Private universities squeezed as student recruitment falls

After more than a decade of phenomenal growth, private higher education institutions in China are beginning to face problems attracting students, with some colleges showing a significant drop in recruitment this year.

Qingdao Fei Yang Vocational College had places for more than 3,000 students for the 2012-13 academic year but managed to enrol only 300 by the beginning of term last month. The institution had previously grown rapidly to become one of the most popular private colleges in Shandong province.

College President Zhang Bingeng admitted in a report in the Chinese-language Economic Observer that the losses suffered by the institution were high, and that many classes may be unable to continue.

While the drop in enrolment for the Shandong institution was particularly steep, enrolment declines have become quite common in China’s private colleges, also known as minban or ‘people’s colleges’, the newspaper commented in an article published in September and headlined “Private-owned colleges in China face extinction”.

Some of the decline is attributed to a smaller pool of students passing the highly competitive national college entrance exam, the gaokao.

The number of candidates taking the examination has dropped from 10.15 million in 2008 to 9.15 million in 2012, according to official figures – an almost 10% drop at a time of rapid expansion in private higher education provision.

The sector had seen phenomenal growth, with some 30 million students enrolled in private higher education institutions in 2011 compared to just 14,000 students in 1997.

Minban have proliferated with encouragement from the government, bridging the gap as public universities have been unable to expand fast enough to cater for the ‘massification’ of higher education.

That growth may be coming to a halt, and even reversing.

Expansion of universities

“Most private colleges have a short history, poor facilities, less choice of majors [main subjects] and a poor reputation,” Xia Jiating, president of Yingcai college, another private institution in Shandong province, was quoted as saying.

“They also charge more tuition fees so, of course, students will choose public institutions first.”

Private institutions are often the preferred choice of those who score poorly in the gaokao. Xia noted that many less prestigious public universities, which have also expanded in recent years, were also facing problems recruiting students.

In addition, families have become more astute about tertiary education compared to even five years ago when there was very little information available on websites and elsewhere.

They are more likely to compare what is on offer, and the institutions' track records with regard to graduate employability.

In addition more students are going abroad, including to Hong Kong and other Asian countries such as South Korea, Malaysia and Thailand.

Mok Ka-ho, professor of comparative policy at the Hong Kong Institute of Education and an advisor to China’s Zhejiang University, said minban had also faced student recruitment problems in recent years because of the expansion of public universities.

“Public universities are setting up second-tier colleges under the mother university,” said Mok.

Public universities have been allowed by the government to establish wholly owned private subsidiaries to generate revenues at a time when universities and municipalities had started to go into debt as they expanded recruitment or built new buildings and laboratories.

These public-private institutions carry the prestigious name of the public university, which also guarantees the quality of the degree.

Many new professional courses, business degrees and English-taught programmes such as medical degrees have been offered at such institutions.

Competition from public and foreign universities

“Those who run the minban have become quite anxious,” Mok told University World News. “They feel that the government has allowed these competitor [institutions] to set up, so there is no longer a level playing field for minban.”

“There is a strong sentiment among them [minban] that the government has abandoned them after they helped the government reduce the burden of providing higher education places in past years.”

The arrival of foreign providers from Australia, the US and Britain would continue to squeeze indigenous private institutions, experts said. Those already established are expanding.

The University of Nottingham’s campus at Ningbo in Zhejiang province has increased student enrolment and is offering a wider range of subjects including a law degree launched this year.

The government has said it wants private higher education to account for 40% of enrolments by 2020, compared to around 27% now, according to the country’s National Outline for Medium and Long-term Educational Reform and Development Plan (2010-2020) published in July 2010.

However, under the plan “the government wants to diversity the mode of delivery, and specially to encourage more international players, [rather than] repeating the growth of the minban,” said Mok.

Demographic decline could put even more pressure on private institutions. The number of high school leavers in 2009 was around 25 million. This is expected to decline to around 19 million in the next decade.

“This change will be a great challenge for the survival of some private institutions,” said Wang Xiaoyan, a researcher at Hong Kong Baptist University in an interview aired on the official China Radio recently.

She added: “Competition will become more intense between private institutions and public institutions as well as among private institutions themselves.”

“Competition has become white-hot between private universities,” said Yao Baorong, dean of the foreign language school and vice-president of Xian Fanyi University, a private university in Shaanxi province in central China, in an interview aired on China Radio in March.

The main role of private colleges has been to provide vocational and professional courses, and they have the advantage of being flexible and more able than entrenched public universities to change course to meet the demands of the employment market. This may become more important for their survival.

“Second- and third-tier private colleges will have to be more competitive,” Wang said.