Ontario colleges need international tuition. It could cost them

LONGREAD: Unprepared students. Corrupt agents. International recruitment has a shady reputation — but can our colleges survive without international fees?
By Ira Basen - Published on Sep 24, 2019
(Illustration by Glenn Harvey)

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On the Friday morning before Labour Day, 1,400 first-year students file into the gymnasium at Humber College’s sprawling north Toronto campus. They’re greeted at the door by hyper-enthusiastic volunteers who applaud and offer high fives as they enter. They quickly fill the white plastic stacking chairs lined up on the floor and then spread into the bleachers in the back.

It’s the start of a week of orientation events for Humber’s newest crop of international students. Representatives from the student council and the Student Wellness and Accessibility Centre address the crowd. So, too, does the pumped-up head of the Office of Student Conduct, who warns her audience to make sure they get proper consent before having “sexy time.”

Then, the college’s dean of international students, Drew Ness, takes the microphone and welcomes the attendees to the “Humber family,” calling them a “special group of people.” He proclaims, “We know you have the skills to be successful” and thanks them for choosing both Canada and Humber to pursue their educational dreams.

These students, many of whom have been in Canada for only a few days, are suitably impressed. “This is awesome,” declares Kamaljeet Singh, who is about to start a three-year program in electrical engineering. He likes the fact that people from India are respected in Canada. He already has a sister and some friends attending Humber, and, though his English-language skills still need improvement, he has no doubt that he will be able to complete his courses successfully.

The people in this gymnasium represent the largest incoming class of international students in the school’s history. They will join about 4,600 others already at Humber; together, they represent more than 20 per cent of total enrolment.

Those students are badly needed. Over the past decade, revenue generated by international tuition has been critical to the financial viability of Humber and of Ontario’s 23 other colleges.

In many ways, the internationalization of the province’s colleges has been a major success story. But there have been costs associated with that success. There are questions about the murky and often corrupt world of international recruitment. There are concerns that institutions are accepting underqualified applicants just to make ends meet. And there is uncertainty as to whether colleges could even survive without international students — and the money they bring in.

Humber College
International students represent more than 20 per cent of total enrolment at Humber College, in Toronto. (Cole Burston/CP)

The scene unfolding in Humber’s gymnasium would have been unthinkable back on May 21, 1965, when then-education minister Bill Davis introduced Bill 153 to the Ontario legislature. It called for the creation of a network of community colleges to provide an affordable alternative to university.

They would grant diplomas, not degrees, and provide the province’s booming economy with a vitally needed source of skilled labour for manufacturing, business, and service industries.

It was an extraordinarily ambitious project. Twenty colleges would be established in 18 different regions of the province. They were expected to recruit students from their regional catchment areas and to offer programs designed to serve their community’s specific employment needs. Students in the southwest would be trained to work in the auto industry. In the north, they would help meet the needs of mining companies.

At first, there was little, if any, focus on international recruitment. But that began to change after the election of Mike Harris’s Progressive Conservative government in 1995. By then, the local industries that students were being trained for had begun to drift offshore. The province believed that the new global economy required new skills and new approaches. Catchment areas were abolished. Colleges were encouraged to think globally, not locally — to establish partnerships with other institutions around the world and even to open up satellite campuses abroad.

They were also told that they should compete for students in a deregulated, global educational marketplace. And they were given a powerful financial incentive to do so.

Colleges had always charged international students more than domestic students, but domestic and international tuition rates were both regulated by the province, and the money generated by international students was placed in a provincial pool rather than being retained by the institution.

But, in 1996, the Harris government deregulated international tuition and let schools keep all the money it generated. Suddenly, colleges had a new and potentially very lucrative source of revenue.

They would need it. When Ontario’s system was born, government grants provided the majority of operating revenue. Tuition accounted for 10 to 15 per cent. But that balance began to shift in the late ’90s — and it’s still shifting.

According to a 2017 PricewaterhouseCoopers report on the fiscal sustainability of Ontario colleges, government grants had shrunk to 52 per cent of total revenue by 2009 and to 43 per cent by 2015; it projected that it would drop to 36 per cent by the end of 2025. Meanwhile, the share of total revenues coming from tuition increased from 23 per cent in 2009 to 35 per cent in 2015 and was projected to rise to 40 per cent by 2025.

