Key misconceptions about the online international student market
Photo by Steve Johnson
Successful student recruitment cycles have always mattered to universities, but they have become even more critical in these challenging times. The factors contributing to a decline in on-campus international student recruitment are well-rehearsed, and leave universities needing to explore other student markets.
One of those markets is the online international student market, which is now garnering a lot more interest. Some UK universities understandably view online degrees as a means to reach vast numbers of students across the globe. At a very basic level, the potential is enormous.
Having sat through several presentations from online education companies, I’ve seen figures that highlight the substantial unmet demand for higher education among the growing millions of prospective students worldwide. I’ve digested the statistics about how many new universities would need to be built each year to meet this demand (700 seems to stick in the mind). And…I’ve stuck around for the mic drop moment……this demand cannot be met by bricks and mortar alone.
If you’re a UK university looking to bolster recruitment and considering ways to expand, on the surface the international online education market is very appealing. However, challenges inevitably arise when universities move beyond their bread and butter UK and international undergraduate markets. Those challenges might be best summarised as ensuring a sufficient understanding of new markets, the opportunities they may present and what is needed to actually capitalise on those opportunities.
In my experience, the international online student market is one where the scale of the opportunity somewhat clouds the realities. It is an area that many in UK higher education do not always fully understand.
Key differences between on-campus and online international student markets
The most obvious misunderstanding lies in equating the on-campus international student market with the online international student market. This speaks to a broader challenge for universities moving into online education, a lack of appreciation for the differences in audience.
The first and most obvious point to make here is that the on-campus and online international student markets are different. One of the clearest differences is price. While the on-campus international student market is built on marked-up prices for internationally-mobile students, the online market primarily caters to a different audience. Although this is a crude dichotomy, if the on-campus international market is all about marked-up prices, the online international student market largely goes in the opposite direction.
Affordability is far more significant in the online market, and it’s essential to recognise that few countries price their degrees at levels comparable to the UK. Some UK universities operating in this space understand this and adopt different strategies to ensure affordability.
These strategies include geo-pricing, which involves setting different degree prices based on country or region. Discounting and scholarships are also commonly used, some of which can significantly reduce costs. For instance, one UK university currently offers a 20% scholarship on its online degrees for African students, with no application required.
Of course, it would be incorrect to say there are no international students willing and able to pay UK-equivalent fees for online degrees. An obvious example is the international students paying for higher-priced UK university online MBAs. Also, prestigious, top-ranked UK universities with strong global reputations can attract international online students willing to pay UK fees. However, in general, this is a market where there are significant price sensitivities.
Those who are tempted to view the online international student market as a massive opportunity solely based on the large and appealing numbers often presented, really need to consider how pricing affects the total addressable market. When people talk about the huge unmet need for higher education globally, I do not think they mean amongst people able to afford the average or above-average prices of UK university degrees.
This raises a fundamental question for universities: who do you want to serve? Is it a wealthier international audience with the means to pay marked-up prices and relocate to the UK, or a different international audience?
The socioeconomic audience that universities genuinely aim to serve, regardless of what they might say, is shaped by price, entry requirements and attitudes amongst other things. This question is critical when considering the online international student market and, more broadly, moves into online learning. While there may be high demand for online degrees from an international audience, is that demand coming from an audience you are willing or prepared to serve?
Understanding subject demand and scaling challenges in online education
Another important factor in meeting demand is the subject areas where that demand is concentrated. This influences the scope of the opportunity, and, just like in the UK, it is an uneven landscape when it comes to subject demand.
Given the earlier points about price sensitivities, there is a strong correlation between a willingness to price online degrees affordably and being willing and able to operate in subject segments where the level of demand makes that viable.
Universities that calibrate their pricing strategies and target subject areas with high demand have achieved very high enrolment numbers for online degrees. Sounds good, right?
Well, the other challenge that is often overlooked is a university's capacity to manage those large student volumes effectively. There are examples of UK universities that, through partnerships, have scaled international online student numbers into the thousands, only to find themselves unable to administratively manage those numbers or deliver the level of service required at such a scale. In some cases, this has resulted in the termination of partnerships and a significant drop in student numbers.
