AUSTRALIA: Foreigners providers find the going hard

Despite the efforts of some of the world's largest foreign private universities to set up shop in Australia, none have yet succeeded in making a profit from selling higher education - or even attracting significant numbers of students.

In recent years, at least six overseas institutions have said publicly they planned to establish campuses here, most in Adelaide, to compete with Australia's 38 public and three private universities. But only five have actually done so and one of them, Britain's Cranfield University, gave up after a fitful start and went home.

Last year, it seemed likely that the US-based Carnegie Mellon University would shut its Adelaide campus as well.

That university was the first foreign institution to be lured to South Australia in 2005 when the state government offered the extraordinary sum of AUD20 million (US$21 million) to assist the wealthy private American institution by refurbishing the Torrens heritage building in the centre of the city - a building which Carnegie Mellon now shares with an offshoot of University College London.

The government also provided start-up funding to Carnegie Mellon and met its operational costs as well as sponsoring student fees - all this just so the university could initially run two postgraduate programmes for 75 students. Five years on, the branch campus is still struggling to pay its way and faces an uncertain future.

Two years ago the University of Adelaide, a member of the research-intensive Group of Eight universities, announced that it had joined forces to establish a 'Kaplan University' in the city.

Kaplan, a multi-billion dollar-a-year wholly owned subsidiary of The Washington Post company, offers higher education, professional training and test preparation, plus services for schools and after-school learning programmes in more than 30 countries.

The Adelaide venture was to be Kaplan's first overseas university campus. A press release from Adelaide University said the partnership would see both universities "working together to expand access to high quality career-oriented educational programmes".

Kaplan's first intake was expected this year with a projected 5,000 domestic and international students enrolled in Adelaide and more online within five years.

Although that announcement caught many of the other Australian universities by surprise, Adelaide and Kaplan have had a long-standing relationship through Kaplan's Bradford College. The college offers university entrance programmes to international students with the majority going on to study at Adelaide.

Kaplan has other offshoots in Australia, including the Kaplan Business School, Kaplan Professional, Kaplan Aspect, the Murdoch Institute of Technology in Perth and Carrick Education, a private college group offering vocational and higher education courses which Kaplan bought last May.

Although Kaplan and Adelaide had signed a cooperation agreement in June 2010, a year later the scheme was abandoned with Kaplan claiming that regulatory changes with the establishment of the Australia's new Tertiary Education Quality and Standards Agency, "and a rapidly evolving education services market", had made it decide not to continue with the university accreditation process in Australia.

Adelaide Vice-chancellor Professor James McWha said the "shift in business focus" had opened up new possibilities for collaboration. McWha said both institutions could in future work together to expand access to high quality career-oriented education programmes through a range of alternative pathways.

Despite clear evidence that foreign universities find establishing a profitable foothold in Australia hard going, US institutions never seem to give up.

Now Baltimore-based Laureate International Universities is to try its hand and plans to open a 'Torrens University Australia' in Adelaide within two years, also in the popular Torrens building. As with most of the other foreigners, Laureate will offer courses in management and commerce, but also education and creative arts.

Laureate has more than 55 campus and online universities in nearly 30 countries and former US President Bill Clinton is its honorary chancellor.

The university says it plans to initially enrol 200 students and after 10 years to have 3,000 students, half local and the rest from overseas. Other foreigners have made much the same claims although none have yet achieved anything like that number.

Should Laureate be more successful, Australia will have 38 public and three private universities: the long-standing Bond University in Queensland, the Catholic University of Notre Dame Australia in Perth, both of which are Australian, and the proposed new Torrens University. As well there will be the two foreign offshoots of Carnegie Mellon and University College London, which do not have university status.

But Australia's higher education sector is rapidly changing and there are now more institutions - called 'higher education providers' - than ever before. Among them are a growing number of privately funded non-university higher education providers offering a range of fee-paying courses leading to bachelor or masters degrees.

Unlike the self-accrediting universities, most of the private providers offer awards that have been 'accredited' or approved by a state or territory authority as meeting the appropriate standards. In the past, most students at these institutions paid the full cost of tuition themselves and this kept enrolments down as well as the number of institutions.

But in 2005, the federal government announced a loan scheme called Fee-Help (fee higher education loan programme) to assist Australian students meet part or all of the cost of tuition charged by eligible private providers.

This gave a substantial boost to private institutions, which could then sell their courses at a much cheaper rate. Inevitably their numbers began to expand so there are now almost 100 institutions, including universities, public technical and further education colleges, and private providers, offering various higher education courses.