End of the Mandate Pushes Schools Away From ACA for International Students
Although Republican efforts over the summer to repeal the ACA (Obamacare) failed, that didn’t mean the landmark legislation was safe from attack. Instead, its been death by a thousand cuts – here’s a few of the efforts by the Trump Administration to undermine the ACA:
- Steep cuts to Navigator groups and to Marketplace outreach efforts, to prevent education of people on the law and subsidies available to them;
- Executive order aimed at providing more ACA-exempt plans;
- Medicare/Medicaid Administrator giving an “unprecedented level of flexibility” to states requesting waivers from ACA rules;
- Halting cost-sharing reduction payments to insurers;
- Prohibiting U.S. Department of Health and Human Services (HHS) employees from participating in Marketplace enrollment events;
- Reducing the enrollment window;
- Active video campaign by HHS to undermine the ACA;
- and finally, in the tax bill just passed, eliminating the individual mandate that requires all US Citizens, Permanent Residents and Resident Aliens to have ACA-level coverage with essential health benefits.
Regardless of where you stand on the ACA, and most Americans wanted to keep and fix it, it was never very relevant to international students. It was geared towards lifetime coverage, not temporary visitors and most were exempt from the mandate anyway. With the end of the mandate, colleges and universities will accelerate the trend we’ve already seen – going away from ACA coverage for international students and embracing plans custom-built for international students.
Open Doors Report Shows New High, Followed by Steep Drop-Off
For 45 years the number of international students in the US has grown every year, with the exception of the small declines seen from 2003 to 2006 in the wake of the 9/11 attacks and resulting visa slowdowns. The Open Doors Report from November 2017 showed a 3.4% jump in total international students in the US, from 1,043,089 to 1,078,822, but it also showed new enrollments down about 7%, or 10,000 students, to 291,000. The question is, when will the decreasing number of new enrollments flatten out the overall growth in students?
Open Doors data is always a year behind, so the latest report reflects enrollments for the 2016/2017 school year – meaning most of those students made their decision to come to the US when the Trump Administration was still more reality TV than politically viable. Many signs are pointing to a bigger drop in enrollment for the 2017/2018 school year. Our prediction – although there will be a bigger drop in new enrollments, it won’t be enough to offset the giant new enrollment years we saw in 2013 to 2016. We’ll see one more all-time high in the November 2018 Open Doors Report, followed by a steep decline in the 2019 report as those giant new enrollment classes drop off.
Continued Turmoil and Adaptation Within The For-Profit Sector
2016 and 2017 were brutal years for the for-profit education sector. We saw the end of ITT Tech and Corinthian Colleges, the demise of the leading accreditation body ( ACICS), strict regulations put into place, hundreds of millions of dollars in lawsuits and fines, and a rapid decline in enrollment numbers and revenue.
Hello, 2018. Things have to get better, right? Things would appear so as we now have a for-profit friendly administration that has worked to undo regulations from the previous administration, and Wall Street is taking kindly to those that remain publicly traded. In fact, Adtalem Global Education (formerly Devry Education Group) stock is just a couple bucks away from a five year high.
However, it’s not a clear path to growth in the for-profit sector – rather we think there will be continued turmoil and adaptation as for-profits and not-for-profits try to figure out their futures. Adtalem announced they are unloading Devry and Keller School of Management to get them out of their portfolio and over to Cogswell Education (if the deal goes through). Their focus will then turn to their nursing and trade schools, more specifically, their medical schools in the Caribbean and growing Adtalem Education in Brazil (which currently boasts over 110k students with further growth in sight). Apollo Education stopped trading on Nasdaq on February 1st last year, giving stockholders $10 a share as they went to a private equity firm for $1.1 billion. However, the most shocking adaptation we’ve seen so far was the announcement that Purdue University was purchasing Kaplan University for $1.00 (plus a management deal), transforming them from a for-profit institution to a public university. This move was essentially a way for Purdue to reach non-traditional online students without having to develop their own online programs, while helping Kaplan with their for-profit woes.
Our prediction is that this trend will continue. We will see more partnerships between for-profits and public universities along with others continuing to move to a non-profit structure. More schools will also explore investing outside of the US due to less regulated and more lucrative markets like Brazil. Heck, we might even see another giant fall.
Canada and Australia Continue to Erode the US International Student Market Share
Canada and Australia have laid the groundwork to take advantage of the projected shrinking international student population in the US. According to the Times Higher Education, in the 2016/2017 academic year Canada has seen an 11% increase in the number of international students (192,000 total) and have a goal of 450,000 international students by 2022. Australia has over 480,000 students enrolled in the spring 2017 semester- a 15% increase over the previous year. On the other hand, the US only saw a 3% growth in the 2016/2017 year according to the Open Doors Report. And as discussed above, US schools saw a 7% decline in new international student enrollments in 2016/2017.
We all know the reasons… A new, not so immigrant friendly administration, gun violence across the country, and the cost of a US education, to name a few (read more in our blog – Canada’s Growing International Student boom). Canada and Australia are also investing in recruiting international students, offering them a friendly, less expensive place to get a high-quality education and perhaps even stay in the country after graduation.