This ties back to my earlier point: the size of the opportunity is only as large as a university's ability to capitalise on it, which requires the necessary capability and capacity. While growth and high enrolment numbers might seem like a success, the ability to manage that growth effectively and efficiently is critical, otherwise everything falls down.
This also highlights another issue that is not widely known, which are instances in which the company partners of universities attract students to their degrees but either administratively or at the lead conversion stage universities are unable to effectively handle and convert leads.
It seems somewhat perverse to say this in the current climate, but there will be UK universities that are ultimately unable to handle the demand they might have in specific areas and at specific price points.
The role of recruitment strategies and partnerships in online education
The other interesting point of difference between the on-campus and online international student markets relates to recruitment approaches. For on-campus students, international recruitment agents play a central role. UK universities spend millions in commission to these agents, and recent years have seen a significant increase in this investment.
While this model may evolve in the future, the international recruitment agent ecosystem is currently not well-orientated to the online student market. Although exceptions exist, I’ve found little evidence to suggest that the international agent route is anywhere near as effective for online student recruitment as it is for on-campus students.
Ironically, much like universities themselves, this ecosystem is built around internationally mobile students. It is an industry built on the traditional model of university education and aimed at those who want to move abroad to study.
At the moment, there seems to be limited appetite among agents for online student recruitment, largely due to a lack of financial incentives in an industry where money talks.
So if universities are tempted to think that, as with on-campus international recruitment, they can simply turn-on the financial tap to recruitment agents to attract online students, they are likely to be mistaken. While there are some exceptions, the broader trends suggest this approach is not effective for the online market.
This is not to say that UK universities successful in online international student recruitment are operating entirely independently, far from it. A range of partnerships with companies and other educational institutions helps facilitate the recruitment of international students to online degrees. In this respect, there are similarities, as universities are not solely relying on their own marketing and recruitment capabilities to reach an international audience.
Final thoughts on navigating the online international student market
Inevitably, due to factors such as the desire for student growth and the need for increased fee income, UK universities are increasingly exploring international markets. However, there appears to be a limited understanding of the online international student market within the sector. This is perhaps reflective of the relatively small number of UK universities seriously operating in this market. As of 2022-23, approximately 17% of international postgraduate students and 14% of international undergraduate students were studying online.
There is a degree of naivety in some of the discourse around the scale of global demand for higher education that can be met by online education. But at a time of financial pressure, it is far easier for UK universities to believe the hype about the scale of the opportunity and financial relief it might bring, than fully grapple with the realities of what it might actually take and mean to orient themselves to meet such demand.
The risk of overoptimism is not helped by some of the reporting in this area, particularly amongst those whose main experience lies in the traditional international student market. A recent StudyPortals and British Council report is an example of this. The report was presented as mapping online English-taught programmes worldwide, and the headlines it generated were sprinkled with terms like "growth" or "surge" in reference to online degrees.
While there are some interesting data points in this report like this, it is based on tracking increased supply, measured by the number of universities and online degrees listed on a single affiliate platform. It includes introductory commentary on online learning and the pandemic’s role in its growth, that is the kind of generic, one-dimensional commentary you can find all over the web, which undermines its credibility.
There are also question marks about the robustness of the data for particular countries. Some quick research on the StudyPortals platform, showed that filtering by institutions in Germany presents listings for Arden University’s campus and, oddly, the University of Cambridge. Similarly, in Zambia, the only institution listed is Unicaf, a franchise partner for several UK universities.
This raises questions about what the numbers presented in a report like this actually represent and whether they truly indicate investment in online learning by universities in those countries. Unfortunately, the report does not delve into this issue.
For UK universities reading reports like this or buying into the narrative of vast global demand for higher education, there is a significant risk of misplaced optimism about the potential of online degrees and the ease with which this demand can be captured. The reality is far more complex and nuanced.
