For years, universities have been looking for creative ways to drum up cash as their costs increase. The most straightforward way to increase revenue is to bring in more students. And for Plymouth State University, that meant heading south to the Caribbean in a rare partnership deal that some see as controversial.
(Infographic: By The Numbers: PSU's Partnership With American University of Antigua)
The Caribbean Connection
In their final days of the semester, undergrads at Plymouth State University’s College of Business Administration are changing classes. The smaller contingent of MBA students won’t show up until night courses start. Of course, that number is shrinking as more grad students take courses online. But about half of Plymouth State’s MBA students will never set foot on campus for a different reason.
They’re living in Antigua, in the Caribbean.
And that’s a good thing, says Director of Graduate Business Programs Jen Pinckney.
“The more students that are coming in from various backgrounds just provides a more interesting classroom situation," she says. "And it also provides an opportunity for students who may not have had those experiences to learn more and to engage in different discussions.”
This setup has come about thanks to a recruitment partnership between Plymouth State and American University of Antigua, which ran from 2009 until last year. AUA is one of dozens of for-profit medical schools in the Caribbean. Students are often Americans who didn’t make the cut for US med schools. Some of these Caribbean universities are accredited--like AUA--but most still operate outside American jurisdiction.
“Candidly, partnering with an entity offshore ought to raise red flags,” says Barmak Nassirian of the American Association of State Colleges and Universities in Washington, D.C. And while he won’t say partnering with a Caribbean medical school is always inappropriate, he says colleges should be skeptical.
“What we know of offshore medical institutions is not particularly promising. They tend to have much higher costs, much higher dropout rates than US counterparts,” he says.
But, Nassirian admits that it will take years to know whether AUA students will default. It all hinges on the years after graduation, when they are established in the workforce.
A Win-Win Arrangement
Here's how it works: medical students in Antigua enroll in Plymouth State’s online MBA program. And that suddenly qualifies most of them for federal student loans. The vast majority of Caribbean medical schools, including American University of Antigua, don’t qualify for what’s called “Title IV." That's the law encompassing all federal student aid.
The way around that?
Partner with an eligible American school—like Plymouth State.
That way students can qualify for up to $20,500 in federal direct unsubsidized student loans each year. By taking one online business course at Plymouth State each term, AUA students can use the federal money to pay for their MBA, and often have cash left over for living expenses on the island. They just can’t use it for tuition at American University of Antigua. But Nassirian says it comes with risks for Plymouth State.
“It’s not like you can simply package students with loans. They may have a hard time paying it. They may default. And if enough students default on your tab, you—the institution here in the US whose loan eligibility was the basis of that borrowing—can actually be sanctioned," Nassirian says. "And those sanctions go all the way up to total loss of access to federal financial aid. That’s the kiss of death to every US institution that participates.”
So why would a university with a 40-year old MBA program want to take that kind of risk? We asked PSU Provost and Vice President for Academic Affairs Julier Bernier.
Q: "In your discussions, were there any concerns about the higher level of student loan default at Caribbean medical schools compared to their American counterparts?"
A: "At the time, I don’t think that was on anybody’s radar screen, and anybody even gave it any thought or knew of that.”
Since 2009, 75 AUA students have earned MBAs from Plymouth State.
PSU’s Chief Public Relations Officer Timothy Kershner says the partnership began with one of Plymouth State’s alums, who was recruiting for AUA. At the time, Plymouth State had already established specialized MBA program in Healthcare Administration.
“The AUA thought that would be a wonderful fit for their medical school, for their physicians to complement their medical training with some business courses as well to learn about the business side of medicine,” Kershner says.
The relationship that developed is what both universities could reasonably call “win-win.” A rising trend at American med schools is offering a dual MD/MBA program, which they believe helps future doctors negotiate the complicated web of healthcare insurance, regulations, and government programs. By offering a dual degree program, American University of Antigua students might have a bit of an edge in a tough market. In exchange for acting as recruiters for its MBA program, Plymouth State agreed to pay AUA $75 for each med student who enrolled.
And Jen Pinckney, the Director of Graduate Business Programs, says the arrangement paid off for PSU.
“It certainly enhanced our already-existing Healthcare Administration program. It allowed us to offer more sections. Where we sometimes had a waiting list, now all of a sudden, we had two or possibly even three sections we could move people into,” she says. And she says that admissions spike has meant hiring more faculty.
What PSU administrators wouldn’t discuss directly, however, was the benefit of additional tuition money. In the first year of the partnership, PSU saw good results, with 129 American University of Antigua students enrolling. Every year after that, AUA students have made up roughly half the MBA program. Last academic year enrollment peaked with 264 Antigua-based students. And each year, all but a handful qualified for federal student loans. PSU charged AUA students standard out-of-state tuition rates, or in-state, if they could document residency. And as with all its other grad students, the more advanced the course, the higher the per credit tuition.
Given the complex cost structure, and the fact that any MBA students can—and often do—take a term off from the PSU program, it’s tough to nail down how much money the American University of Antigua partnership has brought into Plymouth State each year. But looking at the 2013-2014 enrollment numbers, and assuming each student took one lower-level three-credit course each term, $1.4 million in tuition each year is a low-end ballpark figure.
End Of An Agreement
But Plymouth State Provost Julie Bernier says that despite the benefits, the program ended after the 2013 academic year.
