Sunday Posts

Universities are at an inflection point; so too is private higher education. The education entrepreneurs and private equity backing education ventures may present private higher education as the solution to higher education's current woes. In reality, however, most private higher education institutions are innovation-challenged and fail regularly. While some, like University of Phoenix or Hult Business Schools, have managed to be financially successful for short periods of time, such success is both rare and has been short-lived. Private higher ed model needs as much rethinking as that of the universities. In most countries, private higher education plays a demand-absorption role. When demographic or economic changes result in significant expansion of student numbers and public education, because of their nature as bureaucratic institutions dependent on advance planning without unfettered access to risk capital, private higher ed steps in to absorb the excess demand. However, what ...

The UK Government's proposed Higher Education Bill, which, among other things, makes it easy for For-Profit Universities to get degree-granting status, is expected to face steep opposition at the House of Lords ( see this story ). This is a long-awaited move, and many For-Profit operators, primarily from the US who are having a terrible time at home, are looking forward to this bill. UK Higher Education has a global reputation - arguably an average UK university is better regarded globally than an average US university - and being able to grant an UK degree is indeed a big prize when mass Higher Education is expanding so rapidly in Asia and Africa. Now, one could regard the House of Lords' stance as a retrograde one, and see this as a battle of entitlements - a few privileged people, retired academics among them, fighting for their corner, but this will be a mistake. The expansion of For-Profit Universities is likely to affect UK Higher Education - its effectiveness at home a...

Yesterdays rather innocuous news that the University of Law has been bought over by the Global University Systems means more for British Higher Education than it appears. It may be the start of a wholesale transformation of British Higher Education, for good or for worse. For the uninitiated, the University of Law is one of the few private universities in the UK, and the only For-Profit one. It evolved from the College of Law, which was a Not-for-Profit entity, and which was bought over by Montagu Provate Equity, a PE fund with more than 4 Billion Euro worth of assets under management. Montagu buy-out eventually led to the transfer of University charter to a For-Profit entity after some hiccups, justifying the £200 million price tag. However, while this was one of the biggest PE deals in Education, it was also illustrative how little PE investors understand education. The valuation seemed to have solely based on the University license, which was not immediately available, but it ...

Private Higher Ed in the UK, as well as Higher Education in general, took a huge hit from the last General Elections. The Coalition government, over the last five years, effectively destroyed the business model of UK Higher Ed, and replaced it with a badly thought-through model that was stillborn. On the private Higher Education side, which was largely dependent on International students, the ever-changing regulations and poor implementation were catastrophic, allowing only the very crooked and completely dishonest to survive. In a way, the last election and its aftermath demonstrated fully how politicians can damage a whole sector. Hence, with another election due next week, it is worth thinking about what this might bring. In this discussion, the policy towards International students must feature prominently. Several reasons for this. First, the Private Higher Ed in Britain was always dependent on International Students till the last government changed it and made it dependent ...

The recent comments by Dr Stephen Jackson, the Head of UK's Quality Assurance Agency (QAA), making the case for a different kind of regulatory power to oversee private sector Higher Education in the UK, is significant ( Read the interview here ). Apart from the basic point about the visa fraud and criminality in the education sector, it is important to recognise that the Private Sector Higher Ed is really a different 'beast', and needs special attention. Besides, the Private Sector Higher Ed in the UK is really very different from most other comparable countries, and has so far been regulated quite badly using borrowed frameworks and out of date ideas. The comments made here point to some fresh thinking, though the proposed scheme may remain extremely difficult to legislate and implement. In context, it is rather unfortunate that this conversation is happening in the context of visa fraud (see the back story here , and here ), which will focus hearts and minds along t...

The Immigration Minister, James Brokenshire, made a statement in the parliament yesterday regarding the government's response to the widespread visa fraud uncovered by BBC Panorama earlier this year. ( See post ) The measures are rather extraordinary in scope, though those who have seen the BBC Panorama programme would agree that the brazenness of the scam was mind-boggling. If anyone thought that the issue of student visas are now settled, after thousands of private colleges, bogus and legitimate, have been shut down, they have been proved wrong. Several universities, including London Metropolitan University, have been scarred by the experience ( see story here ). The aim of the government was to close down every college except the Highly Trusted ones (a category of sponsors defined by the new immigration rules) by 2012, but this has obviously failed. The fact that this issue keeps coming back indicate that a serious rethinking, rather than rhetoric, is needed.  The d...

Times Higher Education reports that two private colleges in London has received more money in public funding than the London School of Economics and School of Oriental and African Studies. ( See story here ) While we may argue on the merits of giving public money to private providers, as is the case in myriad public services, even the staunchest free market advocate may accept that this is perverse. One can't even argue that this is market forces at work: There is no way to explain why British students will prefer almost unknown institutions over the better known universities, except that we have managed to craft a system which has created all sorts of wrong incentives for over-recruitment. It seems that despite all the warning signals of the student loans scandals from the US, the government in England has managed to create a system and break it within barely two years. Indeed, one would argue that stories such as these is a mere case of jealousy of the public sector. But th...