We do not see much along these lines changing in 2018 which is why we are predicting that the US will continue to lose market share to Canada and Australia.
J-1 Visa Programs will Continue to Weather the Storm
While there were no major changes to the J-1 visa program last year, it certainly was a bumpy ride. In the spring of 2017 a draft executive order was leaked to the press that showed the administration’s desire to eliminate or severely restrict J-1 programs that had a work component, including work and travel, au pairs and interns/trainees. What the administration may have underestimated was the industry’s resilience and bipartisan support. With a big push the #savej1 campaign attracted widespread support from both sides of the political spectrum, along with business from all over the US – you can visit the #savej1 website that champions and builds support for the J-1 programs.
As far as we can see there are still many challenges ahead, and smooth sailing is not in the forecast for the J-1 visa program. However, they will weather the storm and continue forward stronger and more resilient than ever.
International US High School Enrollments will Continue to Thrive
International students coming to study at US high schools more than tripled between 2004 and 2016 to 82,000, as reported by IIE in the summer of 2017, and we only expect this trend to continue in 2018. Nearly half of all these students (48%) come from China alone, and high schools are starting to become even more welcoming to international students with 500 more schools opening their doors in the last three years. However, there will be challenges ahead, with increased competition not only in the domestic market but also from countries like Ireland, the UK and the previously mentioned Canada and Australia. Schools will struggle to attract the same amount of growth that has been seen in the past while Australia in particular is growing its market share, with the fastest growth rate over the last 3 years of 34%, compared to the USA’s 12%.
We expect the US to hold firm at the number 1 spot in 2018 and continue to grow its market share, but with stronger growth from other countries, the US may struggle to hold onto the top spot in years to come.
Universities Increase Focus on Smartphone Addiction and its Impact on the Mental Health of Students
In recent years more studies have surfaced from around the globe exploring the impact that technology has on the mental health of college students. For example, a 2017 survey by San Diego State University professor of psychology and author Jean Twenge had findings discussed in an article in The Atlantic that iGen (those born between 1995 and 2012) “teens who spend three hours a day or more on electronic devices are 35 percent more likely to have a risk factor for suicide, such as making a suicide plan.” Between social media, text messaging and internet browsing, smartphones in general get a lot of use on college campuses- and it’s beginning to turn a few heads.
In response to this issue boiling to the surface and the continued increase of smartphone use, we predict that this year many colleges and universities will buckle down and make addressing smartphone addiction a priority. The topic of mental health on campus in general seems ubiquitous these days, as more institutions incorporate mental health into orientation through resources like the International Student Insurance Mental Health Awareness video, and helplines like RAINN’s live chat and phone service. However, in 2018 we will see an added layer in the messaging as schools also raise awareness of phone use and how it could potentially impact the mental health of students.
Touchless Interfaces Make a Big Leap Forward
“Alexa, turn on the kitchen lights.” By now we’ve all gotten used to the idea of asking Siri, Alexa, Google and Cortana for help recalling an obscure fact, sending a text message to a friend or playing our favorite song list. For 2018 and the coming years, the big leap for systems like Siri and Alexa will be understanding the context of a conversation and being able to thread conversations together to provide more insight automatically. What does this mean you can look forward to in the upcoming year? Expect to see these AI (Artificial Intelligence) front-ends start acting like real personal assistants, offering reminders about upcoming events or alerting you to things that you didn’t specifically schedule or configure.
More Schools Start to Use Mobile Messaging Apps
It’s no secret that mobile messaging apps are popular and only continue to grow. When it comes to apps like WeChat, WhatsApp, Facebook Messenger, KakaoTalk, and LINE, billions of people are using them, including prospective international students. WeChat currently accounts for almost 30% of Chinese daily mobile-use time, according to QuestMobile, and while emails average 90 minutes before they’re read, the average text message is read within 90 seconds, according to the wireless association CTIA.
With mobile messaging apps continuing to gain user approval and having the ability to quickly reach students around the world, we predict that more colleges and universities will also give their stamp of approval when it comes to integrating them into their recruitment strategy. Not only do we think institutions will embrace the world of mobile messaging apps to put themselves where students are, but we’re also predicting that WeChat will lead the way as the top mobile messaging app that schools turn to in 2018.
Artificial Intelligence Will Be Huge
For years popular fiction has portrayed AI (Artificial Intelligence) as heartless killing machines. Think Blade Runner, The Matrix, The Terminator and Joshua from War Games. The future may hold a terrifying world of killer robots bent on our destruction, but for now- we’re safe. The current version of AI is happily checking your credit score for automated loan approvals, it’s building your personalized social media feed and helping your insurance company become more accurate in their underwriting. AI implementation will continue to grow at a fast pace and we’re going to see much of the growth in online customer service, autonomous vehicles and deep neural networks that can process medical research data more thoroughly than any human could. Although it might be a few years before popular AI movie scenarios become a reality, in 2018 we will definitely see AI as a major focal point in everyday life.