Tag: Numbers

  • Filling their boots? The rationale for growing loss-making home student numbers

    Filling their boots? The rationale for growing loss-making home student numbers

    The release of provider-level end of cycle data for the 2024 cycle confirms what has been long known informally; this year a group of “higher-tariff” providers went for growth, in some cases by reducing their entry tariff significantly. You can see DK’s crunching of the provider data here.

    Typically, behaviour like this leads to grumbling elsewhere in the sector. That’s partly because there’s a direct impact on other institutions’ bottom line when the big players flex in this way, meaning that those who lose out may need to suspend planned investment and/or embark on portfolio rationalisation, rounds of voluntary redundancy, and other cost-reduction measures to stay afloat.

    But it’s also because there’s a perception that the selective institutions are pulling in students that mid or lower tariff institutions consider themselves to be best equipped to support and nurture. This (arguably) creates additional risk for the students who find themselves studying at an institution that culturally may assume a greater degree of academic self-efficacy than they actually have.

    The debate rumbles on as to whether it’s reasonable to “permit” popular institutions to grow at the expense of others. But much less attention is generally given to the question of why any successful provider with significant overheads would seek to grow home student recruitment at all. In 2022 the Russell Group warned that the average deficit incurred by English universities per home student per year was £1,750 per student per year, and that a “conservative estimate” would see that deficit increasing to £4000 by the current academic year.

    Assuming you’re not an economist or a strategy consultant (if you are, do write in), you might legitimately be scratching your head about the strategic intent behind increasing sales of a product you don’t make any money on – indeed, that you have to subsidise from other sources. Higher education institutions don’t have to make money of course – the goal is generally to realise a small surplus across the breadth of activities, recognising that some degree of cross-subsidy, primarily from international student income, is part of the business model. But even with that caveat, growth of a loss-making activity in times of financial pressure remains, on the face of it, a peculiar approach.

    What’s going on?

    There are three strategic rationales for this that I can think of. It might be that hitherto high tariff institutions are growing for public interest reasons – to meet their access and participation targets, or because they are offering new courses of value to their regions or that will attract a wider range of international students or even support a particular research ambition.

    It might be that they are growing in the subject areas that are cheaper to teach in hopes of making inroads into that average deficit and reducing the level of cross-subsidy from other sources. Over on DK’s end of cycle data visualisations you can take a look at the general subject areas where particular institutions have seen growth. DK would no doubt be the first to tell you that HECoS subject grouping isn’t quite as nuanced as you’d need to be able to make that case plausibly, though there’s probably a bit of it going on. This was a concern the Augar review flagged back in 2019 – that the fixed unit of resource, all other things being equal, tends to incentivise growth in subject areas that have higher margins and for which there is stable or growing demand, rather than trying to generate additional demand for more expensive and less popular subjects.

    It is possible there might be changes to teaching and/or student support provision that have generated sufficient efficiencies to get to a break-even or modest surplus situation on home students that would make overall growth a sensible business strategy. This is the current focus of a lot of sector thinking on efficiency – if the unit of resource isn’t increasing fast enough, but student (and regulatory) expectations aren’t reducing, then the sector has to figure out ways to make its provision sustainable, through technology adoption, more sharing and collaboration among institutions, reducing costs in areas where the institution believes there is minimal impact on student experience, and so on.

    While there is a lot of interesting thinking going on around efficiency, it’s doubtful that this number of institutions has made such significant progress as to get to the point of wiping out the home student deficit in its totality, though there may be some efficiencies to be gained through economies of scale.

    There are also several less overtly strategic options. One is that the institutions in question don’t have that strong a central grip on their admissions. It’s easy to imagine in a devolved academic system individual departments and faculties pursuing growth to increase their own overall income without a great deal of attention being given to the aggregate effect on the institution as a whole.

    The final possibility – and in all honesty I think this is probably at least a somewhat accurate assessment – is that the calculation is that growth, even cross-subsidised growth, will demonstrate market strength, which will satisfy boards of governors, reassure lenders, and keep the university in good fettle with the bond markets. Which raises the question about what happens next year and the year after that. Growth, even for the most popular institutions can’t be an indefinite strategy. And what happens to the rest?

    For the big players, growth can generally be deployed as a tactical response to immediate financial pressure, while structural or operational change can be deferred to future times, when there’s more bandwidth and appetite for change, or clarity about the policy environment. Other institutions don’t in most cases have that luxury and some are likely to be less stable as a result.

