Independent colleges – A hybrid response to massification

In the past decade, China has witnessed unprecedented higher education expansion. The total enrolment has grown from 6.23 million in 1998 to 33.25 million in 2012. A central characteristic of mass higher education systems is differentiation.

Mass higher education in China has mainly been achieved through differentiation: expansion in public non-elite local universities, development in newly restructured vocational colleges and the flourishing of the private sector, in which a new hybrid type of college – the private-run second-tier college affiliated with a public university, named duli xueyuan or independent college – is an important component.

These independent colleges are run as self-financing entities and operate on market principles. The tuition fee is twice as high in these independent colleges and student intake is at a lower academic level than at public universities. But public universities are expected to assure basic academic quality at these colleges.

Emerging in the 1990s, this type of college has grown rapidly during the massification process. The number had increased to 309 colleges by 2011, accounting for more than half of the student population on regular programmes in the private sector and nearly 12% of the national total.

Being perceived as an innovative approach to expanding higher education with less public funding, this new hybrid type of college has raised lively debates about credentials, quality and equity issues. Research on independent colleges, however, is scarce.

Growth of independent colleges

The organisational design of independent colleges functions in a context where public higher education provision was insufficient while demand was massive in China. The government adopted a strategy of allowing non-governmental capital to pour into education.

The first private college was established in 1992 after a 30-year discontinuity of private higher education under the socialist regime. However, the deinstitutionalisation of public monopolisation in the education domain was not without tension.

Governments were cautious about encouraging private education because of concerns about losing control and people did not trust these institutions much as a result of socialist ideology.

This is the reason why, when private institutions re-emerged in 1982, they called themselves ‘minban’ – people run – rather than ‘private’. This context promoted the creation of a hybrid type.

The first independent colleges were established and this new type of organisation spread rapidly in Jiangsu and Zhejiang provinces, where economic entities were diverse, government intervention was relatively weak, there was enough non-governmental capital and a high proportion of the population had the financial means to pay for education.

Zhejiang University City College was one of the first of such colleges. It was set up as part of a collaboration between the Hangzhou municipal government, Zhejiang University and Zhejiang Telecom Industry Corporation.

The establishment of City College was decided in line with the overall planning of a new Zhejiang University, formed through the merger of four universities to create a comprehensive institution aiming at ‘world-class’ status.

City College became the solution for reallocating superfluous staff. It also provided more undergraduate programmes for local students with less government funding, which met the pressing demand for higher education in the region without degrading the quality of the university’s main programmes.

Meanwhile, it was expected to generate income for the university as well as the investor and to feed the need of industry for highly skilled manpower. City College was therefore the product of a resource-driven cooperation.

The reputation and resources of public universities, the flexible quasi-market mechanism of operation and a capacity for mobilising external resources make this hybrid more attractive than its private counterpart in recruiting students.

Independent colleges became increasingly popular in China during the massification process.

Development of independent colleges

The development of independent colleges can be viewed as a process of the institutionalisation of a new approach of financing and managing higher education.

This process experienced three stages reflecting the dynamics in the regulative, normative and cultural-cognitive legitimisation.

The first stage from the 1990s to 2002 only required that a new independent college get approval from the Educational Bureau of the provincial government, the same requirement as for establishing a new second-tier college rather than going through an accreditation process. The legal status and property rights of independent colleges were unclear.

Because there was no standardised certification for this new type of organisation, some independent colleges offered diplomas in the name of their affiliated public universities while others did so in their own name.

The absence of government regulation led to uneven quality among independent colleges and the devaluing of their credentials. Nonetheless, independent colleges flourished because of the massive demand for higher education in the absence of government control.

Having rapidly developed, this new public-private partnership in tertiary education had not yet been legitimised by government regulation and was not normatively and culturally accepted in society.

The growth of independent colleges raised extensive debates on the issues of educational quality and equity, as well as disputes about the relationships between independent colleges and their affiliated public universities, investors, other private higher education institutions and governments.

