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    Ha Hoa Tien University, a private university founded in 2007 in the neighbouring province of Hanoi, used to be owned by a steel and construction corporation. In the first four years of its operation, it welcomed and said goodbye to four rectors – the longest-serving being in office for just two years – before the corporation’s chairman directly took charge of the university. The number of new students enrolled annually remained as low as 200 for years, less than a 10th of the optimistic forecast the corporation had set itself. The corporation finally sold the university to another investor in early 2016. The commercialisation of education The story of Ha Hoa Tien University illustrates how higher education has become commercialised in Vietnam. The concept of commercialisation of higher education was legalised in Vietnam for the first time in the Education Law of 2005. This silently omitted an article prohibiting education commercialisation that had been consistently emphasised in previous legal regulations on education. Also in 2005, through a prime ministerial ruling, private universities were legalised and instructed to organise as corporations whose board of governance could consist solely of shareholders and could exclude faculty and student representatives. From then until recently, corporation-like private universities have been the only legally recognised model for private higher education. For many corporations, these policy changes, together with the government’s resolution to expand the higher education system and increase the share of the private higher education sector, have acted as an appealing invitation to them to participate in the higher education sector. In 2006, FPT, a noted Vietnamese IT company, founded a private university, the first corporation-affiliated university in Vietnam. Other corporations like Ha Hoa Tien followed and their universities bear the name of their founding corporations. Vingroup, a conglomerate in real estate and tourism, announced in 2014 that it would soon establish two of its own universities. Mergers and acquisitions However, in recent years mergers and acquisitions, or M&A, have provided a stronger incentive for corporations to get involved in Vietnam’s private higher education sector. In 2012, a private university in Ho Chi Minh City – Van Hien University – was ‘rescued’ by a corporation. Founded in the early years of the non-public higher education sector, Van Hien continuously suffered from under-enrolment due to ineffective management and disputes among its governing board members. These challenges increased when the Ministry of Education and Training gradually tightened the regulations on private universities. The university was finally banned from recruiting students in 2012 due to its inability to meet the land ownership requirement – all of its campuses were rented. Being acquired by the Hung Hau Corporation was the last resort. When Vietnam’s private higher education sector hit problems, M&A became an attractive option. Poorly-managed and under-financed universities were good targets. The University of Economics and Finance, one of the universities that charged the highest tuition fees in Vietnam, was, after years of enrolment difficulties, sold off to an investor which already owned another large and well-run private university in the same city. Hong Bang University, which once had a very good enrolment record in the private sector but later suffered from a scandalous fall in quality, was finally taken over by a corporation in 2015. The Nguyen Hoang group, its new owner, purchased another university in a neighbouring province – Ba Ria Vung Tau University – not long after the acquisition. This M&A pattern was also seen in Central Vietnam, a less dynamic economic region. Quang Trung University was acquired by the Hoan Cau Group, an influential real estate and tourism corporation, in 2014. One underlying reason for the ongoing M&A trend is the increasingly numerous and complex requirements that private universities have to meet. The accreditation process includes 111 criteria as of May 2017 and has been given more importance as a centralised policy tool. Those institutions that fail to meet accreditation standards face a ban on recruiting students. In addition, the government is now monitoring faculty-student ratios more closely. Moreover, the requirement that private universities must own at least a five-hectare (roughly 12-acre) campus is far beyond the capacity of many urban private institutions that lack a good source of funding. With the regulations tightened, private institutions with a poor record on recruitment and management have found themselves unable to keep operating. Other changes include new regulations brought in in 2005 setting out that those who propose to establish a new private university had to secure a minimum of VND15 billion in charter capital. That level was then raised to VND50 billion in 2010, to VND250 billion in 2013 and to VND1,000 billion (roughly US$44 million) in April 2017. This has obviously dampened the enthusiasm of many corporations for founding a university from scratch. More significantly, a recent government resolution to limit the establishment of new universities has put off even determined and well-resourced corporations. Hence, acquiring an existing private institution is the preferred choice. Motives of corporate investors For many people, profitability is the obvious reason for corporations to invest in the higher education sector. This is particularly the case in Vietnam and many other Asian countries where the seemingly endless need for education has not yet been met. However, some corporations may be looking to make much more significant profits not from the university itself but from the real estate projects that surround it. Like other public infrastructure, a good education institution is always a plus for its neighbourhood and helps to increase the value of the surrounding real estate. This explains why real estate conglomerates look at private universities with extraordinary enthusiasm. Moreover, additional profit could also come indirectly from human resource development. Corporation-affiliated universities sometimes act like an in-house human resource training centre for their founding corporations. The Hoan Cau Group promised to open its doors wide to graduates from Quang Trung University, for instance. Regardless of what drives corporations to invest in private universities, the fact is that Vietnam’s private higher education sector is increasingly likely not to be in the hands of educators. The rise of corporation-affiliated universities is a higher education phenomenon worth the attention of both policy-makers and academics.
