December 2010 issue

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Following the malaise of 2009, this year did not start much better, with school closures early in the year followed by tough new immigration rules in major markets such as the UK and Australia. Nevertheless, outside of Australia, it appears that numbers rallied, and big business consolidated its position in the market, underlining the potential that the corporate world sees in building profits within international education. Elsewhere, agency recognition schemes were adopted by a wider array of organisations. Amy Baker looks back at 2010.

The year opened with a major school failure – Geos in Australia collapsed, affecting around 2,300 students – setting a difficult tone for Australian operations. “Major pressures on the industry” is how English Australia’s outgoing Chairperson, Seamus Fagan, describes the overall impact of challenging factors in Australia this year, such as various college closures – English Australia’s Tuition Assurance Scheme was activated for the first time – a decline in student numbers since visa amendments were made, and changing approaches to risk assessment and living expenses by the government.

In the UK, Tony Millns, Chief Executive of English UK, railed against “crude, short-term politics” as the first of many government manoeuvres occured in March, hampering the UK industry and its ability to recruit students with a basic level of English from outside the EU (see LTM, April, page 6). Now, he sums up, “2010 has quite simply been a rollercoaster of a year, ever since the hasty and ill-conceived review of student visas in November last year.”

Australia and the UK undoubtedly saw the most dramatic impacts this year from government-decreed mandates for change, and Australia certainly saw the biggest subsequent drop in students too. In the year to July 2010, student enrolments for Elicos (English language) courses were down by 23 per cent; a huge turnaround from years of consistent growth. However, all countries are determined to evolve from the current year stronger and well placed for success, and accordingly, Sue Blundell, Executive Director of English Australia comments, “We have had several years of huge growth in student numbers in the Elicos sector so these figures represent a levelling off in the industry to more sustainable levels. Elicos student numbers are still above 2007 levels and Australia’s booming economy means that while the Australian dollar is high, students have more possibilities of finding work here while they are studying.”

As well as a change in the visa regulations, which means students applying for a visa to study in more than one sector now have to adhere to stricter visa requirements, one of the major changes to the Australian visa regime was the collapsing of the link between vocational education and permanent migration; a route which Indian students in particular had favoured as a means of becoming permanent migrants to Australia (usually entering the country as vocational students but also sometimes as English language students). As a result, the statistics released by Australian Education International showed that Indian student commencements for the Elicos sector were down by 86 per cent.

Eurocentres in Brisbane was one of Australia’s school closures this year: the organisation pointed the finger at the vocational route ending for local Indian students. Michael Gerber, CEO of the worldwide language school chain, said, “Recent regulatory measures taken by the Australian government have [led to] a decline with a substantial loss of 70 per cent of the locally sourced students. This loss amounts to approximately 40 per cent of the school’s overall enrolments and unfortunately Eurocentres cannot assume that a reduction of this size can be compensated by other market segments within a foreseeable timeframe.”

That said, a closer inspection of the statistics reveals that in fact student commencements for all of Australia’s top 10 source countries for Elicos were down in July this year. Of course, given that international education is the third largest export industry for Australia – 50 per cent larger than tourism travel and contributing US$18 billion in 2009 – the government is certainly mobilising itself to address the downturn in the sector (although it should be noted that commencements in higher education to July 2010 were actually up by 5.6 per cent).

Australia’s Labor party was voted in for another term in June, led by Julia Gillard, and the incumbent powers-that-be were swift to profess that they were on top of the situation. Referring to a decline in university applications from foreign students in September, Senator Chris Evans, said, “There are several factors which have impacted on the recent decline in numbers of student visa applications including the stronger Australian dollar, the ongoing impact of the global financial crisis in some countries, increased competition in the education market and improved integrity measures.”

He added that the Labor party had introduced regulations which were proportional to the risk posed by different categories of prospective students. “The reforms introduced were designed to target high risk caseloads, deliver integrity and ensure only genuine students with the financial capacity to live and study in Australia are granted visas,” he said [see ETM, March, page 21]. “The Gillard government is committed to a sustainable, high-quality international education sector and values the contribution it makes to the Australian economy.”

The Council of Australian Governments (COAG) announced a range of strategies designed to improve the safety and wellbeing of students this year, following various reports of welfare issues last year. These include provider closure taskforces in each state to coordinate support for students in the event that a school closes down (see LTM, July, page 7).

