Sponsors have for a long time required universities to put up matching funds, and that pressure is growing; construction costs for expensive laboratory buildings are only partially reimbursed even in the best grants; sometimes explicit policies of “non-complete cost recovery” decrease even the recovery of nominally allowed expenses; research faculty able to compete successfully for grants are much more expensive than the norm; the list goes on.  Research is a core part of the mission of research universities, of course, so research grants are eagerly sought - the core mission could not be advanced without them.  However, from a balance sheet perspective, a new grant simply means the institution must find money from another source to cover the costs of the research that are not paid by the sponsor.  Thus, it is positive from the standpoint of mission that stimulus funding for research is increasing, but from the standpoint of balance sheet, it just mean another negative pressure, another unmet structural cost/price deficit to be met from other sources.

The third reality is that the costs of both research and education grow more rapidly than the CPI and it is unlikely that this can be changed in a sustainable way without significantly changing the current models for both. 

Put this together, and the emphasis in looking at financial stability turns to the question of price, and of sources to meet the certain cost/price deficit. In the educational component of the budget, private universities in the US have been successful in constraining growth of the cost/price deficit by increasing price at significantly more than the CPI for several decades. However, as a result of this strategy, the cost of private higher education is increasing faster than family income for 90% of families in the US, the earnings value of a degree compared to its price has been decreasing, and political pressure has been growing steadily to restrain these price increases, perhaps by law. Thus it seems to many observers quite likely that the strategy of annual large price increases will not survive much longer. Any significant constraint on higher- than-CPI tuition increases would greatly increase the cost/price deficit, thus increasing pressure on alternative sources of funding.

On the public side, there are also constraints on raising price resulting from both political pressures and mission concerns(e.g. universal access). Mission obstacles may possibly be overcome by moving to high tuition, high aid models that assure access independent of financial situation. Political obstacles in many cases are likely to be more serious.  Whatever happens in the short run, however, it seems unlikely that public institutions will be allowed to adopt the private university model of yearly above CPI increases, so the pressures on alternative funding will occur here as well.

On the research side, universities seem to have little price leverage. There is little enthusiasm in Washington to increase the indirect costs component of the research cost.  As Moody’s rightly observes: Many universities believe this portion of government support is woefully under-resourced. Similarly, corporations are happy to shop their needs around, looking for the university provider who will set the lowest price. Thus, increasing price of the research component to meet cost seems quite unlikely.

Turning to alternative sources of funding to meet these deficits, we actually find very few that are significant at this time. Primary are the state, and philanthropy.  Moody’s does a good job of describing the significant uncertainties and long term trends in state funding. Suffice it to say that it seems unlikely that the state will rush to the rescue. Moody’s also describes some of the difficulties in increased dependence on philanthropy, focusing on many of the recession related negatives .  There is, however, a large negative that I did not see mentioned: the greatly increased competition for philanthropic dollars. Not only are the public higher education institutions now aggressively seeking philanthropic dollars that previously would have gone to their private peers, but the philanthropic needs of other cultural, health, and welfare organizations have skyrocketed with cutbacks in state spending.  Add to that the new found interest in Europe and Asia in philanthropic support of local higher education and you have another segment of philanthropic resources that is suddenly becoming much more difficult to access.  In brief, I think neither of the two primary sources of the funding for the structural deficits of higher education can be expected to meet the likely increases in those deficits.

If we turn to secondary sources of revenue to meet the cost/price deficit, we find few that are broadly significant. In Australia and England, a strong secondary source of revenue for many institutions is international students, taught both at home and abroad.  For NYU and a few other institutions in the US, continuing education provides significant revenue. For several institutions such as NYU, Columbia, UC, and MIT, IP licensing provides considerable income.  It seems obvious that it will be increasingly critical for institutions of higher education to develop these and other secondary sources if they want to be able to meet their structural core cost/price deficits without harming mission. It is not clear that all will be able to find secondary revenue niches that are sufficiently robust to protect mission.

So overall, I think Moody’s is right in saying that most universities are a pretty good bet from the perspective of being able to repay their debts.  What is much less certain is the fraction of universiiesthat will be able to successfully fulfill their missions at the same time.

