Private corporations set to capture tertiary education market

Vanguard July 2011 p. 8
Nick G.

The face of tertiary education in Australia is undergoing a change as multinational private corporations seek to muscle in on the market.

This is all part of the desperate search by finance capital for new areas of capital accumulation.

But despite bankrolling by Federal and State Governments, for-profit tertiary education institutions are by no means guaranteed of success.

The first private university in Australia was opened on May 15, 1989. Bond University was bitterly criticised by academics for its corporate orientation which was in stark contrast to the aloof, “ivory tower” traditions of public universities.
Then in 2005, Carnegie Mellon University (CMU) became the first overseas-owned private university to open in Australia. The US global corporation established its base in Adelaide after Premier Mike Rann promised taxpayer support for the development of Adelaide as a “university city”.

In 2008 it was revealed that “taxpayer support” amounted to $236,000 for every one of the 166 students enrolled at CMU to that point in time, compared to about $15,000 per student spent at Adelaide and Flinders universities and Uni SA.

By 2008, the Federal Government had provided $8 million for CMU and the State Government $31.25 million, the bulk of which was a $19.5 million set-up gift to the institution.

Even with these handouts, the fee structure and the narrow course orientation has meant that CMU has struggled to attract local and overseas students. In May 2010 it was revealed the State Government had spent $250,000 renting space for Carnegie Mellon University's second campus, which had been closed for two years.

At about the same time that CMU began setting up courtesy of the taxpayer, another private overseas university with a narrow curriculum focus announced it was opening in Adelaide. Where CMU’s focus was on business subjects, Cranfield University from Britain specialised in military matters, a complement to another Rann obsession – tying South Australia into the imperialist military machine.

Smaller in scale than CMU hoped to be, more than $1 million of taxpayers' money has been spent on Cranfield University since it was launched in Adelaide by the Duke of Kent in 2007. Cranfield was supposed to offer long and short courses to defence organisations and industry professions in areas including electronic warfare, integrated logistics and explosives but had closed by November 2010 after also failing to attract sufficient numbers of enrolments to be commercially viable.

But still they come. US corporation Kaplan, a Washington Post company, has sought accreditation to open a university in Adelaide offering an MBA. The notoriously predatory company made overtures in 2009, and has already bought into the training industry, sealing a deal earlier this year to purchase private provider Carrick College in Victoria and registered training organisation Franklyn Scholar.

The training sector has become a major attraction to big corporations as Federal and State governments force TAFE colleges to compete for funding and forge ahead with plans to switch government funding from centralised institutions to an individual entitlement – effectively a voucher system.

Kaplan’s chief executive said there was “a huge opportunity to expand…it is very encouraging”.

The New York Times reported allegations last November that Kaplan in the US had “kept students on the books after they dropped out, inflated students’ grades and manipulated placement data to continue receiving financial aid.” It added that Kaplan “and other for-profit education companies have come under intense scrutiny from Congress, amid growing concerns that the industry leaves too many students mired in debt, and with credentials that provide little help in finding jobs”.

The latter description would fit many of the private English-language training colleges here, the experiences of which have been disastrous to many Indian and other overseas students.

Finally, US-based Laureate International Universities has just announced that it is applying to establish The International University of Australia in Adelaide. Laureate is huge with more than 55 accredited campuses and online institutions in 28 countries (including four in China).

Laureate began as a publicly-listed company (under another name) in 1998. In 2007 it was bought out by private equity companies including big players like Kohlberg Kravis Roberts & Co. and Citigroup Private Equity and taken off the stock exchange. It plans to offer four business-related degrees in Adelaide, including a Bachelor of Business (International Hospitality Management) which will have implications for the viability of Regency TAFE’s internationally-renowned Certificate Courses in Hospitality.

None of these developments have gone down well with South Australians. A typical comment posted on the online edition of the Advertiser by TrevorB of Adelaide reads:

“Instead of spending money on overseas imported education business we should be putting money into the schools and universities here in South Australia. More funding cuts have been revealed to our local High Schools in the Riverland and so parents will have to pay out more for their children’s education in public schools, something the Riverland people in general cannot afford. This Rann Government needs to focus on South Australia and look outside of North Terrace and see what damage they are doing to the people of South Australia.”

The same message can be delivered to other State, Territory and Federal politicians – stop paving the roads with gold for the incursion of globalised imperialist corporations intent on profiting from education!

Properly fund our public institutions of education!