The UK also saw a national election this year and its hastily reformed student visa process prior to the election was a sign of frantic electioneering by the Labour government, according to some commentators. It certainly had the result of stirring up unrest, discontent and a legal action by English UK on behalf of the industry against the government (which failed to secure another term); based on the fact that the change in rules to raise the entry language level for student visas to level B1 (intermediate) was rushed through without the changes being brought before parliament.

English UK was successful in the Judicial Review, but unfortunately, its success was short-lived – the ruling was reinstated soon after the Judicial Review, once new immigration rules were put before parliament. However, following association machinations behind the scenes, a new operating environment was expected at the time of going to press. Millns comments, “We’re now working closely with UKBA on the new government’s review of student visas, and we are anticipating an announcement of some significance for the English language sector... as a result of my meeting with the Minister in early September.”

Unlike Australia, however, at least the UK did not see drastic drops in students, despite the business of recruiting students being made far tougher by UKBA. Millns says, “Student numbers seem to have held up well this summer, though this is due to the exchange rate, which makes the UK particularly good value at present, and members’ entrepreneurial approach in switching marketing away from longer-stay courses for beginner students who need entry clearance.”

For 2011, Millns is optimistic: “I hope that next year the visa system will settle down with far fewer changes, and that members will start to reap the benefits of all English UK’s work to increase our market share through more small overseas fairs and the new partner agency scheme.”

In other countries around the world, business also looked like it had improved on the bleak 2009, such as Ireland and Malta, both of which suffered from a strong euro currency and a very competitive marketplace. In Ireland – although there was at least one school closure this year; LCI in Dublin, because of weak trading forecasts – CEO of MEI, David O’Grady, comments, “After the depression of 2009 (weak sterling, recession in our main markets, confused immigration policy) 2010 was destined to be better. And, so far, it has been.”

Although there are no firm statistics yet, O’Grady says that MEI schools are reporting that numbers and business is up about 30 per cent on 2009, revealing just how bad 2009 had been. “Surprisingly, our staple market, Spain, held up very well despite fears that recession there would prevent students travelling. Italy, too, came back strong in 2010 with an approximate increase of 12 per cent in numbers from there,” he says. “The big new business of 2010 was the beginning of good business from KASP [King Abdullah Scholarship Programme] students from Saudi Arabia. It is difficult to get exact figures on this yet.”

With the UK and Australia forced to adapt this year to visa programme revisions – all of which are necessary to safeguard the integrity of the system, being the broad disclaimer – O’Grady hints that Ireland is also in line for some immigration procedure overhauls. He reveals, “In September, the Irish government published three documents (from the Departments of Education, Justice and Enterprise) for the first time linking all three in an attempt to increase numbers of international students to Ireland by 25 per cent by 2015.” (see page 6).

“Crucially, the reports say that an enlightened and simplified visa regime is necessary for such an increase and that changes to implement the regime should come on stream in spring 2011. This move has given great heart to schools, especially to their marketing departments,” observes O’Grady.

Schools hope any changes will boost business rather than hinder it, and one pilot scheme for Turkish university students and MEI schools is already in place, simplifying visa processes for applicants; O’Grady believes results will be noticeable in the second quarter of 2011.

Like Ireland, which had seen protest for change from universities working internationally (see ETM, May, page 21), another country that has seen the international education sector campaigning for reform is the USA, and it could be that 2010 was the year in which the cry was heard here too. The accreditation bill, requiring accreditation of language schools to be linked to visa issuance, was passed by the Senate, at the time of going to press, awaiting its passage through the House before becoming law at the second attempt. In New Zealand, there remains significant lobbying activity without any likely outcome – as yet. Rob McKay at English New Zealand says, “We are still working with the government to achieve part-time work-rights for English language student visa holders. Immigration takes up most of our advocacy time both on policy and process. Immigration is our main operational constraint – at least the same applies to our competitor countries.”

In Canada, meanwhile, a pilot project to recruit Indian students into universities under the auspices of the Student Partners Program has been extended for 2010 (see page 19). Selected AACC member colleges work with Citizenship and Immigration Canada (CIC) to speed up processing times for student visa applications. So far, the scheme has handled over 4,000 applications. And, while Australia restricts access to permanent migration, Canada took the decision this year to offer a fast-track to citizenship for graduating tertiary-level students in the province of Quebec.

