2017 Predictions and Outcomes

It’s the most wonderful time of the year: time to revisit our 2017 predictions. Each year we come up with list of predictions related to the world of international education. Now that the year is almost over, let’s take another look at our predictions and see how we did!

1 ACA Is Here To Stay (in substance, at least)

Our Prediction from January:

With the relentless drumbeat from President-Elect Trump to repeal the Affordable Care Act throughout our election season, and the newly-formed Republican-controlled Congress already putting in place a plan to repeal the ACA, it could seem a foregone conclusion that the ACA will be swiftly repealed as promised. But with 20 million Americans newly covered by insurance, it will be incredibly difficult to pull that coverage back, and Trump and Congress have not indicated any desire to do so. In addition, Trump has commented that he likes the “popular” pieces of the ACA – allowing dependents to stay on their parents plan to age 26, and covering pre-existing conditions. The problem is, once you offer blanket pre-existing condition coverage to everyone, the unpopular piece of the ACA – the individual mandate that requires everyone have coverage – becomes necessary from an insurance underwriting perspective. Insurance can’t work if people can just choose to buy coverage once they become sick or injured, you need to share that risk with healthy people as well.

There will be a loud “repeal” effort, and a quieter and much slower “replace” effort, and the ACA will go away in name. But the pain of actually taking coverage from people and the difficulty and cost of keeping pre-existing condition coverage without the individual mandate means that the healthcare landscape in the USA has changed forever. Some pieces will change as the new leadership tries to make it look different – but a whole lot of it will still look the same, a year from now.

1 Evaluation of Prediction:

When we reviewed this prediction in September, after the failure of multiple efforts over the summer to repeal the Affordable Care Act (also called the ACA or Obamacare), we smugly assumed we’d have a green check on this one. But wait! Even though all direct efforts to repeal the ACA have failed, as we discussed in our September update, the Republican tax reform proposal takes a major shot at the ACA. The Senate version of the tax bill includes a provision repealing the mandate that all US Citizens, Permanent Residents and Resident Aliens buy ACA insurance, with predictions that this change would reduce ACA enrollment by 13 million. Although the vast majority of international students are Non-Resident Aliens and therefore exempt from the ACA anyway, repealing the individual mandate means that even long-term international students and scholars (generally, those in the US for over 5 ½ years) would have no requirement to have ACA insurance either. We’ll have to see what the final bill includes, but at this point, the signals are that the individual mandate may very well disappear – a major change that will drive up premiums for those remaining on ACA plans, as young and healthy people skip insurance leaving older and sicker people on the plans.

1For-Profit School’s Revenue and Enrollment Will Continue to Decline

Our Prediction from January:

Things are looking up for the embattled for-profit education sector. According to Senator John McCain: “Undoing the Obama Administration’s eight-year war on for profit colleges through onerous rule making and regulatory actions should be a priority for the next Administration and Congress.” So it is no coincidence that stock prices for the two largest for-profits, Apollo Education (up 14%) and Devry (up 33%) have gone up since November 8th. However, it will take a bit more before the sector starts to see the new administration’s policies having a positive effect on enrollments and revenue, and 2017 will not bring the major rebound investors are apparently anticipating. What factors will hold it back?

    • Ongoing investigations and lawsuits – Laureate Education is under investigation for deceptive advertising practices in their home state of Minnesota, and they’re subject to a class action lawsuit filed in Ohio against them. Devry just settled a $100 million suit filed by the FTC. It is not clear if others will file suits or if other investigations will begin in 2017.
    • Dismantling of the Accrediting Council for Independent Colleges and Schools – The leading accrediting agency for the for-profit sector was recently dismantled and lost an appeal in December. Schools now have 18 months to find a new accreditation. In the meantime, they must let all their students know about the loss of the accreditation. Most will find new accreditation, but some will not and will not survive. And telling students that their school has lost its accrediting body can’t help enrollment.
    • Eliminating Mandatory Arbitration – In July 2017 the new arbitration rules go into effect, essentially removing the mandatory arbitration rules used by many for-profit schools. This will make it easier for students to sue their school if they feel mislead. Provided the new administration can’t or doesn’t undo this change, it could open the door for more suits against the sector.
    • Reputation – The for-profit sector has taken a reputational blow because of the attention from the closings if ITT Tech and Corinthian as well as the smaller for-profits that have closed their doors due to the enhanced regulations. It will take some time for the industry to repair its reputation and for the industry to cleanse itself.

