Students as consumers? Or not?

University isn’t just a business – and the student isn’t always right

In his review of higher education funding, Lord Browne made the student as consumer the centrepiece of his rationale for change. The Government’s White Paper last June also claimed it was putting students “at the heart of the system”. The Guardian Higher Education Network is running a live Q&A on students as consumers today:

Driven by the government’s HE reforms, the words ‘consumer’ and market’ are an increasingly central part of the British academic lexicon. Speaking at the HEFCE annual conference in April – ahead of the publication of the HE white paper – Vince Cable, the secretary of state said: “Making the higher education system more responsive to students, your consumers…is one of the central purposes of our reforms.” He later added: “The biggest mistake a university could make is to underestimate its consumers.”

And, as a helpful primer, they have reminded people of a piece I wrote for them on this topic some months ago:

Unfortunately things aren’t quite as straightforward as they first appear. Higher education is not just like any other business and there are real issues with the information available to assist prospective students. However, student behaviour is changing and there is some evidence that they are becoming rather more demanding.

We are all consumers. We are all customers. In every aspect of our lives we are treated more than ever before like this. In choosing schools for our children, in hospital selection and which bus company to use we are expected to behave as consumers. And these are public services. Not to mention the bewildering choice we face when making a more straightforward product choice, for example for a vacuum cleaner or a tin of beans.

However, higher education is a slightly unusual kind of business and differs from other businesses in a number of ways.

Obviously that’s not all of it, just the opening. The full piece is available via the Guardian Higher Education Network.

So, students as consumers? Or not?

Fashion victims?

Another exciting new higher education development

The Evening Standard, along with much of the fashion press (I believe), carries this story about a new fashion and design college:

MOVE over AC Grayling, there’s a new college in town. Magazine publisher Condé Nast is launching a private college for fashion and design next year, which will be a potent rival to the London College of Fashion, Central St Martins and Chelsea, all part of the University of the Arts London.

The Condé Nast College of Fashion & Design will offer its students a year-long “Vogue” fashion foundation course, and “House & Garden” interior design and decoration, with further Masters courses to follow.

The college, which opens in September 2012, will also provide tuition on journalism, luxury brands and business skills, and will be headed by Susie Forbes, editor of Easy Living.

When AC Grayling opened the New College of the Humanities, he came under fire for commercialising education. So how will Condé Nast fare with its branded courses?

In the Independent, there are a few more details including the suggestion that the college will take 300 students a year. And all sources carry this marvellous quote:

“Condé Nast is perfectly placed to enter the world of education,” says Nicholas Coleridge, managing director of Condé Nast. “The reputation and authority of our brands puts us in a strong position to teach and inspire the fashion and decorating talent of the future.”

It’s interesting that this venture really hasn’t generated anything like as much hostility as the New College of the Humanities, despite the potential for significant competition with existing long established providers in London. Perhaps it’s because the proposal isn’t really being taken seriously because no academics seem to be involved. But there is a lot of money behind this (and the former editor of “Easy Living”) and isn’t this exactly what the White Paper was envisaging in opening up higher education to entrants?

“For-Profits Eye the British Market”

New opportunities for private providers

The Chronicle of Higher Education has a good piece on the interest for-profit providers are taking in the UK market. Robert Lytle of the Parthenon Group, management consultants with an interest in education, seems a bit sceptical:

“It’s a very expensive market to operate in, and the profitability is not there,” says Mr. Lytle, noting that, along with the rest of Europe, Britain is “relatively stagnant” and “just not as attractive” as countries like Malaysia and Singapore, which are experiencing rapid growth. Britain and continental Europe also lag in the development of an online higher-education market, which has been a major growth area for American for-profit companies.

I don’t think this was quite the response the authors of the White Paper were expecting to the bold reforms proposed. Stagnant? Us?

There is also an interesting comment on the value or otherwise of degree awarding powers:

Mr. Lytle, of Parthenon, says there are differing views about how important degree-awarding powers will prove to be for companies seeking to expand their presence in Britain. “One school of thought says they are very overvalued,” he says, while others contend that having such autonomy is “terrifically important because it means you can’t be held hostage by the degree-awarding university.”

Ms. Noone, of Kaplan, says that once tuition at public universities is allowed to rise next year to as much as £9,000, or $14,700, from its current cap of about £3,000, pricing pressure from universities may prove to be the greatest barrier to entry into the marketplace for private providers. Most universities “won’t want a partner who is offering the same degree at a lower price,” she says. Now that students at for-profit institutions will have access to government-backed loans, universities will be facing the prospect of direct competition with partners offering the university’s own degrees at potentially significant discounts.

I’m not at all certain that degree awarding powers are over-valued. They are rightly prized and should be extremely difficult to secure. The White Paper is likely to change that though. Unfortunately.

Certainly whether or not American for-profits seek new markets in Britain will be influenced by their struggles at home. The Apollo Group, parent company of the for-profit giant University of Phoenix, saw its U.S. enrollments decline more than 16 percent in the past year, while Kaplan saw U.S. enrollments plummet 30 percent.

Whatever the eventual new contours of the higher-education landscape, opportunities are likely to be created, not just for the for-profit sector but for mainstream American universities seeking new avenues of expansion, says Mr. Lytle. “You could imagine someone like a Johns Hopkins saying, ‘We have a terrific brand of health care, there are lots of smart students in the U.K. Let’s go get them.'”

This final point is a particularly interesting one. The idea of leading US universities setting up in the UK, whilst intriguing, is perhaps though unlikely to take off in a major way given that all of the opportunities are likely to be at the discount end of the market.

White Paper inspiration from the US?

A somewhat different approach to cost savings in the new fees regime

Not sure if this was a source of inspiration for the White Paper. It looks like something of a blue print for efficient management at the bargain basement end of the new private providers (but perhaps not for the New College of the Humanities). The model presented here from Professor Vance Fried and published by the American Enterprise Insititute for Public Policy Research has a number of what look like helpful pointers for the new private providers:

“Higher education insiders sometimes point to the increasing cost of auxiliary services like student housing and big-time athletics as a major cause of large tuition increases. This is a red herring,” notes Fried. “Football, good food, and hot tubs are not the reason for runaway college spending. Rather, the root cause is the high cost of performing the instructional, research, and public-service missions of the undergraduate university.”

To identify areas ripe for cost savings, Fried creates a provocative experiment: what would it cost to educate undergraduates at a hypothetical college built from scratch? Fried concludes that undergraduate colleges should consider five major cost-cutting strategies:

1. Eliminate or separately fund research and public service

2. Optimize class size

3. Eliminate or consolidate low-enrollment programs

4. Eliminate administrator bloat

5. Downsize extracurricular student activity programs

“Rather than focusing only on the big-ticket items that tend to dominate debates about college costs, Fried argues that the real levers for increasing efficiency include rethinking student-faculty ratios, eliminating under-enrolled programs, and trimming unnecessary administrative positions,” explains Andrew P. Kelly, AEI research fellow and editor of the Future of American Education Project. “His recommendations are a must-read as states look to rein in college costs.”

There is clearly a strong ideological undercurrent here. And the points about ‘administrator bloat’ and drastically reducing student activities appear particularly narrow-sighted and significantly at odds with the White Paper notion of putting students at the heart of things. So perhaps extremely cheap and not very cheerful is not the way forward after all.