“We had a two-year agreement. After two years, we signed another two-year agreement. And at that point, we were in negotiations to extend it, and we couldn’t come to an agreement," she says. "AUA wanted to go in a direction that we didn’t want to go."
Specifically, Bernier says that means, "Financially. They wanted, they wanted more money from us to assist in recruiting.”
She says it was a "typical recruitment agreement," and notes that universities regularly use outside companies to recruit students into their programs.
AUA is now working with Urbana University in Ohio. We reached out by phone, email, and social media to American University of Antigua. We also contacted its parent company Manipal Global, based in Bangalore, India, for comment.
We received no response.
A Student Experience
Today, about half of the student body in Plymouth State’s MBA program is still comprised of medical students in Antigua. Most of those who were enrolled during the partnership stuck with it. And PSU reports that thanks to word-of-mouth, new students are also enrolling.
But that doesn't mean everyone at American University of Antigua has had a good experience.
Take 24-year old Jordan Kitchen from Salt Lake City, Utah. “I didn’t want to get that invested in a program like, money and time-wise, where there’s like, a little of the outcome was uncertain,” he says.
Kitchen spent a year at the dual program in Antigua. He says he ran into a lot of administrative issues with the medical school, which factored into his decision. But he stuck with the Plymouth State MBA program, earning his degree. He says he got a great business education. But still, “I probably wouldn’t recommend the combined program, just because I didn’t necessarily have the best experience, anyway, which is part of the reason why I left," Kitchen says.
His story squares with reports of high drop-out rates at Caribbean medical schools. But Plymouth State administrators point out that in terms of Grade Point Average and drop-out rate, its AUA students are virtually identical to their peers in New Hampshire and elsewhere. Provost Julie Bernier says overall, it was an “effective partnership.”
“Bringing in highly-motivated, bright students always adds to your programs. And you always want to attract good, strong students to your programs,” she says.
A Growing Trend?
More schools around the country are trying out this model for themselves. In an article late last year, Bloomberg Business Week reported “at least nine” Caribbean medical schools have partnerships with American colleges.
But it’s still not common in New England. We reached out to a number of people involved in higher education regionally. No one would speak about the PSU-AUA partnership or the general concept on the record.
They all said they hadn't heard of any other such program in the area.
Oversight...Or Lack Thereof
The idea of a publicly-funded college working with a for-profit offshore medical school on recruitment is looks unusual enough on its face to beg the question: who had oversight?
Nobody outside Plymouth State, according to Provost Julie Bernier.
"There's nothing unusual about it. It is simply offering our program to a group of students...They [AUA] advertise our program. They marketed our program and helped us identify qualified students," she says. "Otherwise, it's our program that we've already been offering. So it didn't require any special permission."
The Higher Ed Commission doesn't have jurisdiction over state colleges and universities, Dartmouth College, or community colleges--although it would likely review such a partnership plan proposed at a private institution.
As for the University System, Bernier says the question wasn't brought before the trustees, since it was an internal recruitment and marketing matter. We placed calls to confirm this with the board itself, and didn't receive a response prior to posting.
Public Education Goes Corporate
Although she wasn't with PSU when the partnership agreement began, Graduate Business Programs Director Jen Pinckney agrees that the arrangement with AUA isn't something unusual enough to merit outside review.
"In the corporate world, too, it's not essentially all that different from an affiliate program you would have," she says.
Barmak Nassirian of the American Association of State Colleges and Universities says that line of thinking is gaining traction, particularly in MBA programs.
"This is the trend of privatization and corporatization of American higher ed that's been evolving now for a couple of decades. And you know, some of it is perfectly justifiable and explained to people in the form of sound business practices," he says. "So there is a real sense in which the university of some decades ago, which was generally managed by people who were academics, is increasingly evolving into some kind of modern, corporate management model that happens to engage in academic activity."
But Nassirian also says public colleges and universities are facing enormous pressure to be entrepreneurial as state legislatures cut funds and tacitly encourage creative fundraising and recruitment.
Regional Higher Ed Under Pressure
New Hampshire College and University Council President Tom Horgan says that pressure is compounded in New England for another reason.
"We're seeing a major demographic shift in New Hampshire and throughout New England," he says. "There's going to be, probably, an 18 percent decline in the higher ed population between now and 2020. We have 15,000 fewer students in the K-12 pipeline than we did 10 years ago."
Horgan cites the potential mass layoffs at the University of Maine System, the closing of six major programs at Franklin Pierce University in Rindge, and the sale of several buildings at Boston's Suffolk University as examples of how institutions are being forced to adapt to this shift.
Although he says he can't speak to the Plymouth State program specifically, he says that sort of arrangement could fit into that context. "Colleges throughout New England are confronting these demographic shifts and trying to respond to them. Obviously, through cost-cutting, but also looking to reach out further to wider geographic areas, to recruit students from farther away."
Plymouth State administrators also note the AUA partnership went into effect long before the state legislature slashed University System funding. Essentially, they say, this opportunity fell into the university's lap. Although they say they aren't pursuing any more partnerships like the one with AUA, administrators stress that they have a variety of relationships with universities overseas.
And even knowing what they know now about student debt and Caribbean medical schools--they’d do it again.
“You know, we’re proud of what we did," says Chief Public Relations Officer Timothy Kershner. "And I think we performed a great service, a great and valuable service to those students at the American University of Antigua.”