 

Is online learning ready to become a disruptive technology?

In 2000, I wrote an article in Change discussing major disruptive impacts on higher education that distance learning might produce (see, How about distance learning, March 3, 2006).  In it, I brashly postulated that:

The experience will certainly be different from that found in the classroom of a great teacher, but in the end DL may well provide a competitive or even superior way to learn.

A recent analysis by the Department of Education of learning outcomes achieved by various on-line learning courses compared to those of traditional courses finds that my “in the end” may actually be now!

The DoE identified over a thousand empirical studies of online learning between 1996 and 2007. From these studies, they chose a set to subject to meta- analysis with the goal of answering 4 research questions:

1. How does the effectiveness of online learning compare with that of face-to-face instruction?
2. Does supplementing face-to-face instruction with online instruction enhance learning?
3.. What practices are associated with more effective online learning?
4. What conditions influence the effectiveness of online learning?

The analysis selected from all of the empirical studies using three stringent conditions:

Limit the search to studies of Web-based instruction (i.e., eliminating studies of video- and audio-based telecourses or stand-alone, computer-based instruction);
Include only studies with random-assignment or controlled quasi-experimental designs; and Examine effects only for objective measures of student learning (e.g., discarding effects for student or teacher perceptions of learning or course quality, student affect, etc.).

The results of the meta analysis are both impressive and thought provoking :

•    Students who took all or part of their class online performed better, on average, than those taking the same course through traditional face-to-face instruction.
•    Instruction combining online and face-to-face elements had a larger advantage relative to purely face-to-face instruction than did purely online instruction.
•    Studies in which learners in the online condition spent more time on task than students in the face-to-face condition found a greater benefit for online learning
•    Most of the variations in the way in which different studies implemented online learning did not affect student learning outcomes significantly
•    The effectiveness of online learning approaches appears quite broad across different content and learner types
•    Effect sizes were larger for studies in which the online and face-to-face conditions varied in terms of curriculum materials and aspects of instructional approach in addition to the medium of instruction

New on the for-profit higher education front

Apollo Global announced on April 29 that they are in discussions with BPP Professional Education, with an eye toward a possible purchase (for background, see my earlier report on Apollo's international activities). BPP Professional Education teaches a variety of professional development courses in areas such as accounting, finance, law, etc. The web site describes teaching centers in 11 countries (plus the UK), and many programs are also taught using distance learning. More notably, however, BPP contains the BPP College of Professional Studies, which in September 2007, became the first publicly owned private company in the UK to be awarded degree granting  powers.  The College is composed of a business school, and a law school. Should the discussions lead to a purchase, the price is estimated to be around $460M US.

On the home front, many smaller non-profit colleges have been struggling for years with declining enrollment, and increasing debt.  The current economic downturn is providing the "last straw" for some of them, and they are finding that the only practical solution is to be absorbed by a well-funded for-profit higher education corporation. In the past few weeks, Daniel Webster College, the College of Santa Fe, and Waldorf College have all taken steps in that direction.

On the 24th of April, Daniel Webster College announced that it had sold itself to ITT Educational Services.   Daniel Webster is located in Nashua, NH, and has about 1000 students, 750 of them residential. According to an article in the Nashua Telegraph, Daniel Webster had been considering a sale for several years because of financial difficulties.  According to this article:

Daniel Webster College President Robert "Skip" Myers said ITT has plans to eventually expand Daniel Webster into a regional and then national brand of schools.......
Daniel Webster College will remain autonomous from any of ITT's technology-oriented programs, with the faculty continuing to run academics and complete separation, Myers said. The name will remain except for a minor alteration: After the sale, it will be eventually known as Daniel Webster University. Distinction as a university will allow Daniel Webster College to not only increase students and faculty on the Nashua campus, but it would fit with the school's and ITT's goal to offer a "learning network" that will stretch across New England and eventually the country, Myers said.

This would be an interesting new strategy for ITT should it come about.