    The policy response

    So how should government respond? It’s very hard to make the case that students should be forced – or at least obliged – to attend an institution that isn’t their first choice simply to ensure that that institution remains generally healthy and sustainable. We should also on principle give those selective institutions the benefit of the doubt on their strategic preparedness for a different intake this year. Growth in the hundreds in an institution of thousands, if fairly evenly spread, needn’t be an issue if there is a plan in place to support those students and notice if any are struggling.

    It’s still worth saying, though, that if you’re looking through the lens of student interest, the market principle that student choice is the most important thing only holds true if the basis on which prospective students are making choices has a meaningful relationship with their prospect of flourishing at their chosen institution. So it remains a bit of a worry that if there are issues we’ll only know about it when the outcome data surfaces in the coming years – too late to do anything about it.

    Some in the sector wish there was a way of putting restraints on the market without resorting to institutional student number controls. There are options short of total control that might focus on restraining or encouraging recruitment in particular subject areas, or asking institutions to evidence the case for growth, and/or subjecting them to more stringent oversight when growth exceeds a certain margin. It would also be theoretically possible, though very complicated, to set quality thresholds around inputs ie set conditions around the available resources in the learning environment all students should be able to expect.

    But it’s also worth government giving consideration to the idea that in market terms all of this only is an issue because the perception is that the size of the market is pretty fixed and institutions are by and large vying for a larger slice of the pie rather than trying to grow the pie. UCAS data tends to support that view as applications via UCAS have seen growth at a lower rate than the sector hoped given the demographic growth in 18-19 year olds in the wider population.

    Published UCAS data does not, however, capture applications made direct to institutions or, indeed, PG-level applications, and there may be growth or potential for growth in other parts of the market. Market purists would argue that if a provider is not seeing success in its traditional market then the smart move is to tap into a different market. While this might be accurate in strategic terms, this analysis tends to gloss over the risks and complexities involved in making such a pivot, especially when the provider in question is already feeling financially squeezed.

    Even if your market share is eroding, trying to win it back can be perceived as a path of less resistance and more immediate potential reward than entirely retooling the whole offer – even if thinking this way is also a highly risky strategy if things continue as they are and the rewards fail to materialise, as some institutions have discovered to their cost.

    If government wants a policy win on two key fronts: widening access to selective institutions and broadening the pool of people who benefit from HE in general, it could do worse than to create a programme of support explicitly targeted at those institutions who are less powerful in the “traditional” market but that still have a great deal to offer their localities, and work with them to develop the offer to prospective students where there is latent growth potential – pooling risk and transition costs, with a payoff ultimately realised in skills and economic growth.

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  • Student visa numbers hit record despite Australian clampdown

    Student visa numbers hit record despite Australian clampdown

    Student visa issuances reached record levels in Australia late last year, suggesting that 12 months of policy upheaval have failed to suppress international education flows ahead of a federal election likely to be fought on migration.

    Visa grants to would-be university students applying from overseas reached an all-time high of almost 17,000 in November, the latest month for which Department of Home Affairs statistics are available.

    Monthly issuances have been at or near record levels since mid-2024, well exceeding pre-pandemic tallies and driving a surge in overall foreign student numbers. Higher education typically accounts for two-thirds or more of student visa recipients.

    The figures show that student flows have weathered some 10 separate policy changes unleashed to dampen overseas enrollments since December 2023. They include increased financial capacity requirements on applicants, a doubling of visa fees and a chaotic reprioritization of visa processing that has been blamed for soaring delays and refusals.

    The opposition Liberal Party, which is due to contest a general election by mid-May, has repeatedly berated the Labor government over student volumes since Australia’s post-pandemic reopening of its borders. The surge in student numbers, initially spurred by policies enacted by the opposition when it was in government, has been blamed for housing shortages.

    Liberal leader Peter Dutton promised “stricter caps on foreign students to relieve stress on city rental markets” during an election campaign rally on Jan. 12.

    While treasurer Jim Chalmers has attributed Australia’s lofty migrant tally to low departures rather than high arrivals, the latest statistics suggest both are contributing. And the figures do not include record numbers of applicants fighting to have their visa rejections overturned.

    The Sydney Morning Herald reported that the backlog of international students contesting their visa refusals in the Administrative Appeals Tribunal had doubled in five months to exceed 20,000 for the first time, and that two-thirds of visa rejections were being overturned by the tribunal.

