The Year the Money Ran Out: Global Higher Ed Review

Tiffany MacLennan: Hello everyone and welcome to the World of Higher Education Podcast. I'm Tiffany MacLennan, and if you're a faithful listener to the podcast, you know that this means that this week our guest is Alex Usher. This week we're doing a year in review talking about some of the global higher education stories that have been interesting all around from massification, to private higher education, to Trump's effects outside of the US, to what the most interesting stories are for the year. But I'll pass it over to Alex.
Alex, you're usually the one asking the questions, but today you are in our hot seat.
Alex Usher: This is the same seat I'm always in. Just so you,
Tiffany MacLennan: Ah, that's a good point. That's a good point. You're in the question seat today. The question seat. Let's start with the global elephant in the room. We talked at length last week with Brendan Cantwell about the domestic effects of Donald Trump's education policies, but what impacts are we seeing internationally?
Are there any countries or institutions that are actively trying to kind of capitalize on American's chaos? And if so, how serious are their efforts to poach potential talent and build the reputations?
Alex Usher: Um, there are lots of countries that think they're in a position to capitalize on it, and almost none of them are serious about it. So, you know, I mean, the thing is, is that, you know, ask yourself the question, where is the destruction really happening in the United States? What's, what's the, where's the greatest danger? And the answer is, is, is the, huge amounts of money, you know, NIH funding is gonna be down by a third next year. NSF funding is gonna be down by more than 50%. So it's those scientists who are working in STEM and health who have the greatest labs in the world, and now no money to put, you know, to run programs in them.
What's gonna make a move though? Like, you know, are there alternatives to having labs that big? Are there alternatives to having the perks of being a top, you know, STEM or health researcher at a, at an American university? You know, I, places like Ireland are, as Ireland has no research culture to speak of, right? I mean, like, it's just the idea that Ireland's gonna show up and, and be competitive or God, I just went through a whole list of Czech Republic or you know, India talks about this is our time to shine. Like, come on guys, like, be serious. That's not what's going on here, right? There's no, there will be an exodus to industry — of scientists to industry. It's not clear to me that there's gonna be an exodus of scientists to other countries.
I think the one group of people who might go to other countries are social scientists, to be honest with you, or, or humanities. And, and you've already seen in, in you know, in North America here, Toronto, we've, there, there are three or four big American scholars that have just been snapped up by UofT. That's where the it's gonna be because we don't have to build them labs. I mean the, the big American lead is that all this soft scientific money has built incredible you know, research hospitals. It's built incredible, all sorts of things. I mean, in the middle of nowhere, like Birmingham, Alabama has 25 square blocks of, of better healthcare research facilities than almost anywhere in the world. And it's in Birmingham, Alabama. Like, what, how does this happen? And the answer is because America spent money on research like nobody else out there. And um, they're not doing it anymore. So it's not clear. I think, I think a lot of that scientific talent just goes, poof. It's lost to academia. It's not coming back. And that in the long term creates a real problem for the world economy.
Tiffany MacLennan: Keeping on the American theme, are there other countries who have been kind of taking either, I hate to use the word lessons, but lessons from US policies and implementing them since Donald Trump has come in? Or has it actually kind of gone the opposite way and I hear what not to do, if you want to bolster your education sector.
Alex Usher: I think certainly the arrival of MAGA to power made suddenly everybody realize, actually, you know what? Having talented researchers in charge of things is not a bad idea, right? And so we saw in the elections in Canada and, and, and Australia, you've got center left governments that, that were thought to be in trouble, suddenly win again.
Romania, same thing. The, the one exception seems to be Poland. But, you know, I'm not, I'm not sure that the culture war end of things was necessarily, you know, was never as virulent in most countries as it was in the United States. I think the United States, in many ways was, I mean, is not the originator of this stuff, right?
It's, it's Victor Orbin and, and what's going on in Hungary. It's, you know, the, the, the, the Project 2025 crew has pretty clearly said, yeah, we need, we need universities that run like Hungary. And the Hungarian Minister of Higher Education is having these press conferences all around the world talking about how everybody's looking at Hungarian higher education.
So, there's been a big shift and it's that the, the Americans have, have moved over to the Hungarian side. I'm not sure anybody else has followed them. And I, I don't think that the arrival of a new president in Poland herald's that there either, because the, the other side holds the parliament. So I, I don't think so. I don't think we're seeing it. Doesn't mean it couldn't happen. But I don't think we're seeing it just yet.
Tiffany MacLennan: Absolutely. One thing that we have seen though is a lot of talk and action on massification of higher education over the year. What countries do you think have made some of the most interesting moves in expanding access to higher education? On the flip side of that, are there any countries who are hitting their capacity?