The College of Santa Fe has also been running a large deficit for considerable time. The College has only about 800 full-time students, and discussions with other non-profits regarding mergers,etc. had not worked out. Over a year ago, the College of Santa Fe entered into discussions with Laureate Education about a sale (see my earlier report on Laureate's move into the US).   Laureate was interested, but negotiations with creditors over existing debt apparently did not go well, so Laureate seemingly dropped out of contention. In December, it appeared that New Mexico Highlands University might take over the College, although there seemed to be no idea of where the necessary resources might come from.  The newspaper article describing the Highlands bid also stated that the faculty of the College had "surrendered" tenure "in order to court the for-profit education corporation, Laureate."  However, on May 1, Laureate rose like the Phoenix, and New Mexico Governor Bill Richardson announced a partnership between the State of New Mexico, the City of Santa Fe, and Laureate to "Save College of Santa Fe": 

The partnership envisions the City of Santa Fe, with support from the Governor’s Office, purchasing the college and then Laureate operating the college under a lease.

The Governor has pledged $11M to the deal. Even better of Laureate, the Governor has pledged his support in negotiating with creditors to bring the existing debt down to manageable levels.  So there is a reasonable chance that the College of Santa Fe will soon join the Laureate International Network.

Another sad story about outcomes assessment

Kevin Carey has written a number of very compelling articles relating to the use of outcomes measures in higher education(see Educational value added, Sept.1, 2006) .  One of his more recent was an op-ed, Blocking Public Comparisons Obstructs Knowledge, Too, in the Chronicle of Higher Education.   His “case study” for this article is the State University of New York at Buffalo, which apparently is suffering mightily from the economic downturn.  The President, John B. Simpson is turning to the legislature for both increased aid, and the ability to raise tuition.  However, as Carey points out:

Yet even as the SUNY system lurches toward financial crisis, it has squandered a golden opportunity to make its case to the taxpayers and their elected representatives, to demonstrate success in doing what the majority of those people care most about: helping students learn. By refusing to provide public, comparable measures of student-learning results, New York's great public-university system has sown the seeds of long-term marginalization. In that, too, it has plenty of company nationwide.

The situation facing President Simpson is particularly difficult because in 2003 the SUNY Trustees passed a resolution calling on the SUNY system to come up with uniform “before-after”measures of student attainment of general education goals. In other words, value added measures in the core area of general education.

What Carey describes as happening after that is not surprising -nor is it the type of response that is limited to the SUNY system:     

But in the year following the resolution, SUNY leadership was subjected to intense pressure from New York's Faculty Senate and other interest groups opposed to the plan. As a result, SUNY put in place a watered-down scheme in 2004. Value-added estimates of learning growth were no longer required. Instead of common systemwide measures, every university would choose its own standards, tests, and sampling procedures, making institutional comparisons difficult. They would also be made impossible because campus-specific data would be "used for confidential in-house discussions." The results, it was stressed, should never be used to "punish, publicly compare or embarrass faculty, courses, programs, departments, or institutions either individually or collectively.

Unfortunately, as Carey points out, even the resulting hodgepodge of measures contained some embarrassing results for specific programs, so additional efforts were required to water down the program.  He reports that a system task force studying implementation of the assessment program stated:

Institutions responded very strongly against the requirement that institutions must report to System Administration the percentage of students who 'exceed, meet, approach, or fail to meet standards

Can for-profit education save the free press?

The Washington Post Company has just released its 2008 earnings report.  The Washington Post and Newsweek, like most other print media, are having financial difficulties under the two pronged attack of the digital revolution and the severe downturn in the economy.  The two had an operating loss of about $212 M in 2008, compared to an operating income of about $190M in 2007 .  The television broadcasting division also saw decreasing operating income (-13%), but still had a substantial positive contribution of  $123M to the company’s bottom line. On the traditional communications business side of the leger, the big winner was the cable television division, which achieved an operating income of $162M, or a 31% increase above 2007.

The most profitable and fastest growing division of the Washington Post Company was its division that has little to do with communication in the traditional sense - Kaplan.  Kaplan’s operating income was $206M, up 38% from 2007.  Education almost covered the loses of the company’s flagship print divisions!  

Unfortunately, the print divisions are losing ground faster than the education division can grow, so this rough balance is unlikely to persist unless the print divisions can make a major turn-around.  Thus, the answer to the question of the title of this post is probably “no”, at least insofar as the question relates to the Washington Post Company. However, the Kaplan division is obviously going to be a major component of the Company’s attempts to find a solution to its problems. 

