Higher Ed Relies on Asia

In the US, the GI Bill was passed to help World War II veterans acclimate back into civilian life. One of the key components of this bill was to provide servicemen with access to an affordable college education. This had the effect of greatly increasing the amount of people with a college degree from the 1950s on, ultimately shifting education from a privilege of the rich, to a rite of passage for most Americans. And this access to education had the effect of increasing the middle class, while also shifting the economy from blue collar to white collar jobs.

However, as the economy shifted away from the factory to the office in the 1970s and 80s, blue collar jobs also became less desirable. This required companies to offshore their factories--and had the added benefit of cheaper labor, with less governmental regulation.

By the 1990s, this meant that most fashion related production--textiles and apparel--no longer happened in the U.S. or in Europe; it had shifted primarily to China and India and then further into southeast Asia. This shift in production brought a wave of money to these countries, effectively shifting their economies and facilitating the birth of their own middle classes, as well as the fortunes of many.

In time, the new business owners of China and India and their children and grandchildren became the fastest growing consumer segment in the world. Not only were they buying more things, they were also going to college in higher numbers. For those that could afford it, attending top schools in London, Paris and New York--especially to study fashion--was the primary objective. These schools were seen as the penultimate in design and business education--and offered well-known brand names on resumes.

Because these students were mostly paying full tuition, as they weren’t able to access national tuition schemes or loans, schools like London College of Fashion and the Fashion Institute of Technology took note, and began to market directly to these students and offer them streamlined admissions. Many schools even built satellite schools in China and Korea to further their market penetration in these areas, because this substantial boon in profit from international students coincided with a decrease in domestic birth rates, providing them the perfect antidote to a decrease in incoming student populations.

By the 2000s, it wasn’t unusual for classes at major universities to be made up of 50%, or more, international students. This reality became particularly clear when Covid-19 hit and students were not able to go overseas to study. In the summer of 2020, a little known US law that required students to be on American soil in order to have a student visa, became big news when education was primarily happening on Zoom. Universities like Harvard, Yale and NYU were poised to lose a large and valuable population of students--and so banded together and forced the Trump administration to change course. Across the ocean, BREXIT also created confusion within education, by suddenly shifting European students into international students and reconfiguring admissions.

Fast forward one year later, and many higher education institutions have focused on bringing students back in-person, on campus. While this decision is a complex one--especially with the Delta variant still running rampant--it was in large part meant to re-engage international students. Without their tuition, schools know they would be put in dire financial straits. And without them, they lose out on key profit centers such as dormitories, cafeterias and other services. In fact, domestic students are far more likely to take classes online compared to their international counterparts, as they are likely to have jobs while going to school.

However, the Covid pandemic has also created more transparency when it comes to the education industry and its reliance on international students. China just announced some of its most hard-line rules in decades on how international universities can engage students in China, limiting access to online education, tutoring and content in general. While politics are very much part of these changes, Chinese universities have in many ways have “caught up” to their European and American counterparts--offering a wide array of fashion programs at top level institutions. And there is a push for students to stay home to study.

In short, universities are being forced to rethink who their student body will be in the near and long term future--and may no longer be able to rely on Asian students to sustain or fund their growth. For many institutions, this may require reconnecting with local students and marketplaces, and perhaps even down-sizing their overall operations.

In our next episode, we will focus on the proliferation of fashion-related graduate programs, why there are so many and what the ramifications are.