Alex Usher: Uh, so everybody who's improving is hitting their capacity, right? Like I think that, that, that's kind of important is, is that what they're, dealing with massification isn't just, oh, hey, let's build a new school here or there. It's usually you're running behind demand.
And I think, you know, the really interesting cases for me are Uzbekistan. So Uzbekistan is up fivefold in the last decade, and I'm not sure there's any country in the world that's ever moved that fast. A fivefold increase in students, I think is, I forget the exact numbers, but it's sort of from 200,000 to a million students. And partly that has to do with a, a booming population and partly that has to do with increasing wealth. But also it has to do with the government that's prepared to say we're gonna do some things with domestic institutions and we're gonna do some things with domestic private institutions and we're gonna do some things with international institutions. Whatever the hell works, we're gonna throw spaghetti at the wall and see what works.
You know, I think Dubai has done, was just seeing Dubai is up 30% this year, mostly on the base of international students, which is, you know, sort of a different type of massification. But I think all across Africa, you're seeing people run into these kinds of, of crises 'cause they suddenly, they've promised education to people and they can't quite deliver. So I think the biggest ones that you see are Nigeria. Which has opened 200 new universities this year. And Egypt would be another big one, and I think you're starting to see it in, in Kenya, Tanzania. There's a, there's a number of countries in Africa. Ghana is another one where they've just hit the point in economic development where lots and lots of people want higher education. It's not always clear that it's a good idea, from a public policy perspective, to give it to everybody. Like, you know, those are at certain levels of education you, you know, of, of, of economic development, you can do 70% participation rates. Other, it's harder just to stay 20, right? Like, it just depends where you are.
And there's just not that much public money. These are in some cases, these are countries that have very poor tax generation, tax revenue generation capacities. So how do you get people to pay? It's a real problem. And so I think we is a lot of countries where people make promises about massification and they're finding that they can't keep their promises.
And, and that, and I think that that will be a continuing story for the next three or four years in some of those countries, which is just how do you, how do you keep the promises you made?
Tiffany MacLennan: And I think that kind of lends space to what my next question is. What is the role of private higher education in all this? They've been popping up more and more. The conversation's only been growing. Sometimes these institutions are filling gaps and sometimes they are simply causing problems. But we saw some pretty major regulatory moves this year with governments, trying to reassert control really over a really booming sector.
Do you see this as a broader shift? And what do you think this means for the future of private higher education?
Alex Usher: So I don't see a big shift in private education in in less industrialized countries. I think what you're seeing there is just the public sector is just exhausted. It can't meet demand, and so privates show up and you know, the question is whether or not you're, you're regulating them in a way that they are bottom feeders or they're contributing to the economy. Right? I mean, and, and people have trouble doing that. It's difficult to get that balance right. There's lots of countries that haven't had that balance right. I think there are some examples, Malaysia, for instance, I think has done a pretty good job over the years, over the decades of doing that kind of stuff. It's a, it's a good model for lots of those countries.
I think the really interesting stuff in higher education is the vast increase in private higher education in Europe. Okay, so you're, you know, Spain, cheap tuition fees, 25% of the system is now private. France free tuition, 25% of the system is private. Germany free, I think it's almost 20% is private now. And I think, you know, it's a slightly different problem. But you know, pub strong public sector systems can ossify, they can get to the point where they're not meeting demand anymore. And in Europe, there's actually very little that forces public universities to listen to labor market demand. And there's certainly the, the, the issue that prices rise, you know, the price of providing educational rises as the whole you know, the issue of, of labor costs going up too much and they actually can't serve as many people as they want.
So France, for instance, right? France, one of the reasons things are growing in France is because they have a hugely growing, unlike the rest of of Europe, their student numbers are going up and they're not giving their public sector more money to deal with those students. And so people leave, they just say, this is not a quality education, we're going somewhere else. And we had uh, Nicolas Badre on at one point, and I think he gave a really interesting view of what private higher education can add to the system. And I think it's fascinating. You know, you would've expected maybe private, higher education, the big news would be in a, a free willing place like the United States, but it's not, it's Europe. That's where the story is right now.
Tiffany MacLennan: Are there any countries who are doing private higher education, particularly well this year? What is the good private higher ed story of the year?
Alex Usher: look, it's hard to tell 'cause these, these things take years to, come about. I would argue that France and Germany might be success stories actually, right? Of, of sort of, you know, saying we're gonna keep our, our top public institutions, but we're gonna allow some experimentation.
I think there's probably some stories that we don't know about in Asia. I don't see much, I mean, there's always good news stories from places like Tecnológico de Monterrey in Mexico, which I think is one of the most innovative institutions in all of the Americas. So there's always good stories out there.