The other information that can be gleaned from this is that at least one company in the for-profit education field is growing rapidly in these difficult times. Maybe every corporation should have a for-profit education arm?

A major contribution to our understanding of for-profit higher education

As I went over the not-done parts of my “to do” list from 2008, I found that I had never gotten around to a post about an excellent book on for-profit higher education written by two of my USC colleagues, Bill Tierney and Gib Hentschke.  So although it is a year late - I want to comment on what is now not -so-new, but still excellent New Players, Different Game: Understanding the Rise of For-Profit Colleges and Universities, by William G. Tierney and Guilbert C. Hentschke.

Few issues in higher education produce more heat than the role of for-profit higher education.  Extreme positions abound, generally based on statements of high principle that are only marginally related to real conditions.  Rational discussions based on reality and facts are hard to find.   In this charged atmosphere, Tierney and Hentschke (T&H) have done an excellent job of providing an even-handed, broadly ranging discussion of for-profit higher education that is based on real data involving both for-profit and non-profit worlds of higher education
.
T&H begin by boldly stating on page 1 that “for-profit institutions represent a new, fundamentally distinct type of postsecondary education.” They then spend the next 200 pages comparing and contrasting the for-profit colleges and universities (FPCUs) with traditional non-profit colleges and universities (TCUs).  They look at customers, organization and governance, aspirations and missions, outcomes, etc. They describe strengths and weaknesses of each system with respect to a variety of  viewpoints and policy perspectives.  Importantly, throughout the book, T&H remind us that there is not “a” model either for FPCUs or for TCUs.  Rather, each system is notable for its considerable diversity in most of the parameters that they consider.

Along the way, they invoke Clayton Christensen’s powerful theory of disruptive technologies  to consider ongoing change within the TCUs as compared to the innovations being produced by the FPCUs.  In this context, T&H pose the theme for their work: “The question, then, is not simply whether for-profits are at work inventing and implementing disruptive technologies, but how these technologies will be manipulated and used in advancing a postsecondary education.” 

In order to answer this question, T&H consider the changing environment for higher education generally, and ways in which some of these changes have favored the for-profit sector. They provide solid data on growth in the for-profit sector - types of students, types of programs, degrees and certificates, revenues, etc.  They also look closely at differences in governance and finance between the two sectors, and how these differences drive many of the external aspects of the sectors. Important questions of  public policy relating to differing possible outcomes of higher education are raised and discussed at some length. 

The final chapter reinforces the five themes that have run through the book and that the authors believe will frame postsecondary education in the coming decades: the changing environment for higher education generally; innovation in higher education; issues of delivery and content; increasing amalgamation of cultures due to blurring borders between the FPCU and TCU sectors; and increasing differentiation between individual institutions.

Overall, this is an outstanding and, in many ways pathbreaking, contribution to our understanding of the ongoing evolution of postsecondary education in the United States.  I recommend it to all who are interested in more fully understanding the for-profit higher education sector.

Laureate keeps on building a global brand

Doug Becker, the CEO and Chairman of Laureate, has done a masterful job of inventing a truly global university.  He and his excellent team have built a very visible, positive global brand for Laureate, one that depends on more than their many campuses spread around the world.  He has understood the importance to his brand of working with international public agencies such as the World Bank, and having a visible presence at international meetings on higher education.  

This photo captures perfectly one of Becker's more recent steps in global brand building.  At the December 3, 2008 the Clinton Global Initiative Asia Meeting, Becker announced an international scholarship initiative for deserving teachers around the world to enable them to get an advanced degree in  education, business, or information technology. Laureate will award 1,000 scholarships in this program, which is named in honor of Richard W. Riley, former U.S. Secretary of Education during the Clinton Administration.  The scholarships will be to attend institutions in the Laureate International Universities network.  Because the network has universities in 20 countries, this program likely will both be widely visible internationally, and have local impact in areas where the awardees teach. Of course, because the network is so large and well developed, the marginal cost to Laureate of these scholarships will be small. Other competitors -all smaller- would have difficulty in getting such a beneficial impact/cost from a similar brand-building effort.  Another example showing that size matters, and Becker and his team are working hard to capture first-mover advantage in the field of global higher education .

