• The World View

    A blog from the Center for International Higher Education


Money and Internationalization: Cautions and Contradictions


March 27, 2011


Recent discussions raise questions about the financial viability of international higher education ventures. Leaders generally say that branch campuses do not make money in the short run, and are particularly problematical if the host country or institution (as is the pattern in the Gulf) does not pay a significant part of the cost. A panel at the American Council on Education’s annual meeting generally agreed that overseas campuses require significant investments of time, attention, and funds and do not yield a quick return. Supporting this view, as reported on University World News (March 13, 2011), Monash University’s vice chancellor told the Australian Higher Education Congress that establishing a campus in another country requires a vast amount of work, huge commitments of time from senior faculty and administrators, and a long time to implement. All agreed that significant overseas ventures only work if they fit into the university’s long-term strategic plans. Another speaker on the ACE panel, the president of a community college in Texas pointed out that her institution has pursued a different strategy overseas. Their contracts to build capacity have been quite profitable—but this has been (for the most part) providing assistance in program development overseas.

A further caveat is also reported in UWN. A survey of Indian students studying in the United States reported that only 21% would have remained at home if they had access to American teachers and institutions in India. This relatively small percentage of the outbound students seems to want not only access to an American education, but to America. This statistic ought to make those foreign universities thinking of establishing branch campuses in India stop and think.

The contradiction is that many have seen international education as a kind of “cash cow” and in the past some governments, including Australia’s, have made it a national policy to earn money from international higher education initiatives of all kinds, including branch campuses. Now, some respected higher education leaders are confirming that generating revenue from many kinds of international initiatives is not so easy. And there have been several examples of the failures of overseas, ventures such as Michigan State University in the Gulf and Australia’s New South Wales in Singapore.

The lessons are both simple and complicated. Clearly, universities on both sides—those establishing overseas initiatives and collaborators in the receiving countries—must be fully aware of the challenges involved. As the ACE panelists pointed out, those seeking mainly to make a quick profit will be disappointed. And the dangers of damaging an institution’s “brand and image” are significant if things do not work out. At the same time, especially in today’s difficult environment, many universities engage in international ventures for financial reasons. Some, particularly those at the top of the prestige hierarchy, have other motivations, including building a global image and providing opportunities for research, among others. For public universities, currently under several budgetary constraints and subject to stricter accountability, significant international outreach without a financial return seems quite difficult. Internationalization requires difficult choices and a full understanding of the possible consequences of specific initiatives. Some ventures, such as branch campuses, can be costly in terms of financial and human resources. The ACE panelists underscored the complexity and risks of the situation for an attentive audience.


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