BC Business
B.C. has long been a mecca for overseas students looking for a safe, modern, ethnically diverse place to study and soak up western culture. But in the past five years, private colleges have morphed into an unregulated free-for-all where colleges and ESL schools go bust over night, leaving the former inhabitants of the classroom in chaos.
B.C. has long been a mecca for overseas students looking for a safe, modern, ethnically diverse place to study and soak up western culture. But in the past five years, private education has morphed into an unregulated free-for-all where colleges and ESL schools disappear overnight, leaving angry students stranded and the industry in tatters. How bad is it? Even Gordon Campbell’s advisers give the local private education market – and the provincial government’s handling of it – a failing grade. It was momentary bedlam when another private career college in Vancouver suddenly went belly up last June. The nearly 100 students and teachers found their Burrard Street classrooms empty, the computers gone, office files in disarray and a note on the door declaring Corporate Communications Training College had ceased operations. Media reports painted a scene of frantic students in a panic over lost tuition fees and no diploma to show for it. Foreign students like Jung-Ho Park, 25, of Korea desperately scrambled through college filing cabinets seeking records to prove she had been registered. Others, like website design student Pan Liu of China, spoke fearfully of being deported – their visas allowed them in Canada only if they were studying at the college. Marketing student Erin McIntyre declared she had blown five months and thousands of dollars by learning business practices “from the most disreputable business school around.” And the owner of the school, Lance Bracken? He reportedly fled to Thailand. The school’s collapse was far from an isolated event. The motley collection of private training colleges and language schools scattered around the city and across the province is the setting for an all-too-common scenario: every now and then one gets in trouble and then hastily closes its doors, leaving stranded students wailing about wasted fees. The students at CCT College were lucky. An official from the B.C. government’s private college regulatory agency showed up at the ransacked offices promising partial refunds of their tuition fees, worth about $150,000 in total, from a provincial fund. The students were also encouraged to seek placement in other local schools. The damage was quickly swept away. It seemed an efficient handling of a marginal industry’s minor problem with no great consequences. Except that the industry isn’t marginal, the problem may cost the economy tens of millions of dollars and the potential flow of new students to Vancouver from China is hardly inconsequential. Every time a private career college or English as a Second Language (ESL) school collapses in B.C., an enormous but unacknowledged local industry takes another hit. There are 550 private career colleges around the province, most of them in the Lower Mainland, offering everything from computer training to cosmetology, acupuncture to xerography. There are also more than 200 ESL schools in the province. Combined, these private businesses handle 120,000 students a year, while colleges and universities attract another 27,000. Annually, the industry generates an estimated $2 billion in B.C. economic activity – more in spin-offs than the film industry here, according to a report by the BC Progress Board. The tally includes tuition, salaries, facility costs and what students spend on food, travel, recreation and lodging. While they may look young and carefree, the international students smoking at break time outside the dozens of ESL colleges on downtown Vancouver streets are a profitable clientele for B.C. schools. “They find the learning environment a lot more laid back, and many of my students used to skip a lot of classes,” says Kristen Thompson, a 26-year-old Vancouverite who taught at GEOS Language Academies in Japan and Vancouver. “But since they’re paying their own big money for it, they ultimately tend to get serious enough to pass.” Two-thirds of ESL students are in their 20s, typically taking courses of at least three months duration; most students have at least some university education; and they spend about $1,000 a month for tuition and another $2,000 for living expenses and housing, according to the few surveys that have been done. The largest group, 28 per cent, come from Korea followed by Japan at 19 per cent and Taiwan at four per cent. Two-thirds of them stay in “homestay” – private homes where they typically pay the hosts $750 a month. In the summer, the number of students on short-term courses doubles, as does the influx of Mexican and Brazilian students. As important as the economic impact of these visiting students is for B.C. now, the much larger and lasting potential lies in the positive feelings these students develop about Vancouver and Canada as a place to send their friends for ESL and career training – and to eventually do business with. Regulation seriously lacking Five years ago, private education was poised for growth that would rival B.C.’s biotech industry, but because of petty industry rivalries, provincial government neglect, aggressive competition from other countries and those occasional shut-downs and scandals, the B.C. private education industry is losing credibility – and customers. In a report last December, Premier Gordon Campbell’s corporate and academic advisers, the BC Progress Board, warned the province must get smart about international education or it will become a dropout in a business destined to become gigantic around the Pacific Rim. The report stressed that the province’s “laissez-faire” approach threatens B.C.’s share of the global market for private education. An Asia Pacific Foundation report released in March added that this province follows Canada’s overall “lackluster performance” in the industry, which is costing the country billions of dollars in lost revenue. In truth, much of what B.C. has to offer is high-quality education, but the private education sector is almost completely unregulated and prone to failures, and many of the private career colleges refuse to submit to standardized inspections and the requirements of certification. Whatever positive attributes B.C.’s private education industry can lay claim to, they’re presented in “a confused and uncoordinated image to the market” abroad, said the Progress Board. China, obviously, is the biggest new market. But because of career college collapses such as CCT College, Ascent Career College, the Computer Master Institute of Technology during 2005 – as well as an unknown number of language schools (no one actually keeps count), the B.C. image isn’t just tarnished. It’s hurting. Last