The changing landscape of private higher education

Attempts at understanding private higher education globally date back over two decades, with the first publications appearing in the late 1990s. Yet, in 1998, at the UNESCO World Conference on Higher Education, the issue of private higher education was not really addressed.

A decade later, UNESCO, in preparation for its second World Conference on Higher Education in 2009, commissioned a comprehensive report on private higher education as one of the background documents for the conference. This clearly indicates how private higher education had gathered importance in just a decade.

Now, almost a decade later, there is a repositioning of private education in the higher education landscape. The boundaries between private and public providers are becoming even more blurred, the questions regarding the definition of a private higher education institution have become more pertinent and the public versus private higher education debate with regard to funding, quality and governance continues unabated.

IAU conference

It is against this background that the International Association of Universities, or IAU, chose the topic “Leadership for a Changing Public-Private Higher Education Funding Landscape” for its annual international conference that was held in Accra, Ghana in October 2017.

The IAU has a membership of more than 600 universities, but it also admits, as full members, national and regional associations of universities – currently more than 30 – which therefore extends its reach to a very large number of institutions. Being a global association, the IAU is well-positioned to convene a meeting of these associations and this is what it does every two years.

The international conference in Accra was preceded by the IAU’s Seventh Global Meeting of Associations under the same topic as the conference.

Regional differences

The presence and growth of private education vary significantly from one world region to another. The United States is known to have strong private institutions, some being the most prestigious in the world. Private institutions have also been well-established in East Asian countries (for example, Japan, South Korea and Taiwan), where they enrol the largest number of students.

Western Europe is the one region where private higher education is least present, although several institutions are now appearing.

The regions where private higher education has witnessed the greatest growth are in the developing world – Africa, Latin America and South Asia – the main reason being that governments are unable to fund the ever-increasing demand for higher education resulting from demographic growth.

This trend in growth will continue. In Sub-Saharan Africa, for example, the current enrolment in higher education stands at roughly 10%, which is unacceptably low, yet public funding will just not be able to support further substantial growth in the sector.

Already in most of these regions, the number of private institutions by far exceeds the number of public ones, although their student enrolment may be lower. But soon private enrolment will surpass public enrolment and this has already happened in several countries.

Profit

Private institutions are often labelled as for-profit or not-for-profit, the understanding being that profits in the former case accrue to the shareholders whereas those in the latter case are ploughed back into the institution. But that is not always so clear-cut. In many cases the financial structure of the private institution is not completely exposed to the public or even to the authority approving its set-up.

At the conference, examples were mentioned where private developers acquire large plots of land in remote areas at very low cost for setting up a not-for-profit institution, but then use only a small part of it for that purpose, the rest being used for providing services to the institution on a purely for-profit basis or for commercial and property development as the value of the land dramatically increases.

The pertinent question asked by one participant was: why would a businessman (other than a philanthropist or a religious person) invest in higher education if he is unable to reap a profit?

The change in perception of private institutions by university associations is revealing. Previously, many associations, for example, the Association of Commonwealth Universities or ACU and the Association of African Universities or AAU, would admit only public universities as members. They then started admitting not-for-profit institutions and now they also admit for-profit ones.

The argument that it matters little how the private institution uses its profits, as long as it provides quality education and is recognised or accredited locally, seems to be winning.

The IAU, however, still restricts its membership of private institutions to not-for-profit ones, although both the ACU and the AAU are association members.

Funding

It is in the area of funding that the boundaries between private and public institutions get really blurred. The main source of funding for private institutions is through tuition fees, although private endowments and foundations also contribute in some cases. Public universities are also increasingly feeling obliged to charge tuition fees to meet their costs as government grants remain stagnant or even get reduced.

Makerere University in Uganda is often quoted as an example of a public university that also operates as a private one. It admits a fixed quota of government-sponsored students and then also admits ‘private’ fee-paying students, especially in the lucrative areas of medicine, law, engineering, etc.

The number of fee-paying students exceeds the number of government-sponsored ones and the revenue from tuition fees exceeds the government grant it receives. Other public universities in East Africa have also adopted the same survival strategy.

On the other hand, in Botswana, because of limited places in public institutions, the government sponsors students at private institutions by providing them with tuition fees, living allowances, etc. Thus, private institutions, most of which are for-profit, benefit indirectly from public funding.

Cross-border higher education has also blurred the definition of a public or private university. For example, the branch campus of the University of Nottingham in Malaysia operates as a registered private company, but the degrees it awards are exactly the same as from the University of Nottingham in United Kingdom, where it is a public university.

Quality and governance

The quality of the private institutions in the developing world is another topic of contention. It is often believed that the educational provision of private institutions is inferior to public ones. But this is not always true. There are excellent private universities in Africa, most of them faith-based, which are of the same, if not better, quality than many public ones.

In Africa, many of the higher education regulatory bodies were set initially to control the quality of the burgeoning private institutions. With time, as the public universities became overcrowded and received insufficient government funds, their quality rapidly deteriorated and they needed to be quality assured.

Now, almost all regulatory bodies or quality assurance agencies make little distinction between public and private institutions. The challenge they face, however, is regulating the very large and continuously increasing number of private institutions.

Closely linked to quality is the issue of governance of the private institutions. Many of them are run as purely commercial enterprises, with no academic structure. Procedures for recruitment and promotion of academic staff, where they exist, are unclear.

Some of them are family-owned businesses, having family members occupying key administrative and academic positions with self-bestowed academic titles, even if they are not fully qualified and have no experience of running an academic institution.

Public universities often complain that the private institutions attract their academic staff by offering them higher academic titles, such as professor, for which they are not eligible in their institutions.

Diversity

What emerged from the IAU conference was that there is huge diversity among the private providers, that private and public higher education institutions often have overlapping characteristics and that the dynamics between them are fast changing.

There is a need therefore to better understand private institutions so that, together with the public ones, they become major promoters of economic growth and innovation. This is what led the IAU President, Pam Fredman of Sweden, to mention that the IAU would consider undertaking a study, in collaboration with its association members, of private higher education providers in different world regions.

Professor Goolam Mohamedbhai is the former secretary-general of the Association of African Universities, the former president of the International Association of Universities and the former vice-chancellor of the University of Mauritius.