These debates reflected competing interests among stakeholders and revealed conflicts within normative and cultural-cognitive levels, such as the belief in higher education as a public good versus a commodity and the conflict between academic culture and profit-driven pursuit.

To address these debates and to rectify the disorder caused by the absence of regulation, the Ministry of Education issued 'Enhancing Regulation on Independent College Operated with New Mechanism by Public University' in 2003.

The definition of this hybrid was clarified. It also set up five principles: autonomy in administration, legal status, awarding diplomas independently, separate campuses and independent financial management.

The operation of independent colleges should be based on contracts that articulately defined the legal efficacy of obligations, rights and benefits of both sides of the equation – the public university and the private investor. The governing board was legitimised as the governing structure of the independent colleges.

During this period, from 2003 to 2008, governments set the rules for the establishment and operation of independent colleges.

However, the legitimacy of an institution cannot be effectively established by regulative power alone. Moreover, the implementation of these rules was problematic when supervision was weak and stakeholders lacked a common definition of the situation and framework for action.

One problem was the normative and cultural conflicts between public university and private investor. Public universities tended to practise more quality control because the independent colleges bear their names while external investors tended to treat the colleges more like businesses and expected to gain returns as fast as possible.

When the competition for recruiting students intensified due to the rapid expansion, regulations were often breached which resulted in, for instance, cheating in recruitment activities, over-charging fees and violating rules of financial management. These problems undermined the legitimacy of the new institutions.

To rectify this, a system-wide project was carried out to assess and re-accredit independent colleges. Among 360 independent colleges, more than 100 running below the minimum standards were closed and another 249, which met the criteria, won approval.

The rules were formed by the negotiation of multiple forces – for instance government regulation, market competition, public opinion, interests of public universities, investors and education consumers.

Nonetheless, normatively and culturally the legitimacy of independent colleges was far from being established.

Third stage

After a decade of experimentation, independent colleges were still struggling with some fundamental issues: incompatibility in norms and cultures among owners of independent colleges, appeals for equal treatment from the private sector and pressure from public opinion about quality and equity and so on.

To solve the problem, the Ministry of Education issued a 'Regulation on Establishing and Managing Independent College' in 2008. This policy document set out an explicit agenda for independent colleges’ transformation into private institutions within a five-year timeline.

It also stipulated that public universities could gain a return on their non-material input, for instance, brand name and intellectual property rights. Independent colleges should pay for the use of the infrastructure, resources and curricula of public universities in accordance with contracts signed so as to prevent public assets from being misappropriated.

By the end of 2012, only 25 independent colleges had transformed into private colleges. The majority of independent colleges are still hybrids. Public universities do not want to lose the tens of millions in annual ‘management fees’ they can charge to their independent colleges.

Private investors lack motivation because they are afraid the independent colleges will have difficulty hitting enrolment targets due to losing the prestige of their public partners, thus reducing their return on investment.

Independent colleges have the same concerns about a fall in enrolment and some have difficulty meeting the criteria set by the government to establish an independent higher education institution, which are higher than those set in 2003 for an independent college as a second-tier college within a public university.

Lack of incentives

The emergence and development of a hybrid type of independent college in China is the result of inductive rather than coercive forces.

Exogenous factors – for example, economic and social development, demand for more learning opportunities – coupled with endogenous ones – for example, generating revenue, diverting surplus teaching staff, new channel of investment, and coping with the pressure of enrolment expansion from the local authorities – jointly led to the creation of this hybrid.

As a new approach to public-private partnership in managing and financing higher education, independent colleges have effectively expanded higher education provision with limited public funding. However, it is difficult for them to be normatively and culturally accepted by society.

As a compromise, an agenda to transform them into private institutions has been established. The implementation of this policy is unsatisfactory so far due to a lack of incentives to do so.

The implications of this analysis for policy-making and implementation include considering the normative and cultural-cognitive influences for change, understanding the importance of consistency and being aware of the motivations of different stakeholders.

* Jian Liu is a postdoctoral fellow at the Population Studies Center of the University of Pennsylvania, USA. This article was first published in Comparative and International Higher Education, CIHE.