1 Evaluation of Prediction:

Our prediction was spot on. 2017 brought more closures to small for-profit schools that could not handle the loss of accreditation by the dismantling of the Accrediting Council for Independent Colleges and Schools. Big players were not exempt either. We saw groups like Apollo, which owns University of Phoenix and recently moved to a non-profit model, announce it was closing 20 University of Phoenix locations. And despite DeVry stock prices increasing in the beginning of the year, Adtalem (owner of Devry) announced last week it was offloading Devry and the Keller School of Management to a small non-profit school with less than 1,000 students (off the record, we predict that won’t come to fruition). Devry’s enrollment is down 21.4% with revenue across Adtalem down a total of 6.4% in the first fiscal quarter of 2018 (ending September 30, 2017).

1No Drastic Changes in Store for the J1 Visa Program

Our Prediction from January:

Rhetoric during the Presidential campaign certainly did not show much support for J1 programs, and in some cases even targeted them. While there is discontent and uneasiness from many corners of the cultural exchange world stemming from this attitude of the new Administration in the US, in the short to medium term there will be very little impact to the programs and how they are run. First, to make any widescale changes to the J1 visa programs would take time – potentially up to 1 or 2 years, maybe even 3, to push any changes through. Second, the appointment of Rex Tillerson as Secretary of State could bode well for how the programs will be viewed moving forward. While he was CEO of ExxonMobil, the company was an active supporter of international exchanges and is even a State Department designated sponsor, so he likely knows the value these programs bring. While this gives us some insight, we will know more as he makes appointments to key staff positions.

1 Evaluation of Prediction:

Depending on how you look at this, you can either say this prediction was wildly off the mark, or you could say it was very accurate. 2017 did not see any major changes to the J1 program, but it has been a very turbulent year behind the scenes. President Trump’s Buy America, Hire America (BAHA) executive order has engulfed the J1 Cultural Exchange programs, and there has been widespread talk that this initiative could see the elimination or reduction of some of the leading J1 programs such as Au Pair, Work and Travel, Trainee and Interns. The industry has rallied around, and while the initial threat seems to have subsided, it looks like it will continue to be a rocky road during the Trump Presidency for the J1 Programs. But still, our prediction was narrowly focused on 2017, so we will take the win.

1Canada Benefits at the Expense of the US

Our Prediction from January:

For economic and political reasons, Canada will continue to grow its international student population rapidly, while growth in the US will stagnate, as students from China, India and other countries choose Canada over the US.

    • The latest Open Doors Report reflects the drying up of scholarship and state sponsorship, as the percentage of students in the US funding their own education jumped from 63% to 67%.
    • The strengthening dollar has made it much more expensive to study in the US than it was one, two or five years ago. Although Canada’s currency has also strengthened against some currencies, it has not been to the same level as in the US, making it more affordable.
    • The uncertain political climate and xenophobic messaging from President-Elect Trump will start to deter students from studying in the US, and more students will consider other destinations, with Canada looking as a natural alternative and comparatively much more welcoming.
    • The overwhelming top sending countries to the US are also the primary sending countries to Canada, and with a more welcoming atmosphere cheaper currency, and a cohesive national strategy to grow enrollment, Canada will see large gains this year in their international enrollments, including many students that also considered (and rejected) the US.
    • Canada has been relaxing it’s work and citizenship restrictions for international students, now making it a more favorable choice when comparing it to the US. Not only can international students work off-campus immediately without a work permit, but new legislation has been introduced that would make it easier for international students to gain citizenship upon completing their degrees. With the option to work and possibility of gaining citizenship upon completing their degree, Canada is going to be a no-brainer for many international students who are looking beyond their degrees.
    • Finally, US students are applying to Canadian schools in droves, which will help drive up Canada’s numbers. For instance, according to recent news reports, the University of Calgary has received 130 percent more US applicants than last year, and University of Toronto 70 percent more.

