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Last Updated: Saturday, 3 April, 2004, 00:02 GMT 01:02 UK
The university 'market' is here
By Mike Baker
BBC education correspondent

Mike Baker graphic
So now only the House of Lords and the next general election lie between the government's Higher Education Bill and the start of variable university tuition fees in England in autumn 2006.

Meanwhile Labour rebels, and others, continue to worry about the impact of unleashing market forces in higher education.

Yet, surprisingly, no-one has noticed just how much of a market is already operating in student fees.

Although it gets little attention, there are already high-cost, variable fees in British universities. They are the focus of a fast-growing and competitive marketing sector.

No limits

Large numbers of part-time students face variable fees, of course.

But the boom area - big business for many universities - is international students.

For these purposes that means any students recruited from outside the European Union. The latest estimate is that there are about 175,000 overseas, fee-paying students in Britain.

Universities of all types are now investing heavily in this growth market
There are no limits imposed on fees for non-EU students. Undergraduate fees of 7,000 - 9,000 a year are typical and they can be much higher for postgraduates, especially on MBA courses.

Universities of all types are now investing heavily in this growth market. Overseas recruitment has grown by about 6% a year for the past five years.

It is estimated that overseas students are worth about 1bn in fee income to universities and contribute about 8bn to the UK economy.

The expansion of overseas recruitment - Tony Blair's initial target was an extra 50,000 students - is one government education target which has been met with room to spare.

Who wins?

The big growth area has been China. There are now about 40,000 Chinese students studying here.

Nottingham University is planning to open its own campus in China. This will be addition to the campus it already has in Malaysia.

Other fast growing markets include India, Nigeria, Ghana and Bangladesh.

Has this market been dominated by a few big, "elite" universities? That, after all, is the concern over variable fees for domestic students.

Well, it seems not. The "new" universities are more than holding their own. The University of Westminster, for example, has 4,000 overseas students from 144 different countries.

Others, such as Middlesex University, are making overseas recruitment a key part of their growth strategy.

They are not overly impressed by famous names and reputations
A look at how the overseas market is operating does not seem to endorse the fears that variable fees for domestic students will necessarily lead to a two-tier system, although it might suggest the development of niche specialisms.

This is a market where getting the price and the service right are what count. And while quality certainly matters, students are not necessarily attracted just by a famous "brand".

At a conference this week, Colin Gilligan, professor of marketing at Sheffield Hallam University, had some tough words for university recruiters.

The new breed of international student is, he said, "inherently brand promiscuous".

In other words, they are not overly impressed by famous names and reputations but are willing to "experiment with new products and delivery systems".


This means overseas students will increasingly decide which university to come to on the basis of the course itself and their perception of its impact on future employability.

They may also decide not to travel abroad at all but to take their degree via the internet from providers in any one of several countries.

E-learning is developing fast. American and Australian universities are taking a big share of the market.

This is an international market and British universities are not only competing with one another but with the rest of the world, especially the English-speaking world.

According to Professor Gilligan the investment in e-learning in Britain has been "far too low for the challenge we have ahead".

British universities which have got into the overseas market have done well. But, as Professor Gilligan points out, this is a "soft" market where overall growth can allow a steady rise in numbers which might hide a decline in market share.

'No complacency'

Some of this talk of "markets" may frighten traditionalists.

Certainly there are risks. Markets can suddenly collapse. After the 11 September tragedy there were fears that students would become reluctant to travel.

So far, though, the overseas market has continued to expand, much to the relief of the British Council which is helping the drive to recruit overseas.

According to Dr Neil Kemp, director of the council's "Education UK" marketing division, there must be no complacency.

Students do want to learn in the English language which gives Britain - along with the USA, Canada, Australia and New Zealand - a big advantage.

But competition is now coming from unexpected quarters. German universities are offering programmes taught in English. And the Germans, like the French, do not charge big fees for overseas students.

What students want

The British Council has conducted research into the factors which determine where international students decide to study.

In descending order these are: quality of course, employability prospects, affordability, personal security issues, lifestyle, and accessibility.

The emphasis on the quality of education should come as some reassurance to those who fear that market forces might lead to a "pile 'em high, sell 'em cheap" approach to university degrees, whether for overseas or domestic students.

There are already concerns that quality is being sacrificed for profit
The message seems to be that this does not work.

Dr Geoffrey Copland, Vice-Chancellor of the University of Westminster, told this week's conference that overseas recruitment should not be primarily about financial considerations but rather about the wider purpose of achieving "a more inclusive and tolerant society".

However there are already concerns that quality is being sacrificed for profit. There are stories of overseas students, keen to get a taste of British education and culture, who find themselves in classes in Britain composed entirely of other foreign students.

Overseas competition

Privately, university leaders will admit there is a strong temptation to subsidise British students through higher fees for their overseas counterparts.

For the most part, though, universities see considerable, non-monetary value in having the best students from around the world.

Nor is this a one-way process: the best American universities are now competing hard for the brightest British students.

The phrase a "global market in higher education" slips off the tongue rather too easily. But that market is beginning to take shape.

Within the European Union the Bologna process - designed to ensure complete student mobility with course credits inter-changeable from one country to another - is due to be fully implemented in 2010.

Price and quality will be the two keys to survival for universities in the future.

Whatever the merits, or otherwise, of the government's plans for variable fees, British universities are going to be much more susceptible to market forces.

We welcome your comments at educationnews@bbc.co.uk although we cannot always answer individual e-mails.

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