When Ontario colleges started looking for international students, they had no trouble finding them. By 2000, there were about 2 million worldwide studying outside their home countries. More than half of them were from China, India, and South Korea, where rising middle classes were causing the demand for post-secondary education to far outstrip the supply. Canada was well positioned to attract them. It offered affordable, high-quality universities and colleges, and the country was widely seen as a safe place with a high tolerance for non-white newcomers.

It was also easy to get here. Over the past 15 years, successive Canadian governments have relaxed entry rules for international students. Today, Canada has Student Direct Stream agreements with seven countries. If you’re a high-school graduate from one of those countries, can demonstrate that you have $15,000 to pay your first year of tuition, have purchased a $10,000 guaranteed investment certificate from a participating bank, and have met the minimum standard on an IELTS exam — the internationally recognized test for English-language proficiency — your admission to the Ontario college of your choice is virtually assured.

And, in 2008, the federal government introduced new rules to encourage more international students to remain after graduation: they were allowed to work for up to three years on a post-grad work permit, after which they had a clear path to permanent residency.

Applications to study in Canada skyrocketed. By 2017, the country had moved up to fourth place on the list of favoured destinations for international students, behind China, the U.K., and the U.S. In 2018, according to the Canadian Bureau for International Education, there were more than half a million people from 186 countries pursuing studies in Canada at all levels, an increase of 17 per cent over the previous year and up a staggering 154 per cent since 2010.

Last year, CBIE conducted a survey of international students studying in Canada: Two-thirds said they were planning to stay in the country following graduation. Three-quarters said that the opportunity to do that was essential or very important in their decision to study in Canada. Sixty per cent intended to eventually apply for permanent residency, up from 51 per cent in 2015.

“Immigration policies drive all international-student numbers,” explains Arslan Mahmood, the director of international-student services at Seneca College, who has seen his school’s international enrolment triple in the seven years he’s worked at the office.

Overall, such enrolment at Ontario colleges increased 258 per cent between 2008-09 and 2014-15, according to the PwC report. By 2014-15, more than half of those students were concentrated in the Greater Toronto Area’s five big schools — Centennial, George Brown, Humber, Seneca, and Sheridan — making up 20 per cent or more of total enrolment. Even small and northern colleges had seen increases, from less than 1 per cent in 2005-06 to nearly 10 per cent in 2014-15.

That increase could not have come at a better time for the province’s colleges: they’re caught in a financial squeeze that, according to PwC, could leave them with operating deficits of $420 million a year and a cumulative debt of $1.9 billion by 2025. “In the absence of creative actions on the part of colleges and policy makers to address the future fiscal sustainability of the Ontario college sector,” the report warned, “the core mandate of colleges appears to be in jeopardy.”

But those “creative actions” will not be easy to identify or execute, and, at the moment, almost all roads lead back to an ever-growing reliance on revenue generated by international students. 

Increasing domestic enrolment could be an option, but the possibilities for large revenue gains on that front are limited. In 2013, the Liberal government capped tuition increases at 3 per cent a year, not nearly enough to keep pace with escalating costs. And last spring, Doug Ford’s Tory government went even further, announcing a tuition cut of 10 per cent with no commensurate increase in grants. That decision will cost Ontario colleges an estimated $80 million a year, according to Linda Franklin, president and CEO of the advocacy organization Colleges Ontario.

Then there’s a demographic problem, one that has no short-term solution: 80 per cent of colleges’ domestic enrolment is made up of people aged 18 to 24, but the number of potential students in that group began to drop in 2013-14. It’s expected to rebound over the next decade; until then, however, domestic enrolment will flat-line and, in the case of some northern institutions, slip into the negative.

That may be one big reason why those 1,400 in Humber’s gymnasium received such an effusive welcome: there’s no quicker or cheaper way for Ontario colleges to increase revenue than to enrol more international students. They pay roughly $15,000 a year for diploma programs, which means those first-years will be contributing 21 million badly needed dollars to Humber’s bottom line.

How badly are we talking? Have colleges reached the point at which international-student revenue is what’s keeping the lights on and the doors open?