New global higher education activities by the Apollo and Carlyle Groups

 

A little over a year ago, I noted that the Apollo Group (parent of the University of Phoenix) was partnering with the global investment firm Carlyle Group to form a joint education venture called Apollo Global.  At the time of the post, it was not at all clear what the strategy of Apollo Global would follow, although some analysts had suggested that it might be similar to that of Laureate.  So it clearly is time for an update on Apollo Global, and in the process, on the educational ventures of the Carlyle Group

On Feb 28, 2008, Apollo announced that Apollo Global had made its first move by agreeing to purchase a university in Chile:

Universidad de Artes, Ciencias y Comunicacion ("UNIACC"), an accredited, private arts and communications university in Chile, as well as its related entities. This includes the Instituto Superior de Artes y Ciencias de la Comunicacion, S.A. ("IACC"), the first online autonomous professional institute in the country which was founded in 1981.UNIACC, founded in 1989 and based in Santiago, Chile, has over 3,000 students and three campuses.....
UNIACC is one of the leading arts and communications universities in Latin America and is renowned for its high-profile faculty and state-of-the-art technology. Accredited by the Chilean Council of Higher Education, UNIACC offers 18 bachelor's and two master's programs. In 2004, UNIACC became the first university in Chile to teach a fully online undergraduate program, and today offers six fully online and one blended program, mainly serving the needs of working adults.

Earlier, in September 2005, The Carlyle Group bought a majority participation in a private university in Mexico, Universidad Latinoamericana, S.C. (ULA).  The Carlyle website indicates that in November 2006, it purchased the remainder of ULA. Finally, in August, 2008, Carlyle moved some of its ULA holdings "from one pocket to the other", when it sold 65% of ULA to Apollo Global (which it owns in part), retaining a 35% holding directly.  This then gave Apollo Global a majority stake in a Mexican university, ULA:

Founded in 1975, ULA is renowned for its dentistry, medicine and communications programs accredited by the Ministry of Public Education (Secretaría de Educación Publica, SEP) in Mexico. ULA carries authorization from the National Autonomous University of Mexico (Universidad Nacional Autónoma de México, UNAM) for its high school and undergraduate psychology and law programs. With four campuses throughout Mexico, including two in Mexico City, one in Tlalnepantla de Baz, and a fourth in the city of Cuernavaca, ULA offers 27 degree programs and has more than 4,000 students.

Thus over the past year,  Apollo Global has established a presence in both Chile and Mexico, and has done so following Laureate’s approach of purchasing existing institutions.  Of course, Laureate already has a very large presence in both Chile and Mexico - and around the world.  It will be interesting to see what Apollo Global does in the future to differentiate its strategy from that of Laureate - and to provide more substantive competition to Laureate globally.  Will Apollo Global make some use of the enormously successful model developed by its sibling the University of Phoenix as it moves forward?

Meanwhile, The Carlyle Group has made a new investment in global higher education. On November 27, 2008, it  announced a $50M (US) investment in Hao Yue Education Group, a prominent Chinese provider of private higher-education.:

Hao Yue was founded in 1997 by Mr. Zhou Jiting and his team. Since then, its flagship school has grown to more than 30,000 students with two campuses in Beijing and more than 200 hectares of campus area. It is now one of China’s largest private universities based on student enrollment, campus area and registered capital. There are more than 1,500 full time teachers among the nearly 30 secondary colleges and schools under the school, offering more than 130 majors....
The business model of Hao Yue’s university puts career training and development at the core of its service proposition, offering a career-oriented curriculum that equips its students with strong practical skills and puts them in touch with a wide employer network. It emphasizes internships for students to gain proper pre-employment training. During the last few years, Hao Yue’s university graduates have enjoyed a high employment rate of approximately 80%.

The announcement acknowledges the “global market turmoil”, but describes China’s education sector as “resilient”. It is nice to know that a group with money is still bullish on higher education!

The US is once again attracting large numbers of international students!! Right?