1 Evaluation of Prediction:

We nailed this one, though we’re a little fuzzy on the numbers. Last month, Universities in Canada reported a 10.7% increase in the number of international students studying in Canada, bringing the total to 192,000. And IRCC, Canada’s immigration arm, reported a 22% increase in the number of international students entering Canada, leading to an 18% increase in the total number of international students in Canada (to 415,000). Regardless of how you sort out the numbers, Canada has enjoyed a huge spike in applications, as we detailed in our blog post in August, and now in actual students. Meanwhile, the US has seen a 3% drop in the number of new international students – nothing to be alarmist about, but certainly the end of the automatic yearly increase.

1Facebook Live Will Gain Popularity Among Educational Institutions and Businesses

Our Prediction from January:

We all know that video marketing is huge. However, we also know there’s a lot of work around creating a video and making sure it gets out into the world for people to see. Facebook Live allows you to incorporate videos into your marketing plan without having to allot time for editing (take or leave this as a positive) and allows them to be seen by an audience immediately. Additionally, Facebook Live lets you see how many viewers are watching, along with the names of the viewers and their comments. With all of the recent advertisement around Facebook Live it’s easy to see that there’s a large plan in place for this new media and it’s hard to ignore. Do we think all the extra marketing dollars behind Facebook Live will pay off? Yes.

1 Evaluation of Prediction:

This one was half right. Over the past year Facebook Live has grown by more than 4x, according to Facebook, and although certain educational businesses and select colleges and universities have jumped on the Facebook Live bandwagon, the international education world still hasn’t fully embraced it. While Facebook Live was a valuable platform to connect with students from around the world in certain instances this past year, for example during International Education Week, the booming utilization of Facebook Live that we expected to see across the board at educational institutions was not quite there. There is no doubt that videos are still a necessity in any marketing plan and that Facebook Live will stick around for awhile, but in 2017 it just wasn’t in the cards.

1ESL Programs Increase Marketing and Recruiting Dramatically

Our Prediction from January:

2016 was not kind to the English as a second language market in the US. In a fall 2016 flash survey conducted by EnglishUSA, approximately 75% of those surveyed saw a decrease in fall enrollments, 8% remained flat and 15% saw an increase. This is up significantly from 2015 when 45% saw a decrease.

In another survey on the use of agents, 74% of those that responded use agents to help them recruit. The majority of those reported less than 10% of students were the result of using agents.

With the significant decline in enrollments and much uncertainty in the industry, those that want to reverse the trend will rely more heavily on non-traditional and traditional recruiting methods like agents, online marketing as well as recruiting fairs. To survive and grow, ESL programs will have to work hard to reach new students. Making the case: two of the respondents in the EnglishUSA survey whose Fall enrollments had grown were asked how they had grown their business; the first credited the increase to “improved web site and new agents” and the second to “aggressive promotions & marketing campaigns.”

1 Evaluation of Prediction:

We missed this one. We know that the ESL world has continued to see declines in enrollment in 2017, but our prediction on ESL programs increasing their marketing and recruiting dramatically wasn’t quite right. Instead, we saw more cuts in the industry and some programs even shutting their doors all together.

As we mentioned in our blog in November, EnglishUSA released survey results showing that 70% of member institutions saw a decrease in enrollment from fall 2016 to fall 2017. Of those schools showing declines, 85% had a sizable decrease (between 11-50%). Only 29% of those surveyed stayed flat or grew.

The 29% that saw an increase credited their success to having lower cost options, forming strategic partnerships with bridge/pathway programs or simply not relying on students from Saudi Arabia. There was no mention of an increased focus on marketing and recruiting, and without any other strong evidence we admit defeat on this one.

1Despite Efforts, Fake News Will Still be Widespread on Facebook

Our Prediction from January:

Coming across spam and clickbait articles disguised as news on Facebook has become a normal occurrence for users. However, since sixty-six percent of Facebook users get news on site, this normality has recently become a pressing issue. In November, Mark Zuckerberg made a statement that Facebook takes this issue seriously and they’ve been working to resolve it. However, he also stated that “We’ve made significant progress, but there is more work to be done.” This statement along with the complexity involved in screening content lead us to believe that although strides will be made in 2017, clickbait, spam and scams on Facebook are not yet a thing of the past.

