Mark A. Ashwill, Capstone Vietnam / GlobalVietDiaspora, 19 June 2011
As Vietnam, once war-ravaged and closed to the world, takes its place upon the world stage, people are flocking here in the name of adventure, charity, curiosity, development, penance, profit, reconciliation, religion, and scholarship. Some are coming back, others going home and still others are virgin travelers discovering a country they may know only as a war or a place frozen in time.
It is not only businesspeople, tourists, war veterans, students, researchers and NGO workers who have (re)discovered this beautiful and inspirational country. Educators and educational entrepreneurs who represent a range of institutions and companies that encompass the “good, the bad and the ugly” are also coming in droves. For many, Vietnam has become a land of opportunity for recruiting students, offering degree programs, and establishing academic partnerships, among many other activities.
The Free Market with Socialist Orientation
In recent years, Vietnam has boasted one of the highest economic growth rates in the world. It was at the Sixth Party Congress in 1986 that Vietnam’s leadership made the fateful decision to “bend rather than break” by changing course from a centrally planned to a “market economy with socialist orientation.” The reforms of the late 1980s began to bear fruit in the 1990s and kicked into overdrive in the last decade. To its credit, Vietnam has made great strides in poverty reduction and has a per capita income that recently reached the lower middle-income threshold (about $1,150 in 2010), according to the World Bank’s definition.
Vietnam is one of the great success stories of the developing world, on track to become a regional powerhouse with a population of 90 million (the world’s 13th largest), a literacy rate that exceeds 90 percent, a life expectancy of 74, and a median age of 27.8, compared with 36.9 in the United States. While over half of the workforce is involved in agricultural production, nearly 80 percent of the nation’s GDP comes from the manufacturing and service sectors. Last year, Vietnam attracted US$18.6 billion worth of foreign direct investment (FDI).
In my bustling neighborhood in Cau Giay District of Hanoi, I can see several hundred million dollars of local investment and FDI from my window, where new condos, office buildings, and hotels sprout up like mushrooms. A field that just a few years ago was a destination for grazing cows during the day and chirping frogs at night, and which was countryside a decade ago, is now the site of one of Vietnam’s most famous talented and gifted high schools (i.e., Hanoi-Amsterdam), the Grand Plaza Hotel, Charm Vit Tower, and Mandarin Garden luxury condominiums, among other large scale residential construction projects. A couple of kilometers down the road, heading out of the city, new neighborhoods are being created as if out of thin air. This is the Vietnam of 2011.
Education: The Catalyst for Continued Development
As in other countries at Vietnam’s stage of development, however, the education system has not kept pace with the economy and is unable to meet the exponentially growing demand for skilled labor. The state of education at all levels is one of the most widely discussed and hotly debated topics in the media, as well as in the corridors of power.
The obsessive interest in education is the result of: the premium that Vietnam as a Confucian culture places on education; the urgent need for highly trained and educated workers; and the youth of the population. About half of all Vietnamese are under the age of 25; this is what’s commonly referred to as the “demographic dividend” that the country hopes (and needs) to capitalize on in the coming decades.
The main obstacles to quality are limited capacity, dismally low faculty and administrator salaries, a teacher-centered methodology, overly theoretical instruction, outdated curricula and materials, a shortage of qualified lectures and professors, a lack of university-industry cooperation, and substandard libraries and other facilities. Some of these problems can be solved by changes in policy and a shift in priorities, while others require increased funding. Not surprisingly, the most common employer complaints about quality of graduates center on a lack of communication and critical thinking skills, foreign language proficiency, creativity, practical experience, and leadership skills.
One viable option for those of means and others who are seeking a quality of education not currently offered by Vietnamese universities, and who, by dint of hard work and intelligence, are able to obtain scholarships, is overseas study. The official estimate is that there are 60,000 young Vietnamese studying abroad. The actual figure is much higher. To put things in perspective, total postsecondary enrollment is 1.9 million (about 16% of the relevant age cohort), so that even if there were 100,000, that would amount to only 5% of all Vietnamese enrolled in higher education. A very select group indeed.