    Meanwhile, overseas students are pursuing strategies to extend their time in Australia, including starting new courses or applying for asylum. Immigration expert Abul Rizvi said the tally of onshore student visa applicants had blown out to more than 100,000.

    Home Affairs data provided to a Senate inquiry in October showed that a long-term monthly average of about 300 asylum applications from overseas students had increased to about 450 since mid-2024, reaching 516 by August—the highest figure in at least five years, and probably since the 1989 Tiananmen Square massacre.

    Student visa grants could also increase following the late-December replacement of the controversial ministerial direction 107, which slowed down the processing of many visa applications, with ministerial direction 111.

    International education consultant Dirk Mulder said opinion on the new arrangements was divided, with some operators saying visa processing had sped up while others complained that it was slower than a year ago.

    Both camps expressed concern about the likelihood of further policy changes and the fate of institutions that had reached their “thresholds”—80 percent of the formerly announced international student caps, the trigger point for slower visa processing.

    One worry was that agents might stop referring students to universities and colleges in this position. “There is a large amount of angst as to how recruitment partners will work amongst institutions when they hit their 80 percent threshold,” Mulder wrote on his Koala news site.

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  • This week in 5 numbers: Trump directive targets college DEI

    This week in 5 numbers: Trump directive targets college DEI

    The maximum number of organizations, including colleges with endowments over $1 billion, that President Donald Trump asked each federal agency to identify as potential targets for “civil compliance investigations.” The directive — which targets diversity, equity and inclusion programs — came in an executive order on Tuesday, the first full day of the new Trump administration.

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  • This week in numbers: Clearinghouse retracts first-year enrollment data

    This week in numbers: Clearinghouse retracts first-year enrollment data

    We’re rounding up recent stories, including a methodology mea culpa and billions of dollars in discharged loan debt.

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  • Poor Harvard Numbers Show Impact of SCOTUS Affirmative Action Ruling

    Poor Harvard Numbers Show Impact of SCOTUS Affirmative Action Ruling

    No one feels like confirming nor denying how affirmative action’s death is destroying a sense of inclusion in higher ed.Emil Guillermo

    But make no mistake, the destruction is under way. 

    Harvard College sent out letters to its early admits, but hasn’t disclosed what the demographics are yet for this year. Waiting until all the admits are sent out in the Spring buys them time to make excuses. But Harvard Law has issued its numbers and the alarm bells should be going off. There were just 19 first year Black students, 3.4 percent of the Harvard Law school class, according to data from the American Bar Association, as reported by the New York Times. It’s the lowest number since the 1960s, a period when affirmative action and civil rights was much more in vogue. 

    Woke wasn’t considered a disease back then. People were interested in fighting racist segregation. Inclusion and diversity weren’t institutionalized notions back then. They were the values we hoped would take us out of the darkness. But compare this years 19 Harvard Law admits with the 43 admits from the previous year, and you see the wounds have been reopened. David Wilkins, a Harvard Law professor who has kept tabs on these matters told the Times it was related to the Supreme Court ruling, and its “chilling effect.”

    Since the 60s, the numbers have been around 50-70 a year. And then came this year’s 19. Hispanic students were also lower at 39, 6.9 percent of the class versus 63 students or 11 percent of the class in 2023.

    The big winners in the admissions at Harvard Law? Whites and Asian American students, the latter, the principal plaintiffs in the suit before the court last year.

    Now that we have diminished the game to numbers, the numbers don’t lie. When you can’t address the need of inclusion directly, we leave it up to chance. 

    This year at Harvard Law was not a good year. Harvard miscalculated by not settling with the anti-affirmative action SFAA front and going to court. But that allowed for a right-wing Supreme Court to set the precedent for all schools not just Harvard. Anti-affirmative action advocates will try to put a positive spin on the low numbers, saying it’s not as low as it sounds. They’ll talk about different recording standards set by the A.B.A. There’s also the issue of multi-race students, and those who decline to state. 

    But secretly opponents of affirmative action are gleeful. They got their way. Their court. And last November their president, elected by voters who believe that educational attainment, not race nor class, is the new dividing line in America. The less education the better. Who needs affirmative action?  Let that sink in academia.

    Consider the Harvard Law School numbers the first of many signs to come that will let us know just how fast we are an America in reverse.

    Emil Guillermo is a journalist, commentator, and former adjunct professor. 

     

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