1 Evaluation of Prediction:

If you’ve been on Facebook throughout the year or have searched “Fake News on Facebook in 2017” you should already know the answer to this one. Despite a massive, ongoing effort on Facebook’s part to eradicate fake news it’s still an issue that keeps popping up in news feeds around the world. Although Facebook has stated they do not want to be the “arbiter of truth,” a few of the steps taken to stop the spread of fake news this past year include increasing the number of fact checkers, blocking ads from pages that repeatedly share fake news, and implementing a “related articles” feature. However, despite these efforts to rid Facebook of fake news this year it has continued to crawl its way through the social platform. Hopefully in 2018 we will continue to see these efforts ramped up and a halt to the fake news epidemic.

1Study Abroad Growth Continues to Slow, More Students Studying In Latin America and Asia

Our Prediction from January:

Study abroad grew only 2.9% last year, and we think that growth will be even slower this year and that the destination makeup will change. With terrorist attacks in Europe and the Middle East, Brexit in the UK, Western Europe elections shifting away from open borders, and a strong dollar, we think that there will be a shift where more students will consider Asia and Latin America as prime destinations, and we’ll see declines in students choosing Europe.

With a third of all US study abroad students studying in the UK, France and Spain, a large dip in travel to Europe will certainly impact the growth overall. And the question is, will this deter students to study abroad, or will they choose a different destination? In our estimation, we think that while this will deter some families, a strong dollar might help to counteract this and continue to entice others – but to new corners of the world that they may never have considered before.

1 Evaluation of Prediction:

There’s no real way to take this prediction as a winner, and we’ve tried. The overall number of US students studying abroad rose 3.8% to 325,339, increasing at a faster rate than last year when it notched in at 2.9%. In fact, other than the 5.2% growth we saw from the 2012/13 to 2013/14 academic years, this year’s increase was the biggest in the last six years.

The overall number of students studying in Asia and Latin America did grow, but only by 1.3% and 2.1%, respectively. We didn’t predict the huge increase in Sub-Saharan Africa and a big decrease from the Middle East and North Africa, and we didn’t call out a big increase in Cuba, driving Caribbean numbers way up, or the big increase in students going to Australia/New Zealand.

And to top it off, we missed the 36% spike in the number of students studying in Antarctica – from 64 to 87!

1The Rise of Software Containers

Our Prediction from January:

Containerization software has been around for some time, but 2017 will be the year it becomes a standard tool in a software developer’s toolbox. With containerization, the idea is to virtualize and distribute applications, running multiple isolated systems know as containers, on a single host – making it much easier to develop, maintain and scale software applications.

In the world of containerization software, Docker has become a household name. Docker is an open source project that uses containers to wrap a piece of software in a completely isolated environment. This guarantees that the software will always run the same and you can dynamically change your application, regardless of its host environment. Build, ship, run.

1 Evaluation of Prediction:

Containers were huge this year and they don’t appear to be slowing down at all. 2017 saw widespread adoption of containers by Google, Amazon, Microsoft IBM and many other large infrastructure companies. Containers, clusters and swarms are here to stay and are going to be a major force in the coming years. They offer scalability and flexibility that traditional bare-metal or VM servers can’t touch and as the ecosystem of tools and utilities grow, the adoption rate will only accelerate.

 

1Internet of Things (IoT) Will Become Mainstream

Our Prediction from January:

2017 will mark the real start of the Internet of Things (IoT) revolution. From something as simple as turning your living room lights on and off to controlling the traffic patterns of an entire city, the age of connected devices is here. Chances are in 2017 that you’ll be using a thermostat, a security camera or some other IoT device that you control with a phone or tablet. Gartner puts the current number of IoT devices at around 6 billion, but predicts that by 2020, we could have up to 20 billion devices connected to the internet in one way or another.

1 Evaluation of Prediction:

This is on the mark. IoT is now everywhere: your connected refrigerator will remind you when the milk is about to spoil, Alexa, Siri, Google Assistant and other digital tools control your lights, appliances and home entertainment systems, your car can be outfitted with its own wifi and will even email you when the oil needs to be changed- and this is just the beginning. Combining the IoT with emerging Artificial Intelligence (AI) will be the catalyst for massive growth in smart, connected things.

 

 

 

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