Vietnam’s record economic growth has contributed to rapidly rising levels of (mainly urban) income and wealth among those with the necessary education and/or networks. Just a year ago, it was estimated that Vietnam had $40 billion in cash, including $10 billion in foreign currency reserves, $20 billion held by banks, and $10 billion in the hands (and safes) of individuals. How is the last $10 billion being spent? To purchase big ticket items such as cars, real estate, gold, and overseas study, to mention just a few.
In addition to a substandard higher education system and a growing ability to pay, other factors that explain the popularity of overseas study and foreign degree programs offered in-country are: greater access to information; the prestige and marketability of a foreign degree; and a situation in which demand outstrips supply.
The US Competitive Advantage
When I first traveled to Vietnam in 1996, one year after the normalization of diplomatic relations between the two countries, there were fewer than 1,000 Vietnamese studying in the United States. According to the latest SEVIS By the Numbers quarterly snapshot, there are nearly 18,000 Vietnamese students at all levels, including high school. This makes the United States the world’s second leading host of Vietnamese students – after Australia, which has 22,000 Vietnamese students, plus another 10,000 enrolled in Australian programs in Vietnam (e.g., 6,000 at RMIT in HCMC and Hanoi). Amazingly, Vietnam ranks 8th among all “places of origin.” Other popular destinations include China, Malaysia, Singapore, and the UK.
In just a few short years, Vietnam has catapulted from obscurity to the country du jour in the internationalization plans of a growing number of US institutions of higher education. US higher education fairs in Vietnam attract large numbers of students and parents eager for information about study in the USA and Vietnamese universities are on the prowl for quality US academic partners.
An Internet survey conducted a couple of years ago by the Institute of International Education-Vietnam revealed what most of us who are familiar with Vietnam know—that the United States is the first-choice destination for overseas study.
To be sure, while the worldwide student visa (F-1) issuance rate was 87% (rounded up) in the US government 2010 fiscal year, it was 56.34% in Vietnam with 8,681 student visas issued. By contrast, Australia issued 10,335 student visas to Vietnamese with an issuance rate of 78.6%. (The UK’s rate was 84%.)
Importantly, this means that an estimated 15,408 young Vietnamese, the vast majority of whom could presumably afford to study in the US, applied for a student visa from October 1, 2009 to September 30, 2010. Of these, 6727 (over 40%) were rejected. Where did they go, assuming they didn’t reapply? To “second choice” countries like Australia, Singapore, the UK, etc. and in-country foreign degree programs (e.g., RMIT).
The Next Frontier
Because of the steep cost of higher education in the United States, the problematic student visa issuance rate, rising urban incomes, and the inability of many people to leave jobs and families behind to study abroad, degree programs offered in-country or online are attractive options for many students. Furthermore, because Vietnamese are brand conscious, US institutions naturally have a competitive advantage in the higher education market. The list of US in-country degree programs and US schools that have sat up and taken notice of Vietnam is long and growing.
For example, San Diego State University (SDSU), a nationally-ranked US institution that is very serious about Vietnam, recently sent a high-level delegation to Hanoi and Ho Chi Minh City (HCMC) seeking pre-screened partners who share their interests.
In addition to regionally accredited institutions of higher education, there are a number of nationally accredited schools, mostly private for-profits, which are active in Vietnam. Columbia Southern University (CSU), a DETC- accredited for-profit university based in Orange, Alabama, USA, is probably the most profitable US institution of higher education in Vietnam. With 2000 MBA graduates, CSU has earned an estimated $18 million in tuition and fees. According to an official source, CSU currently has 405 active students from Vietnam. That number is expected to increase in July by 100-200 students. This translates into nearly $5 million in tuition revenue. Unfortunately, the qualitative difference between national and regional accreditation, like day and night, is “lost in translation.”
