Inside the Global Private Higher Education Sector with Dan Levy

Alex Usher: Hi there. I'm Alex Usher and this is the World of Higher Education Podcast.
If you spend any time around higher education in multiple countries, you'll know two things. The first is that public higher education tends to look pretty similar from one country to another. And second, the status of private higher education varies enormously. How big the sector is, the ownership forms, the missions, the delivery modes, can all vary quite significantly.
Private higher education occupies both the top and the bottom of the global prestige hierarchy. At the one end, you've got places like Harvard and the United States, or Yonsei University in Korea. And at the other end you've got mom and pop for-profit institutions teaching mainly or entirely below the bachelor's level.
But what's in between is a pretty rich tapestry, and an important one too. By most counts, private higher education educates about a third of all students worldwide, and is of particular importance in countries where rapidly expanding access is overwhelming traditional public institutions.
With me today to make sense of all this is Dan Levy. He's Distinguished Professor in the Department of Educational Policy and Leadership at SUNY Albany, and he's the founder and director of the program for Research in Private Higher Education, a global scholarly network. Just last year, he released a magnificent book called A World on Private Higher Education, and no, I don't just like it because of the name.
It's mainly a topology. Which might not sound all that interesting, but given the richness and complexity and variation of the subject, the degree to which the book is both comprehensive and readable is a real achievement. I asked him on the show to see if he could replicate the book's feat in under 30 minutes, and I think we came close, but I'll leave it for you to judge.
Here's Dan.
So Dan, before we get into some of the broader themes of your book I wanna make sure that we're all on the same page about what you mean by private. 'Cause that could mean, some people use that to talk about privately governed universities, and some of them talk about privately funded universities and there's a lot of overlap there, but it's not perfect. So when you talk about private universities, what are you talking about?
Dan Levy: Yeah, I think that there, there's ambiguity in a good deal of the world, but certainly in the Anglo world where there's been so much privateness in what are officially legally public universities. But the way I've done it over the years and continue in my latest book is that private is whatever is legally designated as private in the country in which the institution operates. And of course, public the same, whatever is legally designated as such.
Eventually, whatever the ambiguities inside a country, each country presents its data broken down by private and public to UNESCO. So that's what we use as the starting point. That's the operationalization. It's not perfect. I would just argue that it's at least as good as any other. And then from there we go to the empirical. I like the word overlap quite a bit because I do think that we find tremendous overlap between what is legally private and what we think of as private, but not always, and the exceptions make for points of contrast. We're always interested in exploring degrees and shapes of privateness, and that becomes more subjective. But we try to start with an objective definition, legally based, generally related to ownership of private and public.
Alex Usher: So how big is this sector worldwide? How many students and how many institutions are we talking about?
Dan Levy: Yeah, it's funny, we don't have as close an estimate on institutions as we do on enrollments, but I think enrollment is the more important indicator anyway. And if we're talking about the total for the world we're going by the estimates that are made again by UNESCO and um, we're talking about for 2024, perhaps 268 million. They don't give an estimate that updated for what the private share would be. But if we go with the private share as of the most recent year that we've calculated pretty closely, 2015, and I know that you and I both believe that for some time, the private share has been fairly stagnant, fairly steady at about a third of total enrollment, where we're probably at a good 85 million students in private institutions.
The only estimate that I know of, or the major one, for the number of institutions comes from again, UNESCO with the IAU, international Association of Universities, and that's about 21,000. But that figure strikes me as extraordinarily low. You could get that high, depending upon your accountant, how you account institutions, from only India alone.
Alex Usher: Well listen, your book is centrally, I guess, it's about how private higher education isn't a single phenomenon. You know, you have a useful three part topology of private institutions, and it's adapted slightly from the one that you created almost 40 years ago when you were studying Latin American higher education. I want to go through those three types one by one. And the, and the first type that you talk about is identity based private, higher education. What does that term mean? What kind of institutions fall into this category?
Dan Levy: The identity institution is an institution which is primarily devoted in its mission and operation to promoting the identity or preserving the identity of a group. This is a, a social group and by far the most common example, both today and throughout history has been religion. So the religious type here is overwhelming. But we do see examples of private institutions that have a similar purpose for gender, particularly for women, particularly when they were excluded from public universities, and also for different ethnic groups.
What I do make is a distinction to be technically an identity institution, the written mission, official mission of the institution has to make identity very, a very notable pursuit, at least as notable as any other pursuit. So it could be religion along with academic but, many institutions over the years, many identity institutions lose their identity and become what I would call a group related institutions or group intensive institutions, but not quite identity. And then for these identity institutions, of course, I'm, defining them as private, but they do have prominent public cousins all over the world.
Alex Usher: Ya, certainly in Canada, there's a lot of, a lot of our universities in Canada started out as religious institutions and more or less stopped being them when they took public money in the 1950s and, and early 1960s. There would, I assume there's a lot of that around the world of that kind of shift.
