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Global ambitions in higher education

The benefits and pitfalls of establishing an overseas campus
University Business, May 2015
  • Established in 2008 and open to its first class in 2010, NYU Abu Dhabi has grown to a Class of 2018 with 263 students from 79 countries. (Photo: Silvia Razgova and Phil Cheung)
  • Construction of and operations for Kean University’s 900,000-square-foot Wenzhou-Kean campus in China were possible due to the Chinese government, which contributed approximately $500 million.
  • Students enrolled at The University of Utah’s South Korea campus must spend at least a year in Salt Lake City, which exposes them to the home campus and brings in tuition dollars.
  • While still far from common practice, international branch campuses have risen from a worldwide total of 15 in 1995 to 231 in 2015. Leading the charge are U.S. institutions, with 83 campuses abroad.

The growing view of higher education as a global commodity has driven many ambitious institutions to deepen their international presence by setting up shop overseas.

While still far from common practice, international branch campuses have risen from a worldwide total of 15 in 1995 to 231 in 2015, according to the Cross-Border Education Research Team (CBERT) at the State University of New York at Albany. Leading the charge are U.S. institutions, with 83 campuses abroad.

“American higher education is in high demand, especially in the so-called BRIC countries,” says Dawood Farahi, president of Kean University of New Jersey, referring to efforts in Brazil, Russia, India and China. “That’s an opportunity we should take advantage of,” adds Farahi, whose institution is the first public school in the U.S. to establish a full-scale campus in China.

Such endeavors, though, are not without substantial challenges. And they aren’t right for every school. The key is to take a hard look at the benefits and potential pitfalls, and weigh them against institutional mission, goals and culture.

Making dollars and sense

Early on, international branch campuses were seen as “great money-making initiatives,” says Kevin Kinser, co-founder of CBERT and senior researcher at SUNY Albany’s Institute for Global Education Policy Studies. That notion, though, has been largely dispelled.

Tuition dollars from most of these campuses are used to support the branch and are not funneled back into the U.S. “It’s much more about projecting the image of being a global university,” he says.

For New York University, which has campuses in Abu Dhabi and Shanghai, building a strong international reputation and presence has been an important strategic initiative, says John Beckman, vice president of public affairs. The campuses have helped attract scholars interested in global scholarship and built the home campus’ pool of incoming international students, which make up nearly 20 percent of this year’s freshman class, he says.

Branch campuses can also help provide colleges and universities with access to multinational company partnerships—a priority for Arkansas State University, which is slated to open its Querétaro, Mexico, campus in 2016.

Foreign campus do’s and don’ts

Do leverage existing relationships with overseas partners.

Don’t dive into a partnership without extensive market research.

Do encourage home-campus support and interest.

Don’t require faculty and department involvement.

Do require overseas students to study at the U.S. campus.

Don’t expect a foreign campus to be a cash cow.

Do be clear with the host government about policies regarding academic freedom.

Don’t underestimate cultural differences. Be prepared for the PR fall-out.

For Kean, says Farahi, an additional advantage is being able to offer the university’s students—many of whom are first-generation—the chance to study abroad at no extra cost.

While revenue may not be the main driver of these initiatives, there is money to be made. Students at The University of Utah’s Asia campus in South Korea are required to spend at least one year in Salt Lake City, allowing the home campus to collect tuition and fees—a significant stream if the campus can hit its target of 2,000 students within six years. Michael Hardman, the university’s chief global officer, recommends this requirement as a best practice to any institution considering an overseas campus.

With tuition revenue that does come into the U.S., however, currency exchange can be challenging. Because China imposes limits on how much money can be taken out of the country, Farahi says Kean has made arrangements with two U.S. banks in China that will accept Chinese renminbi and reimburse the New Jersey campus in U.S. dollars.

Officials insist that starting an international branch is not a financial problem for the home institution. Kean’s campus in China, for example, “doesn’t cost Kean or the state of New Jersey a single penny,” says Farahi. The Chinese government provided roughly $500 million for operations and construction of the 900,000-square-foot Wenzhou-Kean campus, which was completed in 2012.

Arkansas State’s $75 million Mexico campus is funded through private gifts to Arkansas State University CQ, a nonprofit organization in Mexico that promises to underwrite any operating deficits for up to three years after courses begin.

The South Korean government provided free faculty housing, buildings and student services at no cost to The University of Utah, with the goal of making the Asia campus self-sustaining through tuition dollars within five years. To mitigate financial risk, Hardman of Utah suggests protecting the home campus from liability by creating a separate LLC or not-for-profit structure.