There was also cohesion among education associations in evidence in Canada this year: five national education associations signed a memorandum of understanding to establish the Canadian Consortium for International Education Marketing (see LTM, September, page 6). Gonzalo Peralta, Executive Director of Languages Canada, explains, “This is really the first time that Canada’s stakeholders [have begun] to work together in this fashion and although we may not have a central body yet such as the UK and Australia do, this initiative will certainly have an impact on our visibility both inside and outside of Canada. Although the agreement was signed only this summer, there are already collaborative projects in the works that point in an exciting direction.”

With plenty of progress in the area of stakeholder cohesion and visa policy this year, another area that has seen continued development is that of agency quality credentials (and a focus on agency liaison). In Australia, selected agencies (in Australia, India, China, Indonesia and Thailand) registered to use the electronic eVisa system were required to re-register because of concerns over agency legitimacy (see LTM, August, page 8), and English Australia conducted a sizeable survey of agencies to “better understand current agent perceptions regarding Australia as a study destination” (see page 8). “It is clear that agents really value being consulted in this way,” noted Blundell, who received an impressive 976 responses.

In New Zealand, agencies were included for International Education Excellence Awards in the annual Education New Zealand conference, while English UK and workshop organiser, ICEF, both launched their own agency partnership or training programmes, intended to flag quality agencies and enhance synergy between particular organisations.

English UK requires partner agencies to attend a relevant seminar, English UK-organised event, complete a business profile form and provide five references to become a ‘partner agency’, while ICEF’s Agent Training Course is delivered online free of charge but certification is available at ICEF workshops as well as some other events around the world.

In the USA, the American International Recruitment Council (AIRC) certified its first group of eight agencies in December 2009, all of whom hope that they will see more US business as a result of a certification process (at their expense) for a mainly US audience.

Agencies are now able to seek out and display a panoply of “recognition” certificates; these latest are in addition to training courses already available provided by the British Council in the UK and Pier Online in Australia in association with Australian Education International (AEI). However, recognition branding comes at a cost, either financial or in terms of loyalty.

Moreover, Peralta in Canada observes that this trend towards accreditation may end with governments imposing their own accreditation rules for acceptable agencies, and indeed this was a recommendation made by Australia’s Senate Enquiry this year, which suggested a stipulation that all education partners should have passed Pier Online’s Education Agent Training Course or similar (see LTM, April, page 7).

Peralta noted that agency association Felca is also making strides in this sphere; namely its 553 strong membership aiming to abide by the Felca Accreditation Code. “It was encouraging to observe at Alphe UK that Felca members are also beginning to implement standards, especially given the latest initiatives that are being undertaken by immigration officials worldwide,” he says. “Let’s hope the agents win the race and not governments,” he added.

While agency bona fides and visa integrity were trending in 2010, so too was a continuing corporate expansion into the international education sector, perhaps best defined by the arrival of TUI into the UK marketplace. TUI, which calls itself the world’s leading international leisure travel group, is seeking to make inroads into the language travel sector, and so far has purchased three UK companies within the year under its TUI Education brand.

Australia-owned listed company, Navitas, expanded its empire in the USA, UK and Australia, launching a number of new partnerships and a new education precinct in Brisbane, which will house various areas of its business such as Navitas English and Navitas Workforce (internships). Announcing four new colleges in the USA, Rod Jones, Chief Executive, said he saw huge potential there: “The USA is almost relatively untouched when it comes to international students” he said (see LTM, October, page 7).

Elsewhere, CIBT Education Group bought out KGIC in Canada (see LTM, March, page 6) to further its vision of exporting western education to emerging countries in Asia and importing international students to Canada. Open Hearts International College in Miami, FL, bought Geos NY Corporation, comprising 12 schools (the entire Geos network globally collapsed this year, including 329 schools in Japan) and Study Group was sold again; to private equity firm Providence Equity Partners, for a spectacular US$570 million. Providence Managing Director, Peter O. Wilde, said Study Group was a natural fit alongside Providence’s other education investments. He sees the future as thus: “Students around the world are increasingly seeking education opportunities outside their country of origin and demanding high quality teaching and personal support, particularly in university, vocational and English language programmes.”

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Alphe Conferences  
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