The Institute of International Education (IIE) recently released  its annual Open Doors report on the number of international students in the US.  The press release for the report is headlined

INTERNATIONAL STUDENTS ON U.S. CAMPUSES AT ALL-TIME HIGH

Total foreign student numbers up 7%; New enrollments up 10%

That sound like good news! We are finally coming back from the post 9/11 drop off in international students. US higher education has once again regained its allure!

Or has it?

Included in these numbers are a couple of interesting categories.   The first is enrollment in  “non-degree programs”, primarily intensive English.  The second is “Optional Practical Training” (OPT). This enables undergraduate and graduate students with an F-1 student visa to work for periods up to one year in temporary employment directly related to their major fields of study.  The one-year period has recently been extended for students in the STEM areas, and provisions have been loosened for cases in which an employer has requested a H-1B visa for the student. 

When we look at the numbers, we find that the total number of international undergraduates is up this year by a relatively modest 4.6%, the total number of international graduates, by similarly modest 4.8%.  The real growth is in the non-degree students, 20.1%, and OPT, a whopping 36.3%.  We should, of course, be delighted for a variety of reasons to see these latter two categories grow.  However, they do not relate to the comparative attractiveness of our core higher education offerings.  And growth in OPT, because the rules are rapidly changing, is difficult to evaluate. 

Similarly, if we look at the vaunted new enrollment growth  (where OPT is not considered) number of 10%, we find a similar breakdown.  That is,  UG first year international undergrads are up 7.0%, grads, 7.9%, and non-degree students, 27.7%.

However, the real question is, “how are we doing compared to everyone else?”  I don’t find any up-to-date global data to compare to the US IIE results for 2008.  The most recent OECD report, Education at a Glance 2008, contains data on transnational education only up through 2006.  That report shows that for the period 2000-2006, the number of students enrolled in higher education outside of their country of origin grew on the average at 7.5% per year (Table C3.6).  During that period, the US share of all transnational students fell from 25.1% to 20% (Table C3.7). 

The  foreign student numbers reported in Open Doors that should be compared to the OECD data (UG, G, and non-degree) show a growth of only 4.8%. However, if growth in transnational students has continued at the 7.5% rate, then the IIE numbers would suggest that our share of the transnational market has continued to decline. 

So the good news would seem to be that we are getting more international students than we did a few years ago - and the bad news would seem to be that the increases are probably not keeping up with global growth in transnational students.

An Asian "Bologna Process" moves forward

The ten  countries of the Association of Southeast Asian Nations (ASEAN) have begun to discuss  the creation of an Bologna -type process in their region.   The Southeast Asian Ministers of Education Organization (SEAMEO) organized a meeting in Thailand in early November, 2008, to begin to consider the challenges and opportunities that could be provided by a harmonization of higher education in Southeast Asia. 

Prof. Dr. Supachai Yavaprabhas, the Director of SEAMEO RIHED, the organization’s Center for Higher Education and Development, had spoken earlier at a UNESCO regional conference about harmonization in the ASEAN region.  In his speech, he outlined the history of higher education cooperation in the region, and described some of the aspirations behind this cooperation.  They are quite parallel to those that can be found in the  Bologna accords: to promote higher education quality, and to build ASEAN identity through free movement of scholars around the region.  In 2007, the leadership of the region agreed that the focus should be on five areas:

a) ASEAN Quality Framework and Curriculum Development;
b) Student Mobility;
c) Leadership;
d) E-learning and Mobile learning; and
e) ASEAN Research Clusters

Dr Yavaprabhas also discussed the very uneven levels of quality assurance mechanisms currently in place in the various ASEAN nations.

The November meeting was based on preliminary reports on prospects for harmonization prepared by representatives from Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. The meeting itself has been described in the Australian and University World News.

Clearly, creating the desired “higher education common space” in the ASEAN region will be very difficult.  The countries vary considerably in the level and organization of their systems of higher education, and most are developing nations with relatively limited resources.  Nevertheless, the potential payoff could be enormous, and would greatly increase the ability of the region to compete effectively in the knowledge-based world of globalization . 

ASEAN has set 2015 as the target year for the creation of this higher education common space.  Just as Bologna has found that its original targets were too optimistic, ASEAN will certainly find that this target cannot be realistically attained.  However, there will be major benefits to the region from every successful step taken along the path to a functioning regional higher education common space.