Dan Levy: Quite, quite a bit and the, the United States um, and people don't even realize many of the Ivy institutions were religious institutions at the beginning and, could argue whether they were quite identity institutions or not, but the point is yours, that religion was a very big element in what eventually evolved into either just secular private institutions as in the United States, or into public institutions.
Alex Usher: The second sub-sector that you talk about are, I think you used the term elite or semi elite, and I guess elite, you obviously mean places like Harvard and MIT in the US, or Waseda or Keio in Japan. But those are fairly rare, right? So I guess that's why you include the semi elite as well. Who's in that group, who is semi?
Dan Levy: Yeah, the um, semi elite is, I have elite as the um, sub-sector of private higher education, but empirically, as you say , it is almost always what I call semi elite, and I make a, a fairly simple distinction here. Elite is a reserve for internationally elite. And as you say, extremely rare.
Some examples in Japan, but the only country that has and has had a good deal of truly internationally elite, private higher education is the United States. It's part of the exceptionalism of US history and reality. There's one other country in the world, interestingly enough, that has gotten to where it has a set of world class, so truly internationally elite private universities equal to its public universities, and that's South Korea.
But only the United States has a decided private lead on the a elite. And after you, you get passed, the United States get passed South Korea, you, you have only very few examples.
Alex Usher: Right. And then the third sector or sub-sector is what you call demand absorbing institutions. Now that's, I got the impression of reading that it was mostly a residual category, it's whatever's not elite and whatever's not identity. And it's includes a lot of for-profit, but it's not entirely for-profit, in fact, a lot of it would be not for-profit. So where does that term demand absorbing come from and, and, and what does this sub-sector include?
Dan Levy: Yes, and so, let me clarify because there is a distinction between the work on Latin America 40 years ago and what I'm using now. The term of demand absorbing came from the fact that particularly in studying the developing world, and Latin America was out in front for the developing world in Massifying within mostly the public sector, but then when the demand for higher education was even much greater than the fast expanding public sector could absorb or would absorb even as expenditures rose , governments in general were unwilling to refuse the demand. But neither did they feel they could pay for it or did they wish to pay for it to the full extent. And so they became permissive about allowing private institutions to rise up. These were demand absorbers. They generally didn't have all that much mission, religious or academic pretensions, but they would give at least some kind of credential and they would at least take in students whether they would graduate them or not.
But, over the years, I made demand absorbing only a type within a wider sub-sector, which I call non elite, which still fits your characterization that it is something of a leftover, it is not academically oriented nor identity oriented.
But I realized that a good deal of the non elite higher education is not truly demand absorbing. Even if it once was, eventually demand in many countries ceased to be that great. And a lot of institutions were just kind of, if I might say blah institutions, or meh, or mediocre institutions. They were taking in students, yeah, but they needed to do something more than that. And so, what I find that on the more positive side of this are institutions that may be non elite in their characteristics, but they are distinctly job oriented, however successfully or not. That's principally what, defines how they try to construct themselves.
And here I think there's a particular affinity for, for-profit form. But on the other hand, many of the legally nonprofit institutions worldwide are, behaviorally look a lot like the for-profits. That's another topic unto itself. But I do think that for-profit and for-profit like behavior are especially common in the non elite sector.
Alex Usher: We're gonna take a short break. We'll be right back.
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Alex Usher: And we're back. Okay, Dan, we talked about institutional types and I know those three or sub-sectors, and I know those three sub-sectors are present pretty much throughout the world, but they're lumpy, they're not evenly distributed, and you do get regional patterns. Latin America, as you said, is, is is one pattern. I think you've got others in in Africa and Asia and and the Gulf. What can you tell us about those regional patterns?
Dan Levy: Okay. I do even early in the book, in the, in the second chapter, I do regional overviews so that before we get too deeply in the weeds on types and, and sectors and all, we try to give some general characterization of regions. But I would say this and it's thematic to the book, although there are regional distinctions, what is most remarkable to me and has been over the decades, is how replicable the private patterns are, and the private public patterns. So, what private higher education is, well, it's more than one thing, but we see those multiple things again and again in places, and sometimes in remarkably sequential ways, as with the start on the religious side and then the relative secularization, the rise of some kind of semi elite alternative, and then the overflow into non-elite. We see this in every region. And so as much as I do get into regional differences, they vary over time. And what I'm more struck by, and would like the reader to take away is how there are almost, if I were to be exaggerating, just a bit, laws of private higher education. There are patterns that are so repetitive, I mean, I, I opened the book with a teasing forward about how you might guess what sort of private higher education there might be in Iran. And my argument is that if you knew nothing about Iran politically or economically or in terms of theocracy, and all you knew was global, private, higher education, you would guess right more of the features that are found in Iran than if you were the greatest expert on the political economy, but didn't know private higher education elsewhere. So that's, you know, that's a colorful example of how much I think private, higher education, global patterns are found.
