Free-market mentality means boom time for private colleges

In the era of free fees, paying for your third-level education may seem a strange choice to make. Yet thousands of students do so every year and the sector reports strong growth. Louise Holdenlooks at how Ireland's private education market managed the boom

When the annual CAO auction comes around, about one-third of all students are told they haven't got a place on the course they applied for. Many more hadn't even bother listing their dream course in the first place because they had known they would never get the points they needed to study law, medicine, journalism or other sought-after professions.

Cue the lambasting of the university entrance system and calls for reform of the Leaving Cert. The year rolls on and nothing changes.

Or does it? Beyond the university and institute of technology (IoT) sector, things are moving on. Many students are applying a free-market mentality to education and going elsewhere to pay for what they want.

Regarded by the uninformed as a stomping ground for wealthy underperformers, the private education market is growing exponentially and attracting students from all walks of life with focused career objectives, according to insiders. Currently there are about 25,000 students availing of programmes in the independent college sector in institutions such as the Dublin Business School (DBS) and Griffith College Dublin (GCD).

Sensing a growing interest in bespoke third level, other players are entering the Irish market, such as Ormonde Business School in Tullamore, Co Offaly and the newest, Independent Colleges. Owned by Independent News and Media Group, Independent Colleges has aspirations to gain an international profile.

Meanwhile, the eye of the global market is trained on Ireland. In 2003, Dublin Business School (then newly amalgamated with the other Dublin business college, LSB) was acquired by Kaplan Inc, the education division of the Washington Post Company. With a headquarters in New York, Kaplan provides higher education and professional development across the world and is valued at $1.7 billion (€1.2 billion).

The stakes are high, but is there really potential for more growth in this highly competitive sector? This year the number of students sitting the Leaving Cert fell again, and the universities and institutes of technology are casting around for bodies to fill places on many courses.

Diarmaid Hegarty, chief executive of Griffith College Dublin (GCD), rejects the suggestion that the third-level market is finite. It's not a case of picking up the leavings from the universities any more, he says.

"This notion that independent colleges are for the rich and thick is totally outdated," says Hegarty, who argues that the CAO approach to third-level provision is out of kilter with 21st-century practices.

"People are choosing the independent education sector because they know what course they want to study and they don't want to be dictated to by the universities. The public higher education system operates like something out of communist Russia."

He scorns the idea of an auction system using points as currency, which, he insists, give no indication of a person's aptitude anyway. He says many students are rejecting that system in favour of private education. There are almost 8,000 students taking programmes with GCD, and 3,500 of those are studying for the undergraduate degree courses that used to be the preserve of the universities.

As Hegarty would have it, private colleges are not the fruit of commercial opportunism, but a sincere attempt by educators to offer a democratic opportunity to all learners.

But how democratic can the sector be when private college students need an average of €6,000 per annum at their disposal?

Philip Burke, chief operating officer of the new Independent Colleges, says it may be a false economy to take a course in the free public education system when it's not the course you actually want. By his reckoning, students are coming around to the idea that it is better to borrow and invest in a course that will pay dividends in the long run.

"The students who come to private education today have other choices," says Burke, who was head of the professional law school at GCD for nine years. "They could go to a university and do arts for free, or they could pay for a course that exactly matches what they want.

"I had a student who came to me with 305 points but really wanted to study law. He would never have been able to do that in the public system with those points. He could have accepted the business course he was offered at Tralee IT, but he decided to pay for a law degree. He wasn't from a moneyed background, but he and his family decided it was worth the investment. He got an honours law degree and now he's working as a barrister."

Burke is confident that the growth of the independent education market will make the system fairer for all students. He claims that the establishment of Independent Colleges is motivated by the "educational vision" of Sir Anthony O'Reilly rather than economic opportunism. Indeed, most operators in the independent education sector will tell you that it's no place to make a quick killing.

"For the first time, the problem of underfunding that has plagued the sector is being addressed," says Burke, referring to the recent acquisition of DBS by Kaplan and the backing of Independent Colleges by Independent News and Media. The inference is that the sector struggles to turn a profit on Irish student fees alone.

"It's taken us 25 years to build up our courses and our reputation," says Gerry Muldowney, chief executive of DBS. Over that time the college has gained accreditation for 110 programmes and attracted 9,000 students, but it's taken the backing of a giant like Kaplan to really put it on the map. "With programmes in 600 locations and one million students, Kaplan puts a huge infrastructural resource at our disposal," says Muldowney.

The globalisation of education is one factor feeding into the growth of the independent sector here. Now that the Higher Education and Training Awards Council (Hetac) oversees accreditation for all third-level institutions, public or private, overseas students don't tend to place higher value on a Hetac qualification gained in a public university than on one gained in a private college. As far as fees go, international students have to pay wherever they study in Ireland, so they make their choices based on courses offered, class sizes and other considerations.

Muldowney says that some Irish students are starting to think the same way. "There used to be negativity towards the idea of a 'private' education industry, but there has been a shift in the mindset in the last 15 years. An internationalised accreditation system has shifted the balance."

The upward trajectory of the independent college sector has attracted new players such as Independent Colleges into the market. For now they offer nothing more than a preparation course for the Law Society exams but, according to Burke, within three years Independent Colleges expects to fill a 30,000-square foot campus in the old Hibernian Insurance Building on Dublin's Dawson Street. The organisers have so much confidence in the product that lecturers are being offered the chance to buy in and profit from the college's success.

"You only have to look at the growth in this market to see the potential," Burke says. "When I started in Griffith we had 50 students in the law school. By the time I left we had 3,500. The entry of Kaplan into the Irish market should tell you all you need to know about the opportunities in private education in Ireland."

BROGEN HAYES

NICOLA BYRNE

Nicola Byrne was offered the course she wanted in DIT on the third round, but by then she had already begun a degree programme in marketing in DBS.

"It threw me into a bit of a spin," says Byrne. "Of course I left DBS and went for the programme I had chosen on the CAO, but before too long I realised that I was actually more comfortable in DBS. I was warned that I might fail my Christmas exams in DIT because I had missed a couple of weeks and that was a bit off-putting. Then I walked into a lecture theatre with 200 people in it and I just wanted to go back to DBS."

She returned to her marketing degree programme and doesn't regret it.

"I worked part- time to pay my fees for the first two years, and then my parents kindly helped me the year of my finals. I got a really good degree - I worked very hard. There's no point in paying all that money and not studying, now is there?"