Still, notes Kinser of CBERT, launching an international campus is not exactly cost-free. The expense of administrative oversight from home base is hard to calculate—and can add up.

Also, he says, “to offer a program overseas in a way that actually builds rather than potentially challenges your reputation, you have to devote resources to traveling back and forth and educating those at home and at the branch campuses about what this international expansion means.”

Managing academic freedom and standards

Perhaps the biggest threat to an institution’s reputation lies in the realm of academic freedom. NYU recently caught flak when a professor, Andrew Ross, was denied entry to the United Arab Emirates after criticizing labor practices in the country.

While NYU declined to be interviewed about the issue, its statement claims, “We cannot know all the thinking that goes into any immigration authority’s decisions about who is or is not granted a visa,” and continues to note that “whenever such cases arise we emphasize the principle of mobility and advocate to the relevant decision-makers that any limitation should be justified by good cause.”

But according to Kinser, the school has not done enough to make its stance clear, which demonstrates the importance of determining protocols in advance when conflicts with the host country arise.

“The initial response from NYU was, ‘Well, it doesn’t concern us,’ ” he says. “To me, this really affects the kind of program they’re going to be able to offer there, unless they’re OK with self-censoring their [Abu Dhabi] campus because it will offend their host. From my perspective, that’s a perfectly legitimate response, but it should be named up front.”

Being very clear about cultural differences is crucial, says Farahi of Kean. “[Host governments] need to know which values are not negotiable,” he says. “If there are differences in rules and laws, you have to find ways to solve those.”

Ensuring students have free access to information was a key priority for Farahi, for example. While the use of Google in China is restricted, the government’s agreement with Wenzhou-Kean allows students to log into the Kean library system and to access Google USA through a virtual private network.

For Wenzhou-Kean, which annually receives about 20,000 applications for 500 spots, developing a mechanism to marry Chinese and U.S. academic metrics was key to managing admissions standards. The system calculates the equivalent of an American GPA by converting Chinese students’ numeric grades to letter grades. The school also requires an online portfolio assessment.

Once students are admitted, it’s important to be aware of their varying levels of preparation.

Chinese students will outperform American students considerably in math and science, Farahi says. But in terms of English, “Any university that thinks about going to a foreign country, especially China, needs to put a tremendous amount of time into planning for language acquisition. If not, the results will be very sketchy.”

Wenzhou-Kean has roughly 20 English teachers and requires students to participate in an intensive, five-week language-immersion program.

Leveraging relationships

Many foreign campus initiatives arise from preexisting relationships between the home institution and the host country.

The South Korean government invited The University of Utah to be among the first four U.S. and European colleges—along with George Mason University in Virginia, SUNY Stonybrook and Belgium’s Ghent University—to set up shop in its Incheon Free Economic Zone.

The invitation came in part because many of the school’s faculty had done research in South Korea with business and academic partners there. This faculty interest “is the primary reason the university explored this opportunity in the first place,” Hardman says.

Kean’s relationship with China started in the early 2000s, when the city of Wenzhou sent about 50 of its officials to Kean to spend 15 months earning master of public administration degrees. The chairman of Wenzhou’s Zhejiang Province, Xi Jinping—now China’s president—visited Kean in 2006.

He told Farahi that a couple of people on his immediate staff were Kean graduates and that he wanted to send more students in the future. “I told him, ‘Well, Mr. Chairman, there’s another way,’ ” Farahi says. “ ‘We can come to you.’ ”

This relationship has helped the initiative progress relatively quickly even though bureaucratic challenges are an ongoing struggle, Farahi says. Because of the heavily centralized political culture in China, “it takes a tremendous amount of time to get things done,” he says.

Knowing who your partners will be on the other side, and thoroughly assessing that relationship beforehand, is critical, adds Farahi.

While existing relationships can help get things started, they’re not enough to make it work long-term. Kinser of CBERT says that all too often, a prominent member of an institution “becomes the cheerleader and drives the whole institution toward a branch campus that is not part of its mission.”

Thorough market research can help determine the right place for an overseas campus—and whether or not to launch one in the first place—better than active solicitations or following the trend toward a popular location.

Without proper management, a branch campus initiative can also disrupt relationships with current faculty and staff. Hardman says it’s important to make participation optional for both individual faculty and departments while exposing them to the benefits of engaging with an extended global campus.

Ioanna Opidee is a Connecticut-based writer and adjunct professor.

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