No, Franklin insists: she says that revenue is going toward fixing infrastructure rather than toward operating expenses. And there’s a lot to fix. The PwC report projects that deferred maintenance at Ontario colleges will increase from $1.2 billion in 2015-16 to $3.5 billion by 2024-25. 

“The huge benefit for domestic and international students is that international-student revenues are helping us slowly but surely catch up with that deficit,” Franklin says. “If we ever ended up in a situation where most of our operating dollars were coming from international fees, that could be a problem.”

But there’s evidence that, at some colleges, that’s already the reality.

Take the case of St. Clair College, which has campuses in Windsor and Chatham. This year, for the first time, international-student tuition will represent the school’s largest single source of revenue. St. Clair will get $24.5 million from domestic tuition, $54.5 million from government grants, and $71.8 million from international tuition.

Both the grants and the domestic tuition are lower than they were in the previous year, but international-student revenue went up after St. Clair increased international enrolment by an additional 711 students: today, 4,700 of its 12,000 students come from abroad. “They help with the sustainability of the college,” vice-president and CFO Marc Jones told the Windsor Star in April.

Labour costs (salaries, wages, benefits, pensions) typically make up about 65 per cent of colleges’ total operating expenses — and because these institutions are not allowed to run deficits, even small increases in those costs can cause problems. As such, international-student revenues have gone from “nice to have” to “must have.”

So how do Ontario colleges go about finding that revenue? That’s where international recruitment comes in. The business is large, lucrative, and, according to a 2016 advisory statement prepared for UNESCO and the Council for Higher Education Accreditation, rife with fraud, corruption, misrepresentation, and misconduct — to the point that corruption is “undermining the quality and credibility of higher education around the world.”

St. Clare College
This year, for the first time, international-student tuition will represent the largest single source of revenue for St. Clair College, in southwestern Ontario. (The Gervs/Creative Commons CCBY-SA2.0)

The Organisation for Economic Co-operation and Development predicts that, by 2025, there will be 8 million people worldwide studying outside their home countries. But the number of countries looking to attract these students is growing, too, and that list now includes two formidable competitors: China and India.

Both countries are rapidly building up their post-secondary infrastructure to keep more of their own students at home. They also hope to attract people from such places as the Philippines and Vietnam, two markets that many institutions, including Ontario colleges, are aggressively courting.

Not all students are created equal, though, and the competition for good ones is intense. The danger is that institutions can become so hungry for international-student revenue that they will do just about anything to get it, including condoning — or at least ignoring — shady recruiting practices and accepting applicants who lack basic English-language proficiency and other academic qualifications.

And that is precisely what happened in New South Wales.

By 2015, international students represented about 20 per cent of total enrolment at the Australian state’s universities, and their tuition accounted for about 17 per cent of total operating revenues.

But, after a series of media reports revealed that too many of those students lacked basic language skills and that faculty were being pressured to pass them, the state’s Independent Commission Against Corruption was asked to investigate.

Its report, released in 2015, was a damning indictment of common practices. It concluded that “the growth in supply of university places globally is outstripping the growth in the number of students with suitable academic capabilities and adequate English-language proficiency” and that pressures within the university to fill seats with international students were “conducive to corruption.”

The report took special aim at the recruitment agents whom institutions contract on a commission basis to deliver students from their local areas. It found cases of agents falsifying documents, helping applicants cheat on English-language proficiency tests, and bribing officials to obtain visas.

It also criticized school administrators for looking the other way as these abuses unfolded, noting that they were focusing too much on revenue and not enough on the possible damage to their institutions’ credibility and quality.

Could that happen here?

Like Australian universities, Ontario colleges are vigorously competing for students in an international marketplace. And, like them, they rely on overseas agents to do most of the recruiting.

About 70 per cent of international students studying at GTA colleges came here through the help of third-party agents working under contract, says Oleg Legusov, a PhD candidate at the Ontario Institute for Studies in Education. It’s not unusual for one agent to represent several schools in the province.

Of the estimated 23,000 agencies operating worldwide, some are large international-recruiting companies that send thousands of students to Canada every year. Others are mom-and-pop shops in small towns and remote villages. It’s a massive industry with a less than stellar reputation.

