“Some of my friends think I’m a snob,” admits Christopher Karp, a 20-year-old aviation management student. Karp attends the business school at the International University of Applied Sciences (IUBH) in Bad Honnef, a spa town in Germany. Rather than enroll in a free public university like his friends, Karp borrowed money from his parents to study for a degree at IUBH.
Globally, one in three higher education students is in the private sector, according to Daniel Levy, an academic at the State University of New York. In Europe, the figure is only one in seven. But the share is set to rise. According to Parthenon-EY, a consultancy, between 2011-2013 the number of students enrolled in private higher education grew at a faster rate than in the public sector. In Turkey, the private sector increased by 22 percent over that period, compared with 14 percent in the public sector; in Germany by 13 percent versus 7 percent. In Britain, the number of higher education students attending an “alternative provider” has climbed from 142,000 in 2009 to around 200,000 now.
Companies are also turning to private universities, further boosting their growth. IUBH offers a “dual studies” hospitality degree, paid for by hotels, whereby students spend alternate weeks on campus and at work. Even its standard degree features a 22-week internship. Other private university groups offer tailored MBAs in sectors such as the wine business, which distinguish them from their more traditional rivals. “We cannot compete with Harvard but we can do better than chambers of commerce,” says Bertrand Pivin, a partner in Apax, a private-equity fund which owns INSEEC, a French B-schools group.
The Istituto Marangoni fashion school in Milan, which with its modernist furniture is as chic as one of the boutiques near the campus, is opening outposts in Florence and Shenzhen this year, adding to those in Paris, London and Shanghai. In Milan, foreign students account for 70 percent of those enrolled, with Chinese students constituting the biggest group. Many are well-off: annual fees start at €13,600 (Rs.10.3 lakh) for a degree-level qualification, rising to €32,000 (Rs.24.24 lakh) for a “fashion elite” course.
Some European governments are starting to welcome private colleges. The Italian government will start to accredit degrees from the Istituto Marangoni this year. In Britain, the government will soon announce how it intends to ensure that good alternative providers thrive and dodgy ones die.
America offers lessons for Europe. The decline of for-profit higher education is one reason Barack Obama could oversee a fall in the number of 18-24-year-olds attending university, argues Andrew Rosen of Kaplan, an education company. It need not be like this. Students can benefit from being treated as consumers. But regulation is needed. Providers should be transparent about admissions and employment data. Failing private colleges should be shut down. Across Europe, students are looking beyond traditional options when deciding their future. Governments should be equally open-minded.