The Curious Case of Overseas Campuses

One of the more mysterious developments in higher education of late is the rise—and, often, fall—of international branch campuses (IBCs). Many universities have created them, but a high percentage have been closed after only a few years. Why the interest and why the closures?

Generally speaking, IBCs are degree-granting institutions located in one country but governed by a primary institution located in a different country. They have garnered many headlines (in Inside Higher Ed, the Chronicle of Higher Education, and the New York Times, among others), probably because many prominent colleges, such as Yale, Duke, and Cornell, are founding them, while sometimes facing resistance from faculty, which adds to their news value.

Most IBCs are better thought of as outposts of a university rather than universities unto themselves. Located in places like the United Arab Emirates, Singapore, or China, they usually offer only graduate degrees in one or two in-demand fields like business or engineering. Duke University’s campus in Kunshan, China, set to open in the fall of 2014, will offer two degrees in business management.

To give an idea of how small most of these operations are, there are ten university branch campuses in Education City in Qatar, but only 243 students graduated from those campuses in the 2010-11 academic year.

In a January 2012 report the Observatory on Borderless Higher Education, a research group, identified approximately 200 international branch campuses currently existing, with an additional 37 scheduled to open in the next two years. About half of the home universities are in the United States, and they vary in size and stature—among them are City University of Seattle and Texas A&M. The definition of IBCs is somewhat vague. Yale’s new partnership with the National University of Singapore is considered an IBC, even though it gives National University of Singapore degrees, rather than Yale degrees.

So why are they being started?

Many colleges with overseas operations tout trendy concepts such as “globalization” and “interdependence” of the future economy as reasons to start IBCs. For instance, Duke University’s Strategic Plan says:

No longer can we prepare our students as if they are likely to pursue careers based in the United States, without much international contact or experience, and with little contact with colleagues from other nations and cultures.

Duke, at least, seems to be reaching out internationally with a kind of affirmative action, to provide more diverse interaction not just among different races but also among different nationalities.

Another apparent reason behind Duke’s starting an IBC is that everyone else is, too. The Duke-Kunshan Planning Guide implies peer pressure with terms such as “our peer institutions are already ahead of Duke” and this is  “an opportunity to. . . catch up”:

There are significant opportunity costs to Duke not being in China. As the Education Advisory Board report, “Operations of American Institutions in China”, indicates, many of our peer institutions are already ahead of Duke in establishing operations in China. We believe that our model, both by establishing a joint-venture with Kunshan and Wuhan University and more broadly by envisioning ourselves as a globally-networked university, offers an opportunity to both catch up and become a leader as a 21st century global university.

Duke also wants to enhance its international reputation. According to Duke’s Strategic Plan, Duke-Kunshan will supposedly enhance its research and teaching:

Duke’s international reputation does not yet match its reputation in the United States nor reflect the quality of its teaching and research programs. If we are to meet our ambitious goals in research, teaching and service, this gap must be aggressively closed . . . .  Duke will work to attract the best faculty from around the world, both to enhance our teaching and research missions. . . .

Thus, it seems that the IBC phenomenon may be another aspect of the “reputational arms race” that economist Robert Martin identified as a key reason for the constant increase in college spending in a Pope Center paper.

A less-talked about reason that universities start IBCs is financial gain. Some schools hope to make a profit through tuition. Others, while perhaps not expecting to earn a profit, plan on subsidies from host countries.

Few universities ever disclose how much money they take in from the foreign governments, but in many cases the subsidy appears to be substantial—Duke was told that it would not have to pay the construction cost of its Kunshan campus, because the city of Kunshan would pay for it. According to Nora Bynum, Director for Global Strategy at Duke, the city of Kunshan has already spent more than $100 million on construction costs, will continue to pay for ongoing construction, and will even contribute to the campus’s operating costs.

In spite of high hopes and anticipated revenues, many international campuses have been shut down for financial and other reasons. For example, in the 1980s, 20 American schools started IBCs in Japan, and only two of them—Temple University Japan and Lakeland College Japan, a two-year school—remain. Even further back, Harvard opened a medical school in China in 1911 and a business school in Switzerland in 1973. Both have been closed, and Harvard hasn’t participated in the recent expansion.

The recent boom has had its share of casualties, as well. Troy University has shuttered its IBCs in Guam, Sri Lanka, and Germany; George Mason closed a campus in the United Arab Emirates in 2009; Suffolk University closed an IBC in Senegal; Carnegie Mellon shut down a campus in Greece; and Texas Tech closed a campus in Quendlinburg, Germany. Michigan State University tried to start an undergraduate campus in Dubai, but shut it down and is now focusing only on graduate programs.

Many IBCs fail because they don’t attract enough students who are willing to pay. Michigan State’s undergraduate Dubai campus was a case in point. Officials had planned for 100 to 150 students per entering class, but, as MSU president Lou Anna Simon told Inside Higher Ed, only 10 to 20 students enrolled in each of MSU Dubai’s five programs.

Similarly, Duke’s Kunshan campus hasn’t started yet, but has already been scaled back after market research indicated that interest would be lower than first predicted.

Another difficulty is faculty resistance. Nearly all IBCs have faced objections from professors at the main campus. At Duke, one of the most vocal critics has been English professor Thomas Pfau, who criticized the school’s “Kunshan adventure” for taking resources away from Duke’s core academic functions, such as the English department.

Other objections include lack of academic freedom protections in the destination country, as well as a lack of free speech rights or even gay rights. Some Yale professors objected to starting a campus in Singapore because Singapore officially bans homosexuality. On top of that, few professors want to leave their home campus for an international branch, so, in order to get some to move, schools must pay higher salaries.

In short, it appears that college administrators are prone to overestimating the benefits and underestimating the costs of IBCs. On the other hand, at this point IBCs are being built faster than they’re being taken down. Whether the IBC trend continues depends on the broader picture of how higher education develops in the future. If traditional universities begin to face a crisis, as some have predicted, IBCs may be among the first things cut.