    6 months ago by @prophe
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    Vietnam’s first non-state university, Thang Long University, was founded in 1988 by a group of intellectuals. It had to wait for five years to be recognised as a successful pilot of a non-state higher education model. After this a series of legal frameworks were enacted to regulate three different types of non-state universities: those ‘people-founded’ institutions established by social and professional associations; private universities set up by corporates or individuals; and those which are semi-public – set up by the state but wholly financed by private income. However, because of the sensitivities in a communist country, no private university was allowed. The remaining two types of non-state university enjoyed more than a decade of stability and prosperity. An uneasy introduction The government officially legalised private universities in 2005. A few months later, the new version of the Education Law, passed by the National Assembly, recognised only two types of non-state universities, namely people-founded and private. The semi-public model was phased out. A year later, the prime minister allowed the first 19 people-founded universities to transfer to private status, with the remaining expected to follow suit. However, that transfer is still incomplete despite detailed guidance from the Ministry of Education and Training issued in 2014. One reason for the delay is the significant differences in ownership between people-founded and private universities. The management board of people-founded universities consists not only of investors but also the university’s founders, the rector, faculty representatives etc. By contrast, investors are the sole owners of private universities, holding the highest decision-making authority. Hence, it was difficult to reach an internal consensus on the transfer of a people-founded university to private status. For many of those that did reach a consensus, private university status brought more uncertainty than opportunities. Hung Vuong University started and completed its transfer in 2010. However, an internal dispute quickly arose and affected the Ministry of Education and Training. Both the chairman of the management board, a known businessman, and the rector were dismissed after revelations of wrongdoing by inspectors and student recruitment was suspended. In 2016, after firing hundreds of staff and faculty the dying university had only a handful of staff and around 50 students left, but a huge debt of more than US$2 million. This was difficult to believe for a university founded by a noted doctor and professor, led by committed faculty and with over 10,000 students in its heyday before the transfer. Hung Vuong shared the same fate as many first-generation people-founded universities. In the early 1990s, the private economy emerging from the Doi Moi (Innovation) policy in 1986 was still immature. Capitalists and investors with stable financial resources were almost non-existent. Hence, initial investment in non-state universities came from hundreds of people, some of whom contributed non-monetary assets. In such cases, determining the value of non-monetary assets so contributors could be compensated, as was required during the transfer process, proved complicated. Once that obstacle had been overcome, another one lay in waiting. In the mid-2000s, entrepreneurs and corporates who had prospered from the country’s amazing economic growth started targeting private universities as super-profitable investments. With abundant financial resources, they quickly secured management positions in those universities and turned them into money-making machines. Inside these universities were two opposing factions: committed faculty who prioritised education quality and investors whose ultimate goal was maximising profit. Private-public competition This sort of turbulence was not the only thing private universities had to face. They have also been thrown into direct and fierce competition with public universities that are usually the first choice for high school graduates. It is not the low, subsidised tuition fees that attract these students, but the quality of education offered and the chance to get a recognised graduate degree. However, public universities, constrained by state funding, must deal with the enrolment quota set by the ministry. This unintentionally means that private universities are able to recruit those students who fail to get into public universities. The situation has changed significantly since 2014 when several top public universities were approved to pilot a financial autonomy scheme. This means they will no longer have to rely on state funding and are free to set their own student recruitment quotas. Currently, 13 public universities, several of which are national elite universities, have piloted this scheme and Deputy Minister of Education and Training Professor Bui Van Ga has said the number of public universities applying for the scheme will not be capped. This policy puts private institutions in direct battle with public ones, a fight which private institutions are much less likely to win. Not-for-profit private higher education ‘Not-for-profit’ status emerged for the first time in the Higher Education Law of 2012. Two years later, not-for-profits were more clearly defined in the University Charter as universities where “shareholders receive dividends in proportion to their shareholding, although the dividend must be lower than state bond rates”. The legal emergence of ‘not-for-profits’ in 2012 brought problems that were equally severe as those which surfaced in the case of private status transfer. Internal conflicts arose immediately inside many private institutions that had been for profit. The not-for-profit model, often coupled with the kind of liberal education synonymous with the Ivy League, is appealing to educators. By contrast, investors in private universities saw the model as posing a serious threat to their investment. These fierce internal conflicts turned Hoa Sen University, a high-performing private university that was highly valued by employers, upside down. The rector claimed that the university had been not-for-profit in its original design in the early 1990s. However, a group of shareholders held an extraordinary meeting and voted against her and the board chairman, who was also an intellectual inspired by the not-for-profit model. For the two years following the introduction of the new policy, news of internal conflicts at the university hit the headlines and sparked heated debates among educators, policy-makers and society at large. The battle finally ended just before the close of 2016 when the government officially recognised the new management board which immediately dismissed the tenacious rector and re-directed the university back to the ‘normal’ path of private higher education, despite faculty and student protests. A gloomy outlook In 2013, the Vietnamese higher education system consisted of 428 institutions, 85 of which were private. Private universities enrolled almost 270,000 students, accounting for roughly 13% of total enrolment numbers. Compared with the target of 40% by 2020 set by the Higher Education Reform Agenda in 2005, the current percentage is too modest. Most doubt this goal can be achieved. Private higher education, whether for-profit or not, has proven to be a successful model in many countries. However, this does not seem to be the case in Vietnam, due to many factors, including political ones. The battle between ‘private’ and ‘for-profit' education and political sensitivities due to the country’s communist background, combined with an inconsistent approach, have hampered the growth of private institutions. What is more, the number of students in private institutions has shown signs of stagnation. All of these factors collectively paint a gloomy picture for private higher education in Vietnam.