I'm not sure you can judge, you know, I don't think there's anything different enough about this particular year to tell you very much, but I do think we're gonna need to pay more attention to that in a way that we haven't maybe since the big explosion of private higher education in Eastern Europe after the fall of the, the Berlin Wall, where they just sort of said, okay, look, we need to do something. We have all these universities, which are totally discredited in the social sciences because they've been Marxist for the last 70, 50 years, 40 years. And, and we need to do something. And so they let things rip, and then it took them a while to figure out, okay, how do we bring that down into a decent number?
And I think you've got good story. I mean, some of those countries Romania Poland, I think you've got a reasonably good systems for controlling, you know, not without difficulties, like Romania had some nightmares in there, particularly, you know, sorta 20 years ago. But look up Spiru Haret University sometime and, and see how bad it can be when, when you sort of let the market rip.
And I would say there are now good examples around the world that Africa can look at in, because I think Africa is one of the big places, Central Asia is another place where we're gonna be using more and more private education to soak up new demand. I think that's sort of the interesting question. How do you translate that learning from one context to another?
Tiffany MacLennan: Hmm, absolutely. We're gonna take a break. We'll be right back.
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Tiffany MacLennan: And we're back. Alex, in the least good stories of the year, headline after headline after headline was basically, ah, there's no money. There's budget cuts, doom and gloom. What crisis stood out to you the most this year and what made it different from other countries?
Alex Usher: Well, I mean, Argentina probably comes number one, right? Because over the last two years since President Javier Milei has, has come into power that's now a drop of where since he's come into power, I think the university's purchasing power is dropped by about 60%. Like it's, it's big, right? Like it's, it's so, you know, Milei came in, there was a lot of, there was high inflation, and the way he was gonna stop inflation was to cut public spending. So universities had to deal with the remainder of the high inflation and they had nothing to, to, to put underneath it, you know, plus Milei thinks they're all communists. So this is you know, that, that's, that's been number one just in terms of size.
Kenya's, the other one, I mean, Kenya's, again, as an institution, as a country I think they have been very ambitious in opening universities, in expanding universities, and they're just not putting money into it. And they thought they could get students to make up some of that, but it turns out actually Kenyans aren't rich enough to do that. So the, so what they thought they could do through student loans, they couldn't really do through student loans. And then they blame the funding formula. I'm like, no, it's not the funding formula, it's the total amount of money you put in, right?
Like, so there's this division, some people think, correctly, that funding formula's about how you divide how much money there is in the system between institutions. Other people think the funding formula is how much the government gives institutions in total. Kenya's just missed the boat on that one. Like they just, they haven't, they think, they think one is the other. It's a real problem.
Gosh, who else have we got this year? I mean, you know, UK you, obviously we're seeing in developed countries, right? So the UK, lots of program closures. France, there's lots of institutions in in deficit. Canada, obviously we've had lots of issues. And the US even before Trump came along, there were, there were some serious problems. So I would say, you know, we've almost forgotten now the extent to which international students have been a, you know, were. They helped institutions on the way up, and they're certainly pushing them on the, on the way down right? Is, that's been a problem everywhere.
But I know people are sick of me saying this, but you know, the real problem here is that across the world we've, we've built higher education systems that are simply more, are larger and more generous than anyone wants to pay for, either through taxes or through tuition fees.
So, yeah, we got a great system, but nobody wants to pay for it. And that's the, we, we we're seeing that, it comes out in different ways, in different parts of the world. But that's the, the key story.
Tiffany MacLennan: Do you think we're heading into an era of global higher ed austerity, or are there some places who are really kind of kicking the trend?
Alex Usher: I think it depends what you mean by austerity. I mean, look, the, you know, the, the problem in Nigeria, the problem in in Egypt is not that they're not spending, is not that they're spending less money on higher education, it's that the demands for higher education spending are simply outstripping any public ability, public university ability to go with it.
And I think that's true in parts of the Middle East, in almost all of Africa maybe to a certain extent in Brazil and in Central Asia. It's not the case elsewhere. Elsewhere where you have more mature systems, where you've already got high participation rates, the issue is, can you, can you maintain the funding for those institutions while demography goes in the other way? That, that's the, that's the second type of problem, right? And we're seeing that in Japan, we're seeing it in Korea, Taiwan. You know, I think there's a number of places in in Europe where we're seeing that issue. And the third type is, you know, with these countries that are still growing, but they just don't wanna spend money in higher education. And that's Canada and that's the United States and the UK. That's a third type of problem. And in some way, but remember, those are among the richest countries that have the best funded universities to begin with.
