Thursday, October 20, 2011

Low traction for joint courses, transnational education

Even as the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010, awaits clearance in Parliament, a study has found there are not many takers for transnational education or joint degree programmes in India. Joint degree programmes are offered in association with foreign universities or institutes. The study by the Parthenon Group, a consulting firm specialising in business strategy, says low returns on investment from transnational education programmes in India result in lack of demand for these programmes.

“The course fee for a foreign degree in India is much higher than that for a local Indian degree. Graduates in foreign degree/joint degree programmes do not earn higher salaries than those from comparable, private Indian degree institutions. As a result, the payback period for foreign/joint degrees is three times longer than that for local degree. No wonder, the programmes cannot achieve large scale,” said Karan Khemka, partner, Parthenon Group.

India already has more such programmes than any other country. A study by the UK-India Education and Research Initiative (UKIERI) on foreign education providers in India in 2008 (the latest so far) suggested, there were 140 Indian institutions and 156 foreign education providers engaged in collaboration. The total number of collaborations was 225. Each collaboration might have one or more than one programme delivery. Thus, the total number of programmes that were collaboratively delivered was numerically 635.

“Even without the Bill, the opportunity to bring quality into the system is already there. As per data collected by us, transnational education programmes are not making much of a difference and not many students are signing up for these,” said Khemka.

The market for joint programmes in India is $150 million — $90 million for joint programmes and $60 million for franchise ones. The number of students enrolled in these programmes are 35,000 — 21,000 in joint programmes and 14,000 in franchise ones. Enrolment is growing three-four per cent a year, far below than that of Indian degree programmes. The study by Parthenon shows students worldwide usually choose courses for which the payback period is maximum three years, preferably two.

“What we mean by payback period is the salary a recent graduate will get in the first few years after completing the course. Let’s take Dartmouth as an example: the college fee is around $160,000 and a graduate can get a salary of around $60,000 a year immediately after graduation. Therefore, the payback period is 2.6 years, which most students consider to be reasonable,” said Parthenon. “Foreign universities, such as Monash in Malaysia, do relatively well because their graduates speak much better English than students who go to local universities and are able to get a better salary. In India, however, graduates of foreign universities get a salary that is comparable to graduates of local universities. Therefore, most Indian students choose a course that is less expensive, but will get them the same salary.”

While in Vietnam, the payback period for a transnational education programme versus the local degree is four years, the same in India is 5.8 years. In Brazil, Malaysia and Indonesia, the comparative period is 1.1, 2.8 and 2.5 years, respectively. “Most students enrol on foreign degrees because they feel they will be rewarded with a higher salary...we have done research and spoken to employers. There is no evidence to support this,” project manager, UKIERI, British Council India, said in the report. An email sent to UKIERI did not elicit any response.

Institutes admit the enrolment growth for transnational education programmes in India has been driven by addition of new programmes. “When we want to increase enrollment at our institution, we add a new course...we are aiming to triple our enrolment in three years. This will be achieved by adding new courses,” said Director, G D Goenka World Institute. “When institutions seek to grow enrolment, they do so inorganically – add new courses as opposed to looking for new students to enrol on existing courses. When we put these courses side by side with comparable domestic courses, they turn out to be relatively small,” said Khemka.

An official from the Ministry of Human Resource Development (MHRD) dismissed these findings. “The Bill has nothing to do with enrolment of transnational education programmes in India. It’s about bringing quality institutes to India. How these programmes fare, will be seen after it is cleared.”

Source: Business Standard, October 20, 2011

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