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INTERNATIONAL HIGHER EDUCATION

Private Higher Education: Patterns and Trends

Daniel C. Levy
Daniel C. Levy is Distinguished Professor at the University at Albany, State University of New York, and director of the Program for Research on Private Higher Education. E-mail: DLevy@uamail.albany.edu.

In its 12 years International Higher Education has published many articles on the continued growth of higher education, as well as on related matters such as access policy. Within this powerful higher education growth, even more spectacular is the growth of private higher education. Today, best estimates indicate that about one in three students globally is in the private sector.

There is no magic year that marks the inception of accelerated private growth. Certainly the last two decades have been unprecedented in private growth, but each country has a different starting date or period in which private enrollment begins to soar. As recently as 1980, while much of the world already had private higher education, still many countries did not. Now virtually all the world's regions have private higher education in the large majority of their countries and pre-existing private sectors have grown strikingly.

The private higher education surge mixes with a substantial degree of privatization in a range of other economic and social fields. However, neither primary nor secondary education has paralleled higher education for the proportional surge of private to total enrollment.

In some ways the most arresting private higher education growth has come in regions where two decades ago, even sometimes one decade ago, there was no such sector. In the Middle East, emergence is often basically a creature of the new century, otherwise of the 1990s. We are referring to such varied countries as Egypt, Israel, Jordan, Oman, Saudi Arabia, and Syria. With only scattered examples dating to the 1980s, private growth in Africa has more recently spread to country after country, including all the largest ones. Predictably, the private sector is larger in anglophone than francophone countries.

Latin America and Asia generally have longer continuous private higher education experience. But in the former it has recently grown to almost half (45%) of total enrollment and includes every country except Cuba. Elsewhere in the region some countries have gone from minority to majority private enrollment. Only with the 1989 fall of communism did private higher education emerge in modern eastern and central Europe and it spread like wild fire in the first half of the 1990s. That leaves only western Europe as the outlier region where the public sector remains almost unchallenged by private growth (though it itself is partially privatizing). In Asia several countries, most importantly China, have launched private sectors. Several older private sectors account for most of their countries' higher education enrollment (notably Japan, Indonesia, the Philippines, South Korea, and Taiwan).

So powerful is global private growth that almost no country has seen a decline of the private share in the last decade or two. This is not to rule out that changing national conditions could lead to a decline. Those changed conditions could include an aging population (Japan, eastern Europe), partial privatization of public sectors, and the threat that populist regimes such as Venezuela's could curtail private institutions.

Follow the Leaders
Two very common myths about private higher education are more false than true. One is that private-public differences are insignificant as both types pursue public purposes. The second is that each country is unique so we cannot intelligently generalize about private higher education. In fact, the private growth of the last decade or two is remarkable not only in weight but in replication of patterns long observed in other countries; among these patterns are prominent private-public differences.

Regarding patterns of growth, for example, we continue to see private emergence outside government plans (the Middle East excluded) and often taking officials and others by surprise. Private institutions continue to be considerably smaller than public ones on average. The basic causes of private expansion remain religion, social advantage, and absorption of the accelerated demand for higher education. As before, the causes of the growth now often shape the kind of ensuing private type that functions.

In finance, the great majority of private institutions (old and new) continue to be overwhelmingly financed privately, usually through tuition and fees. Philanthropy, corporate contributions, and alumni giving are still rare outside the United States, and elite private universities remain almost nonexistent outside the United States. In governance, private institutions continue to be more hierarchical than public counterparts, limiting faculty and student participation. The private places still concentrate on a few fields, mostly in commercial areas. They remain narrower than public institutions in this and other respects. Another common and enduring private-public distinction exists where the private institution represents a religious or ethnic group. And concerning the demand-absorbing institutions a crucial challenge yesterday and today is to be able to distinguish "garage" operations from serious operations. Even the serious institutions rarely pursue academic research or graduate education and rarely have ample full-time faculties, top students, and laboratories and libraries.

New Pathways
But it would be wrong to say there is nothing new under the sun. We should identify several key fresh tendencies and hybrid forms or developments. One tendency is the increased role of foreign institutions. In many instances they construct partnerships with local institutions or government. Usually the partnerships involve collaboration between countries of more and less development. On both ends, the institutions may be private or public but probably a disproportionate share of the involved local institutions are private. In other cases (e.g., Greece) local institutions engaged in partnership with foreign institutions get leeway outside national rules (and cannot offer national degrees).

Local-foreign partnerships increasingly have a for-profit side. The financial incentive for Australian, UK, or US universities is clear, even if their institutions are juridically public. It appears that an increasing proportion of the local actors are for-profit, in conjunction with "branch" campuses of foreign universities.

In other respects, the for-profit growth is yet more astonishing. Several for-profit businesses invest in higher education. The three most prominent internationally are Laureate (formerly Sylvan), Apollo (which owns the massive University of Phoenix in the United States), and Whitney International. Clearly these companies are in it for profit and do not claim otherwise. Alongside them is a growing list of domestic investment companies. In some cases lines between ownership and investment are fuzzy. Laureate has often bought up existing private nonprofit institutions and invested, yet the institutions remain legally nonprofit, as law in countries such as Chile and Mexico proscribes for-profit higher education. However, the line between nonprofit and for-profit is notoriously unclear. Many legally nonprofit institutions are functionally for-profit, simply not distributing financial gains to stockholders. Meanwhile, even truly nonprofit institutions are becoming more commercial. For-profit growth is one of the striking global tendencies within the United States.

Even where the basic private types of yesterday are the private types of today, changed mixes emerge. There is a relative decline of religious focus. Whereas elite private higher education is rare outside the United States, exceptions arise (perhaps Turkey's Bilkent University) alongside longer-standing Japanese and Korean cases. A much more common phenomenon is the development of "semielite" private institutions. These may evolve out of some of the serious demand-absorbing institutions. Though their elite nature may be more about clientele than academics, some do achieve distinction, often in a niche field. The niche field is usually business related. Semielite universities can be markedly entrepreneurial. They could evolve into a competitive threat to public universities of the second tier.

In terms of sheer numbers the most important private development is the clear dominance of demand-absorbing institutions. In certain countries (e.g., Brazil, Philippines) such institutions have for many decades held the majority of private enrollment, sometimes the majority of total enrollment. Now, however, the dominance in growth and enrollment numbers of these institutions spreads to more and more countries. Unsurprisingly, the proliferation, against a legacy of little regulation, has given rise to increased concern about quality assurance and to the establishment of public accrediting agencies in country after country.

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