So I think, at an international level, what's happening to some extent is what we saw in Canada with the province of Alberta. So for my foreign listeners, remember, just so you know, the, the, the funding in Canada is very different from province to province, and for many, many years the province of Alberta had funding, which was 40 or 50% above the national average. I think what you're seeing is in a lot of those countries where we have had vastly above the OECD average, so again, UK, US, Canada, we're being pulled down to the median, to the, to the, the average. And so not everyone would call that austerity. Like it feels like austerity here, but if I'm in a place like, I don't know Greece or you know Lithuania, I look at the amount of money that's still in the system in Canada, the UK and I think, boy, I wish I had your problems. So I think there's, there's three different types of, of situations at play here.
Tiffany MacLennan: One of the most interesting things about working at HESA is that we just kind of get to read cool things for a good chunk of the time. What is the coolest story you've read this year or the most unexpected?
Alex Usher: I think it was when the business school at Vietnam National University, somebody there clearly had read one of those stories about how business leaders, the most successful business leaders were tall. You know, there's a, there's a correlation between, I don't know what it is, it's like CEO pay and height or something like that. But it's the same thing with politicians, right? Tall politicians tend to beat smaller politicians. Canada's got a lot of small politicians right now, but um, anyway, we uh, I digress. Uh, VNU decided uh, someone decided on the basis of that, that they needed to institute a minimum height requirement to get into the business school in Hanoi. And I think that was my favorite higher education story this year that, that was just ludicrous.
I mean, there's other ones. Just the other day I saw one, there was a, a, university in China where credential inflation had gone so much that the director of the canteen, the job for canteen director was posted. And the minimum educational requirement was a doctorate. I thought that was, that was kind of, yeah. And, and people say that there's no unemployment problem in China.
You know, those are the kind of fun courses. I mean, I think from an an international perspective, and maybe, you know, I I, it's a private higher education story that I think was interesting was the story of Cintana, which is a, you know, they're using an an ASU, Arizona State University, approved curriculum, and they're opening franchises all over Asia. If that takes off, and then they've had some real success in, in recent months in Pakistan, mainly in Central Asia and, and moving into uh, South Asia. I think that may change a lot of the way that that those countries will expand their higher education system. So that's one, I think that's a really good, interesting long-term one to watch.
Plus of course, you know, the, the, the gradual introduction of, of AI into universities, which has so many different kinds of effects. Like, so to me those are the big they're not the curio stories. They're, they're not the Vietnam University stories, but they are the ones that we'll probably be watching a couple years from now.
Tiffany MacLennan: Leads well into my last question for you. What's one trend or change that you think we should be watching in the 25 26 academic year? What's it globally and what's it locally?
Alex Usher: Well, globally, it's always gonna be that nobody wants to pay for higher education. Like that, that's, that's so obviously the answer. And, and that doesn't mean that people don't wanna pay for higher education in the abstract. It's just that the actual amount that higher education seems to require to make itself run is beyond what people want to pay for.
So I think there will be, in a lot of the northern hemisphere there will be a lot of countries thinking about how do we make higher education cheaper? How do we make higher education leaner? Less staff intensive. Not everyone's gonna like that, but that, that will be the majority story, I think in, in lots of, you know, not everywhere, and, you know, Germany, the finances are okay, but boy I think, you know, we're going into a recession, right? I mean, what Trump is doing is he's, he's starting a global recession. And so what it means is even in those places where the government is inclined to support higher education, they're not gonna be able to.
And so I think you're gonna see cuts in higher education in a lot of places. I think it will not get any easier for the Kenyas and Nigerias of this world to, to adapt to the bigger, so, you know, an awful lot in next year, unfortunately, I think is gonna be about how do we do this? And I think, I mean, the other thing that will, that people will have to be thinking about is it's it's what I call the Moneyball question about American science. American science is the motor of global innovation, and the world suffers not just the US. So the question for the world is... You know, Moneyball, there's that scene where, you know, Brad Pitt says you, you keep, you keep saying, we're trying to, you know, we're trying to replace Isringhausen. We're not, we can't replace Isringhausen, but maybe we can recreate him statistically in the abstract.
And actually I think that's what a lot of the world's gotta do. What Look at all that's not gonna get done with those big cuts to NSF and NIH. And I think, you know, Horizon Europe and the Canadian granting councils and the Australian Research Council and Japan and whatever, they gotta look at it together and say, wow, what can we do together to recreate NIH and NSF in the abstract?
Because we have to. We have to. And that will be, that will be the most interesting story of next year, I think if people have at least enough imagination to try it.
Tiffany MacLennan: Alex, thanks for joining us today,
Alex Usher: Thanks. I like being on this side. I, I have so much less to do on this side of the microphone, so thank you.
Tiffany MacLennan: And it just remains for me to thank our co-producer, Sam Pufek, Alex Usher, our host, and you, our listeners, for joining us week after week. Next year, we are not coming back with our video, but we will be weekly in your inboxes and in all of your usual podcast platforming streams.
Over the summer, you can reach out to us with new topics and ideas, at podcast@hirestrategy.com, and we'll see you in September.