There’s Gold in Them Thar Hills!—Enter the Bad and the Ugly
Among the growing number of US universities and colleges that have acknowledged Vietnam as a promising market for student recruitment, online and in-country education, and training programs (among other activities), most are well-intentioned and accredited. Others, however, see a golden opportunity to reap substantial profits from a market that has rosy long-term prospects. These less than stellar institutions, the black sheep of the US higher education family, are attracted to Vietnam like flies to honey, lured by the prospect of an “easy sell” and “easy money.” The bittersweet fact is that the United States exports some of the world’s best and worst higher education.
Degree programs offered by unaccredited schools, or diploma mills, defined as: “An institution of higher education operating without supervision of a state or professional agency and granting diplomas that are either fraudulent or, because of the lack of proper standards, worthless,” are less expensive than other programs, feature lenient admission criteria, a relatively light workload, and require less time to complete.
Last year, I posted a list of unaccredited US-based or affiliated schools on my blog, An International Educator in Vietnam, which attracted quite a bit of attention in the Vietnamese and English language media in Vietnam. Most of the schools on my list, 25 and counting, are mainly interested in making money and lots of it. And they find plenty of local partners willing to cooperate and people willing to hand over thousands of dollars in order to obtain a US “degree.” As an Australian colleague who is an expert in this area commented: “Credentialism, greed, and a touch of corruption. Put them all in the mixer and, voila! The perfect market for degree mills!”
There is a tentatively happy ending to this story. Last August, an official from the Ministry of Education and Training stated in an interview that unauthorized joint training programs are illegal and that the Ministry will not recognize the diplomas of programs offered in cooperation with unaccredited foreign partners.
Higher Education as a Public Good
Like any country, the United States has its strengths and successes—models, approaches, ways of thinking–that could be adapted and emulated in a country like Vietnam. The US also has its shortcomings, red flags, and cautionary tales. One of the latter is the experience with for-profit higher education, which now enrolls 10% of all US college students and has recently been the object of unflattering media attention.
The Condition of Education 2011, released by the National Center for Educational Statistics in the US Department of Education, is revealing in this respect but not particularly surprising. To compare two extremes, the average cost for one year of education at a public university was $15,600 and $30,900 at a private for-profit university. Instructional expenses per student were $9,418 (60.4%) for a public and $2,669 (8.6%) for a private for-profit.
Vietnam is awash in grand dreams and ambitious plans designed to meet pent-up demand for quality (read international standard) education and training at all levels from pre-kindergarten, K-12, to postsecondary. As a result, there are burgeoning opportunities to make money for those who have the requisite vision, initiative, connections, and capital. Enterprising individuals, including social entrepreneurs whose goal is to “do well and do good,” can do this by meeting a real need, ideally in a high-quality and efficient manner.
Of the 441 postsecondary institutions in Vietnam, 86, or 20%, are private, as in for-profit. Private universities–with low overhead, generally low quality and growing demand—are the cash cows of Vietnamese higher education. In addition, there are the nationally accredited and unaccredited schools from the US, nearly all of which are for-profit. Added to this mix are the limited number of fields of study that attract the lion’s share of students, including business administration, banking and finance, engineering, and IT. (The “disconnect” between the number of young people enrolled in these programs and Vietnam’s current and projected needs presents some problems of its own).
In addition to expanding the capacity of domestic higher education and raising the level of quality (faculty, staff, infrastructure), both of which are imperatives that only money can buy, legitimate foreign higher education providers, including those from the US, “new model” universities (e.g., Vietnamese-Germany & University of Science and Technology of Hanoi) and new private non-profit Vietnamese universities based on the American model ( Tan Tao, Tri Viet), can play an indispensable role in meeting both demand and need.
The challenge for regionally accredited US institutions with plans to create in-country degree programs is how to offer the quality that Vietnam so desperately needs and that the accrediting agencies requires, while at the same time finding a “price” that the market can bear and that allows the schools to at least cover their costs. This is a matter of understanding the market, taking a long-term view and, in some cases, waiting patiently for the rising tide to lift more boats.
Mark A. Ashwill is managing director of Capstone Vietnam, a human resource development company based in Hanoi, Vietnam. (In the US, Capstone Vietnam works exclusively with regionally accredited institutions.) He is also a contributing editor for GlobalVietDiaspora.