For every student the agent delivers, the college pays a commission, usually around 15 per cent, or about $2,000 each. Many agents also charge the student a fee — ranging from a few hundred dollars to a few thousand — for their services before they leave for school. Many colleges and even some agents oppose the controversial practice, often referred to as “double dipping,” but it continues.

An agent who can place a few hundred students a year at $3,000 to $4,000 each can make a very good living, but, with that kind of money on the line, it’s not hard to see how fraud and corruption can occur.

Mel Broitman knows the world of international recruitment well: 22 years ago, he and a buddy from his Toronto high school founded an agency called Higher Edge. Since then, they’ve placed about 10,000 students in Canadian colleges and universities.

Broitman, who has lived and worked in Thailand for much of the past decade, explains during an interview in Toronto, “There’s an expression in that part of the world: they’ll say, ‘We’ll do the needful,’” meaning agents will do what needs to be done to place students. That can include ghostwriting an applicant’s personal essay, altering a high-school transcript, or finding someone else to write an applicant’s IELTS exam.

When Drew Ness first started working in international recruitment seven years ago, he says that he wasn’t sure what to make of the roughly 200 agents Humber uses around the world — but, over the years, he’s grown more comfortable with how the system works.

“This is a globally mature, multibillion-dollar, sophisticated industry. And we seem to be subject to the folklore and anecdotes about the awful operators,” he says. “In my experience, that’s a very, very small number, and, really, to mitigate risk for us, we have quality-assurance processes to accept them: we routinely eliminate agents because of performance issues or because of non-performance or because of fraud.”

Colleges may be well intentioned when it comes to their commitment to use only agents who play by the rules, but enforcement is difficult from afar — particularly in newer markets in Africa, southeast Asia, and South America, where codes of conduct are still evolving.

“Part of what makes agents so attractive for institutions is that they’re operating in a distant market where the school may not have the staff with the cultural expertise to be effective,” says Robert Coffey, co-author of a 2014 report, commissioned by the Council of Ministers of Education, Canada, on the use of agents. “But that same distance also makes supervision or oversight difficult,” says Coffey. “So you see institutions that are really committed to only hire agents that will represent the institution honestly, but the same thing that makes them so attractive makes it quite difficult to ensure that that’s happening.”

In 2016, Manitoba became the first Canadian province to try to impose some order on the murky world of international recruitment, passing the International Education Act, which spells out the obligations and responsibilities that both schools and agents have toward those they’re attempting to recruit.

Such legislation is clearly a step in the right direction, but there are larger questions about whether agents actually operate in the best interests of prospective students. In theory, agents are supposed to help them navigate the application process and to recommend institutions that would best suit their abilities and interests.

But that’s not always the way it works out.

“Agents are not insiders. Their loyalty is not to the Canadian education system,” explains Legusov. “Their loyalty is to themselves. They have to maximize their own profits. So they will not always act in the best interests of the student.”

The problem lies with the contracts that agents sign with various institutions. They get paid only if the student enrols in one of those schools. Broitman says that this frequently results in people being placed at institutions or in programs that are not necessarily the best fit for them.

“A good student goes to an agent in one of those cities,” he says. “They’re an 85 per cent high-school student and want to do mechanical engineering. The agent won’t try to sell them on Ryerson, or U of T, or McMaster. They’ll try to convince them to go to Humber, and we see lots of those people go there for that reason. To take high-ranking students and have them go into programs that are underneath their ability, I think that’s bordering on criminal.”

Legusov agrees that many of the international students at Ontario colleges are actually university material, but he thinks that agents shouldn’t be blamed for recommending that they apply to a college instead of a university.

“Remember, most of the students are thinking about immigration,” he explains. “So the agent will say to their family, ‘Take this program. It’s easy — she will get a job, get permanent residency, and then she’ll go to university.’ Their priority is immigration, so they will choose the program which will provide the easiest way to get permanent residency.”

Niagara College
Niagara College, with locations in Welland and Niagara-on-the-Lake, has been expanding its enrolment of international students in recent years. (Google)

The rapid increase in the number of international students has also created significant challenges in the classroom: although these students are required to pass the IELTS exam as a condition of acceptance, questions remain about their ability to read, write, and speak at a level suitable for academic study.

