2012 is set to be a defining year for private sector colleges in the UK. To start with, most of them will disappear. Traditionally, the sector thrived on international students: They charged one-third of the fees that an university will charge the international students, and weened away the market from them. But the UK government effectively killed this market, for now. A set of abrupt changes in the student visa regime, whose burden fell disproportionately on the private colleges, have deeply affected the market. Many private colleges have already found it impossible to keep going and folded: Others have been out in the market in search of a buyer, and holding on to find one. The Private Equity players are out in the market buying private colleges on the cheap, with a strategy of bundling them together and selling these on when the 'real' payday for private sector education - predicted to be around 2015 - comes.
This change is good in a way. At the end of this cycle, the ownership and management structures of the industry will certainly change. The owner-operator would give way to the professional manager, and relationships will mostly be replaced by rules: Just like the universities. The unsavoury corners of the sector - the visa colleges - will possibly close, or morph into something else. The prices will generally rise, as the new Private Equity owners will demand, and the operating practises will become just like the universities, as the new regulatory regime will demand and impose.
Some of the colleges that survive this year in their current form, as the bigger ones possibly will, must choose their strategy carefully. While the profile of the sector will generally rise and student confidence will be regained, being like the universities may not be the smartest thing to do for a private college. They exist for a purpose - that of offering education in the under-served market segments - and they would need to stick to that. This will need will and innovation, and strategies that go beyond copy-and-paste, and sticking to their original purpose.
Which goes beyond making money, as would be generally suspected. There are at least two other motives plainly visible among the college owners: First, many of them came from a teaching background and wanted to do better teaching within an environment they create and control, and second, they came from an ethnic minority background and wanted to meet the specific needs of their communities, often of the ones back home. Indeed, an university reviewer may complain that these colleges didn't do any research, but they were not meant to do that anyway and this does not necessarily make a private college education meaningless. The cacophony of dialects in these classrooms, and predominance of alien faces in the corridors only indicate an opportunity, not the existence of something illegal.
Even in this difficult environment, the surviving private colleges must remember these 'founding principles' if it could be called that. They may have been less articulate in general, but the more successful private colleges were based on the belief that 'extraordinary possibilities exist in ordinary people'. One risk of trying to follow the universities too closely is to get into the 'ranking creep', an ever-upward spiral of cost and selectivity that may make private colleges irrelevant. The pressures to fall into this trap will be enormous: The reviewing agencies will demand it, the accrediting universities, somewhat jealous of the success of private colleges, will try to impose it, and the existing stereotypes of higher education will mandate it. However, the ideas of good teaching, open access and groundedness in community as appropriate in the global era may sound alien to public universities, whose values have changed because of the tyranny of the funding bureaucracies, but they have been consistent and universal requirements for successful independent colleges through the ages. It will only be common sense for the UK private colleges to stick to this even when everything changes around them.
This will be worth it, because, despite the current mood, the market is not going to disappear. The Tory government has put ideology ahead of common sense - as governments usually do - but common sense always wins in the end. This is a rapidly globalised world, where consumption is being driven by Asian consumers: Closing British Education to them is equivalent to banning them from shopping in Oxford Circus. And, the British universities, run by executives who are adept at playing the perks-and-privileges game with government bureaucrats, have no sense of the changing international markets: For most of them, it means an annual trip to exotic places, and a mid-afternoon shopping trip in search of cheap deals. To them, international students are the faceless undemanding lot, who pays an exorbitant fee just for the privilege of being taught by an Anglo-Saxon professor. In summary, despite their numerical success (64% growth in the last decade and expansion of outreach facilities), they have served the privileged classes, and want to continue to do so. They are oblivious that there is another market, a fast-growing and huge one, where the manners and dress sense of the prospective pupils are less refined, English scratchier, and qualifications less than pristine, but which is not short in aspiration, ability to hard work or in the will to win the world. These students are not going to go away anywhere, and the Private colleges will find a way to continue to serve them.
Indeed, the private colleges will have to change their strategy, and surely they will. There are a number of things these college owners are planning or talking about.
First, there is increasing talk about effective association and self-regulation. This will soon happen: With the 'bogus' colleges being forced out of the sector, this is becoming easier to achieve. This may happen towards the end of the year, when the survivors and losers have been sorted out. However, this will go beyond what seems to be the holy grail of quality systems at this time, confidence from Quality Assurance Agency: The self-regulation and quality standards of private colleges have to be much more businesslike and exceed those of the universities and publicly funded colleges through invention of new standards and benchmarks.
Second, in the transformed marketplace, the good private colleges will differentiate themselves through good teaching. This is a shift away from the fetish about the curriculum, where everyone seemed to be after more courses from more university partners, and this led to a proliferation of courses and subjects in the college catalogues. In many a sense, the shrinking market forces a rethink, for good reason, and may mean return to the basics, good teaching focused on lean curricula.
Third, though there is talk about servicing the 'home' market, fuelled by the fact that every year more than 250,000 students do not get an university place, the private colleges will remain focused on the emerging segments of the international markets. The reason for this is that the home market is largely illusory: The 250,000 students that get left out get absorbed by other training programmes or opportunities. Besides, these students don't get an university place because of structural inefficiencies of the system, which the government is desperate to address. And, finally, the population boom that is contributing to the students being left out will now level out, and the number should come close to zero by 2015. On the other hand, the 'new middle classes' in Asia and Africa will arrive at a furious pace, expanding by more than 30% a year for next decade or so. Private investment, forever efficient in search of opportunity, will always remain focused on this rather than slugging it out for the bottom-end of what is actually a fairly small market. In an age of contracting visa numbers, this may mean increasing focus on remote delivery, either through overseas campuses or online delivery or both, but innovation in this area will be key to sustenance and success of private colleges.
Fourth, the innovation in delivery models and quality standards will also require the private colleges to rethink their approach to global engagements. The universities have traditionally operated through an agency model, and this was copied by private colleges in the past. This led to good business, but the full costs of these practises are only now coming to light. This is forcing a rethink, and soon we shall see different models of engagement, pooled in admission tests and scholarships, partnerships across borders and progression agreements come into play.
Finally, the private colleges will need to find a new label. After all the mud thrown at the sector over the last few years, the surviving colleges will need to redefine themselves as, perhaps, 'independent' colleges, i.e., not dependent on government handouts. In that sense, 2012 may become the year of independence for the sector: That will bode well for British Higher Education.
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