    6 months ago by @prophe
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    Hundreds of private colleges and universities have opened in China in the past decade in response to soaring demand for higher education in the world’s most populous nation.
    6 months ago by @prophe
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    Representative Tom Sannicandro joined his House colleagues Wednesday in passing a bill that protects students who enroll in for-profit occupational schools by expanding oversight of the industry, which has seen exponential growth in enrollment and profits in the last several years.
    6 months ago by @prophe
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    Sen. Dick Durbin [D-Ill.] recently proposed a bill that would dramatically change the way federal money can be allocated to for-profit colleges. Currently, for-profits are bound by what’s known as the “90-10 rule,” which says that 10 percent of for-profit college and universities’ revenues must come from sources outside of federal student aid. But G.I. Bill benefits can be counted towards the 10 percent, making them a lucrative source of revenue for the for-profits.
    6 months ago by @prophe
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    A little-known California law has dealt a blow to nearly half of the for-profit college campuses in the state, barring them from offering students a coveted Cal Grant this year.
    6 months ago by @prophe
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    Hundreds of private colleges and universities have opened in China in the past decade in response to soaring demand for higher education in the world’s most populous nation.
    6 months ago by @prophe
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    With education sector requiring an investment of over $150 billion in the next 10 years, the government has proposed new private partnership models for expansion of higher education sector in the country. The government has proposed setting up of large education hubs in different parts of the country anchored by large public/private sector enterprises funded through their allocations for corporate social responsibility.
    6 months ago by @prophe
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    US traditional public and non-profit private tertiary institutions have frequently criticised their for-profit competitors for failing to ‘be like us’. The latter’s business plan does not complement the former’s self-anointed purity. If for-profits pursue an operating surplus or profit for their owners, it must be at the expense of academic quality, they surmise.
    6 months ago by @prophe
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    In past decades higher education in Slovenia has been characterised by increasing globalisation, market-orientation and the privatisation of public and growth of private institutions. But the difference between the public and private sectors is not as obvious as one might think, with the former looking increasingly like the latter.
    6 months ago by @prophe
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    According to a report from a policy thinktank, private higher education colleges in the UK face being “devastated” by last year’s government clampdown on overseas students.
    6 months ago by @prophe
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    It hasn’t gotten much attention on the campaign trail, but President Obama and Republican front-runner Mitt Romney are sharply divided over one of the most controversial issues in higher education today — the growth of for-profit colleges.
    6 months ago by @prophe
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    Private universities that have failed to move to their own permanent campuses have been given an extended ultimatum of one year.
    6 months ago by @prophe
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    Doubts hang over the plans to open up the UK's university sector to a new wave of private providers.
    6 months ago by @prophe
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    David Cameron and Nick Clegg are to abandon radical plans to reform Britain’s university system that would have seen more private firms competing to educate students, The Daily Telegraph can disclose.
    6 months ago by @prophe
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    The establishment of five private universities here is helping to transform the work force in this part of Cambodia, one of Asia’s poorest countries and a society still living in the shadow of the genocidal rule of the Khmer Rouge.
    6 months ago by @prophe
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    A national convention on Higher Education on Monday denounced the three bills introduced by the government for the control of private institutions and universities, as “draconian.”
    6 months ago by @prophe
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    After weeks of escalating opposition, Sri Lanka's higher education minister has temporarily withdrawn a proposed Private University Bill. But he is hoping to present a quality assurance bill to parliament related to private higher education providers. Meanwhile, lecturers have joined students in protesting.
    6 months ago by @prophe
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    An audit of private colleges in Malaysia has unearthed serious quality issues, with only one in three colleges evaluated doing well in a quality assurance process that could be used by the government to approve or deny them licenses to recruit international students.
    6 months ago by @prophe
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    A burning question for developing countries is whether low quality private higher education is better than none at all, in circumstances where public systems cannot meet soaring student demand. Brazil decided it was and set about rapidly expanding its higher education system, including by opening it to private institutions. Today the country has one of the largest private sectors in the world and it enrols a staggering 75% of all post-secondary students.
    6 months ago by @prophe
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