Ontario colleges generally require an IELTS score of six out of nine for admission to most diploma programs. The company that developed the IELTS test considers a person with a six score to be a “competent user” with “a generally effective command of the language despite some inaccuracies, inappropriacies and misunderstandings.”

The company advises educational institutions using their tests that students with a score of six are “probably acceptable” for linguistically demanding training courses, but not for academic courses.

Poor English-language proficiency among international students has long been a source of frustration among instructors at Ontario colleges, but the topic is rarely discussed openly.

That changed in fall 2018, when instructors at Niagara College, which has campuses in Welland and Niagara-on-the-Lake, began demanding that the administration do something to address the large numbers of incoming Indian students who could not read, write, or converse in English. They were considered academically “at risk,” even though all had achieved a six or better on their IELTS tests.

The college responded by asking them to take an in-house language test, and the results confirmed that 200 of them were failing because of poor language skills. The school then ordered tests for more than 400 students still in India who were scheduled to begin classes in January 2019. More than a third were found to require additional support.

It’s not clear how those students managed to get in to Niagara College. Most of them had taken their IELTS test at the same sites in the northern Indian state of Punjab, so the possibility of widespread fraud can’t be ruled out, either at the test centres or among the recruiting agents.

But Mel Broitman believes there’s nothing new about what happened. “This stuff has been going on for years,” he insists. “People have been coming into programs with poor English. They just got caught with it.”

In January 2019, Steve Hudson, vice-president of academic and learner services for Niagara College, told the Toronto Star, “We will use these results to continue to review our English language admission criteria and to enhance the language supports for students.”

To that end, Michael Wales, Niagara’s manager of corporate communications, says that, “for fall, the admission standards for many of our programs have been adjusted to increase the level of English competency required for entry.” He also notes that the college has introduced “several online and in-person tools and programs to prepare incoming students for a transition to Canada and what the language expectations would be in their programs.”

Niagara has been aggressively expanding its enrolment of international students over the past few years. It now has more than 4,000 out of a total full-time population of more than 11,000. Broitman thinks the rapid expansion is at the root of the problem at Niagara and throughout the Ontario college system.

“It’s a numbers game,” he explains. “They all want numbers, and the reality is that there’s no way to grow those numbers from those sources without having more mediocrity and less quality. You just can’t do it. The college sector is building its numbers by lowering its standards and turning its eye away from the questions as to who is coming and what qualities they have.”

Broitman worries that what he calls a “race to the bottom” will ultimately devalue the quality of an Ontario college diploma for domestic and international students, as well as in the eyes of prospective employers.

So far, there’s no indication that that’s happening. The province keeps close track of its colleges through the Ontario College Quality Assurance Service, which tracks performance using a number of metrics, including how satisfied students are with their programs and how satisfied employers are with the quality of graduates.

Those numbers are high, and Franklin believes they will stay that way. She rejects the idea that poorly qualified international students will threaten the quality of Ontario’s colleges. “I think we’re getting the cream of the crop in Canada,” she says.

And they’ll need to maintain international interest — because in just the two years since the PwC report looked at how colleges could avoid falling into a $420 million operating deficit and a cumulative debt of $1.9 billion by 2025, the road to sustainability has gotten bumpier.

The 2017 report said domestic tuition would have to increase by 6.2 per cent a year, 2,000 full- and part-time academic staff would need to be cut, government grants would have to increase 2.1 per cent, and international enrolment would need to rise by 7.1 per cent.

But domestic tuition is not rising; it’s declining by 10 per cent this year. Cutting 2,000 faculty jobs would have a devastating impact in the classroom and would not sit well with the same unions that staged a five-week strike in 2017. The current provincial government has shown no interest in increasing per-student grants. 

And, although a 7.1 per cent rise in international enrolment is well below the rate of increase of the past several years, any bump in domestic enrolment would make that target difficult to achieve.

Ontario’s colleges have been a remarkable success story for more than 50 years, but the fiscal demands on them are increasing at the same time as the cash flow that has sustained them over the past decade is running dry.

And there is no clear alternative in sight.

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