The private colleges in the UK, and I am talking about the ones which are small, mostly run by owner-operators, and privately funded, have taken a terrible beating in the last couple of years. The British Government's across the board clamp down on student migration, the burden of which fell disproportionately on private colleges, made their business model disappear overnight. Some enterprising ones survived the onslaught by adapting quickly to the new student finance regime established in 2012, where the government made money follow the student and opened it up for private sector, even For-Profit, institutions.  This strategy has had some stunning successes, as the quick climb of numbers of students opting for private institutions, as opposed to a Public University, show. The success was primarily because the private colleges, leaner institutions without a mandate for public duty or unionised staff, could afford to charge the students lower fees compared to the universities....

Times Higher Education reports that the Student Loan Access for 23 Private Colleges have been suspended (See story ). This means that these private colleges will not be able to recruit any more students for the current academic year. Presumably, they would be able to recruit again for the 2014-15 Academic Year, when their numbers will be capped (they have been uncapped so far). Indeed, this should not amount to much as the main recruiting season, Autumn 2013, is already over, and some of these private colleges have recruited more students than they can possibly service. However, this tale of expansion leading to knee jerk reaction from the Government is yet another illustration how little the Policy Makers understand the Private Providers in Education. To be clear, private providers have not over-recruited. This is because there was never a limit set on how many students they can actually recruit, and hence the Government's decision, prompted by 'expansion', may appea...

From experience, I know the effects of space on learning is under-appreciated. Particularly so in most parts of the independent higher education sector in Britain, mostly owned and run by owner-operators for students coming from overseas. Somehow, there is an implicit assumption that students really don't care about the learning environment as long as they are in London, and given a good tutor and a course that meets their requirement. There is also a heavy focus on productive space, as in classrooms, as opposed to support spaces, like Library and Student Social Areas, and a tight control over overhead spending and space usage lies at the heart of the economics of independent higher education. As most of these colleges operate at the cost-conscious demand-absorption end of the sector, such 'savings' is often projected as critical to competitiveness and ongoing survival of the institutions. Coming at it from this perspective of functional space, it is interesting for me t...

The Cameron government denied that the current immigration policies are hurting the UK Higher Education sector. Despite the precipitous fall in the applications to British universities, particularly from South Asia, and the near-total extinction of the private education sector which used to provide feeder routes to the universities, the government claims that their policies will encourage 'genuine' students to come to the UK, and therefore help protect the brand and the excellence of the British Higher Education. Like so many other things, they are wrong on this count too. But, then, it is difficult to expect anything from this government anyway. Apart from protecting the banks and hobnobbing inappropriately with Murdochs, the government ministers seem incapable of getting anything done. The problem, indeed, is their world view, one so antiquated that they fail to understand or anticipate the aspirations or requirements of a modern society. With their Lib Dem stooges froz...

It doesn't seem so at this time, when the British Government's discriminatory treatment of private sector higher education institutions driving the sector to extinction; however, from the experience of other industries, one can see that this is precisely the time when winners, and new business models, emerge. British Higher Ed, right now, is at a crossroad, but is leading towards a blind alley. The ever more bureaucratic state is trying to shape the higher ed agenda, and spawning a generation of ever more compliant university officials disconnected from the reality of the marketplace and with heads hidden in the sands of already bankrupt politics of grants and funding. The celebrated triple helix is being torn apart, almost by design, as the state tries to disentangle itself from the crisis of confidence, the industry continues to deal with the fall-outs of global recession, and universities try harder to please their ever more demanding, and ever more stingy, masters. What we...

All Higher Education is intensely local. Its form and agenda are defined by who pays: As long as most degree-granting institutions are funded by local and national governments, this will remain the case. For all the talk about 'global higher education', the idea is mostly to export locally constructed ideas of education, to promote national brands abroad, to import students where possible. Indeed, it is only fair to acknowledge that Higher Education is also one of the most regulated of the sectors, and most nations only want the Higher Education institutions they can control. Whatever the rhetoric, the national governments don't want global higher education: They just want global investment in local Higher Education. But Higher Education needs to be GLOBAL. This relates to the purpose of higher education, which, I shall claim, has expanded beyond the making of citizens to, in the era of mass higher education, making workers and consumers. And, since the expectations of...

In a sense, the independent higher education sector in Britain is incapable of thinking. Having spent some time in the sector, talking to and pleading with various entrepreneurs, I have come to the sad conclusion that this very entrepreneurial sector may be too opportunistic. I have no issues with opportunism, and understand that this is a necessary trait for entrepreneurs: But, there are times, and we are at such a juncture right now, when strategic thinking and that 'vision' thing is somewhat needed. Plain opportunism, at times like this, creates a sort of thought paralysis. To be fair, most of the colleges in the sector are owned and run by owner-operators. Professional management is quite rare, and the businesses are quite small compared to their impact. This is the key reason why the capacity to think big and bold is rare, and strategy mostly means tinkering around the edges rather than any meaningful approach to the future. However, at this juncture, strategy is no l...