Alex Usher: One thing that you mentioned at the start of the program was that about 30% of global enrollment is in private sector, and that accords with what I've seen. One of the things that I think is interesting though is you said this, this actually hasn't changed very much in the last 20 years or so. Why is that, and might that change at some point in the future? Would it go up? Would it go down?
Dan Levy: Your guess is certainly as good as mine . I retreat to multiple reasons for why the private chair has stagnated. And it's important to couple that with the, with the fact that the private numbers have continued to increase greatly. But so have the public numbers. So this is not, you know, this is not the fall of public higher education in terms of its size, but it's much easier when the private share of higher education globally was 10%. If it got 20% of new enrollment, its share was rising. Once it got to 30, 33% getting 20% would actually not increase, its share would decrease. So it's just harder to raise, to raise, share when you get up to a certain point.
But it's also true that there's been public responsiveness and um, it's fascinating to see in, in the news right now that in Indonesia, for example there is a great slippage of the private share, because the public institutions are taking in more students who have to pay. And again, we've seen this, we've seen this act, uh, we've seen this play in many other countries. Public institutions sometimes react, and sometimes the way they react is by partly privatizing. So they keep maybe a tight quota for the academically more select students who get in and don't pay, but then to make their institutions financially viable, and also in part to fend off the private growth, they create second track for other students who are paying students and often go for curriculum that's a lot like what they would get in the private, legally owned institutions.
So, that's a pushback effect as well. And then, another factor if we go to the regime level and public policy is, sometimes public policy is pushed back, it's cracked down on the worst of the demand absorbers and closed them, that hurts private size, and it's just created in many cases, regulations where the licensing or authorization process gets tougher, because there's a natural tendency to get a a public opinion reaction and an employer reaction to the proliferation of demand absorbing institutions.
Alex Usher: And yet we have this one part of the world , western Europe, right? Like the most public and the most publicly funded systems in the world, where private higher education right now is going gangbusters. Spain and France, you know, have between 25 and 30% of their students now are in the private sector, which is very close to the American number, right? Which is again, about 30%. Italy, it's, it's doubled in the last 10 years. Germany, it's doubled in the last 10 years. Poland, you know, Poland was one of those typical demand absorbing sectors, you would assume once the the demographic wave went away, that, that their public sector would shrink. You know, 'cause that's what happened in Russia, that's what happened in Romania. But Poland, they suddenly bounced back and they're 35%, they're bigger now than they were 20 years ago. What's driving this growth in Europe specifically?
Dan Levy: The, the answer's clear. It's uh, I'm actually a very wealthy man and I've engineered all this to promote my book. Um, because, if any part of the world you would think of as the bastion, the historical bastion of public universities, and public universities of high quality. So, okay, in Latin America and then in Africa and in South Asia, you could talk about public universities crumbling and that contributing to the growth of private semi elite, but Germany? So, a few years ago, the German government asked itself exactly the question that you're asking yourself and asking me, how can this be happening here? Our public universities are free. Our privates charge. Our public universities are great still. Why are more and more students going to private institutions?
And as the German government would, it funded 21 research projects to look into this. What is private higher education, why is it growing and what is it doing? And um, I was invited over to Keynote and participate in some of that research, which is ongoing. But one of the messages that I came to bring was, it's not just Germany, it's general to, to Western Europe.
I think a good deal of this private growth is what I would call product or job oriented. And I think that what you see in Western Europe is not unsurprisingly a lot like what you see in the UK and, and Canada.
So this, I think, very much brings Western Europe more into the mainstream and even though, here's a good example, it has, if we look at Western Europe, it has a regional pattern. It seems to me that the regional pattern is late growth of private and a growth that is overwhelmingly product oriented. This is not a growth of religious higher education. It's not a growth very much of semi elite higher education, though there's a bit of it at the very top in each of these systems, the Italian, Spanish, the, the UK, but mostly it's job oriented, non elite. So that's, that makes a very big difference from say, the configuration you have in Latin America.
So to me it's a very plurals market dynamic that even when parts of the private sector decline, as you would expect in private competitive arenas, many private institutions die off and fail. But voila, there arise new sorts of institutions which are different from the previous private institutions and provide not only private public contrasts, but fresh, private, private ones that none of us geniuses had predicted.
Alex Usher: Dan, thanks so much for being with us today.
Dan Levy: Thank you very much.
Alex Usher: And it just remains for me to thank our excellent producers, Tiffany MacLennan, Sam Pufek, and of course you are listeners and readers for joining us. If you have any questions or comments about today's episode, please don't hesitate to get in touch with us at podcast@higheredstrategy.com. Join us one week from today when our guest will be Atilla Paustis. He's the head of the department for Higher Education Research and Development at Donau University in Krems, Austria, and he'll be talking to us about one of his big new pieces of work, the Global Observatory on Higher Education Change in its first annual report. Bye for now.