Enrolment growth in France¡¯s private sector is?running at?more than 10?times the pace of?its public counterpart, but increasingly industrial models must maintain a?breakneck pace to?avoid annihilation, an?expert has warned.
Data from France¡¯s Ministry of ³ÉÈËVRÊÓƵ and Research show a? in?private enrolments for the 2021-22 academic year, compared with just 0.3?per cent for the public sector. The influx has been mirrored by?capital, with Galileo Global Education, a?Paris-based group of?private campuses, (?2?billion) in?2020.
Times are good, then. But the private equity that is funding expansion is not patient, nor will it be possible to raise tuition fees to service the debt behind their acquisitions, according to S¨¦bastien Vivier-Lirimont, a managing partner of HEADway Advisory, a?consultancy specialising in the sector.
Students may appreciate the agility and employability focus of programmes in areas such as user experience design, but tuition fees of about €20,000 a?year can be off-putting, particularly when public universities in France and elsewhere in the European Union charge as little as?€400.
¡°Fees have gone up and up over the past years ¨C specifically in the business schools segment, it¡¯s more than 5?per cent a?year over the past 10 years ¨C and a lot of people are questioning the possibility to go higher and higher,¡± said Dr Vivier-Lirimont, who has also worked as a dean of French business schools.
¡°The economy of those leveraged buyouts may be endangered by the fact that we are at the end of a cycle of increasing fees, except for specific institutions with a clearly distinctive value proposition,¡± he said, referring to world-leading management schools such as HEC Paris, which can compete with top global institutions.
With fees suppressed by public competition, mid-tier private schools must keep expanding their student numbers to be able to service their debts, Dr Vivier-Lirimont said, adding that more than a fifth of schools were currently failing to fill their places.
¡°Within the business schools segment, the dynamics are about to change a?lot because the best-ranked, the best brands, are absorbing the market,¡± he said. ¡°It won¡¯t be next year, but in the next five to 10 years I?think the number of intermediate schools will decrease, and we will face either bankruptcies or schools that are bought by others.¡±
Dr Vivier-Lirimont gave Lille¡¯s Skema Business School as an example of a private provider that had done well by focusing on international students, opening campuses in Brazil, China and the US after being formed from the merger of two middling schools in 2009. ¡°It¡¯s a good example of how the private sector is able to reinvent some of the content, the way schools and studies are organised, providing value to both students and corporations,¡± he said.
Student demands for digitisation and state-of-the-art campuses mean that higher education now requires major upfront investment, despite offering more gradual returns for private equity. Respite from the requirement for relentless growth could come from so-called family offices, Dr Vivier-Lirimont said, referring to the privately held companies that handle investments on behalf of wealthy dynasties, and which tend to be more patient investors than private equity.