year, the local industry was dealt a major blow – not one that garnered much publicity. Perturbed over quality issues in this province, China blacklisted B.C. as a destination for new students seeking private English language training. [pagebreak] Back to the beginning Private education in B.C. hasn’t always had trouble making the grade. When the BC Liberals initially rolled into government in 2001, the career school industry was doing well and the ESL sector here was booming. And no wonder. Vancouver, above and beyond the rest of the province, was enjoying a positive image abroad as a tolerant multicultural city that’s a modern, clean, safe and affordable place for young people to come learn. And the Eastern hunger to learn about Western culture – not just a career skill, not just English, but everything from fashion trends to slang to how to snowboard – made youthful Vancouver very popular. It’s really not so different from young people traipsing off to Europe to learn foreign culture, soak up continental sophistication and have fun. Now North America is the old country, the cool culture, the post-graduation adventure for the new world’s youth. But to Canadians used to the highly regulated and publicly funded elementary, secondary and post-secondary education and training, these newcomers’ acceptance of privately operated schooling is largely unfamiliar. By 2001, the B.C. private career and language training industry was growing by 20,000 additional students a year– far faster than the public-sector education system. In 2001, in response to lobbying by the industry, the Liberal government scrapped mandatory registration of ESL schools and schools’ guarantees to reimburse student tuition if the school failed. The upfront financial commitment and cumbersome regulations were replaced with nothing. “We didn’t expect we’d get complete deregulation,” acknowledges Linda Auzins, spokeswoman for the Canadian Association of Private Language Schools, a small group of ESL schools now pressing for voluntary registration and tuition guarantees. “The government was in its deregulation mood.” Quite simply, no one knows how bad it is. Deregulation opened the gates, allowing any number of self-declared language schools in the Lower Mainland to provide dubious training. It prompted a rise in schools owned by offshore entrepreneurs who exclusively recruited students from their home countries to their Burnaby or Surrey basements for mono-cultural exposure to English, instead of mixed-nationality classes. The result was a subculture of so-called discount schools and “conversation clubs” that used recruiters in Vancouver to lure naive newcomers to casual English-speaking get-togethers for as little as $300 per month. The quality of ESL training and the number of B.C. schools that recruited students and then disappeared with their tuition is unknown. “We simply don’t know how many schools failed – nobody knows,” says Auzins. In eight years, five of her association’s 70 member ESL schools have failed. Students from other failed schools sometimes end up on her doorstep, she adds. Last year, recognizing B.C.’s deteriorating reputation for quality ESL training, CAPLS finally agreed on mandatory accreditation, which includes common standards of teaching and inspections as well as financial security for students. But CAPLS is just one small piece of the ESL schools market, representing only 35 in the Lower Mainland, compared to the 150-plus unaccredited ESL schools in the same area. “Some claim the cost of joining and accreditation is too high [at $2,100]. I suspect there are some that don’t join because they don’t meet CAPLS standards,” says Auzins. “It doesn’t take many schools to fail and the word spreads all over Asia. Misperception grows very easily. We are a big – potentially huge – but very vulnerable industry.” Auzins isn’t alone in her fears about the industry’s future if standards and regulations don’t kick in soon. “The word gets out. In China the perception is that B.C.’s had these collapses. So they write B.C. off,” says Adrian Kershaw, former VP of community and distributed learning services at Thompson Rivers University in Kamloops and principal author of the Progress Board’s report. “I’m sure the vast majority of schools are bona fide and doing the best they can,” he says. But “everyone gets blacklisted, including the good ones.” ESL enrolments from China are currently minor, but clearly the potential for B.C. schools is huge. Overall enrolment of students on visas (staying longer than six months) in B.C. peaked in 2004, according to federal statistics. The trend has spread to B.C.’s public universities and colleges, “which have seen a serious decline in ESL enrolments,” according to a November 2005 report of the 24 B.C. universities and colleges. A poor self-image and strong competition from the U.K., Australia and the U.S. mean “the numbers are dropping in B.C.,” warns Kershaw. Agents sound alarm One of the reasons a country’s reputation for ESL training spreads so quickly is the agent system. International education agents operate like local tourist agencies in almost every offshore country. Their job is to attract and process customers for clients – Canadian (and other) schools. Agents earn a commission, typically 20 per cent of the tuition fee, for every student placed at a school. Sixty per cent of all students attending a CAPLS ESL school in 2004 came on an agent’s recommendation, and some universities and colleges in B.C. rely on agents for up to 80 per cent of their foreign recruits. If the word about B.C. is bad and students begin to balk, agents will simply steer them elsewhere. “They market, they distribute information, run an office, process all the paperwork before entering Canada, including steering students through immigration and even buying the plane tickets,” says Scott Jeary, co-principal of English Bay College, an ESL school in Vancouver. Jeary’s Water Street college of 200 students specializes in ESL and local hospitality industry internships. “We’re extremely sensitive about the Canadian image. We’re really selective about our agents,” says Jeary. But not all colleges are as cautious, and students “have to really look at what they’re getting.” Getting a good measure of B.C. private sector language schools is difficult because most of them are unregistered and unaccredited. The province does play a role, albeit minimal, in the other half of B.C.’s private-sector education industry – the private career colleges. They are registered with the B.C. government’s Private Career Training Institutions Agency (PCTIA). Registration is mandatory and all colleges contribute to a fund covering students’ tuition if a college goes under, as happened with CCT College. Career colleges range from small shops offering $1,000 44-hour courses in a myriad of subjects – tax-return processing, hairdressing, music, driving, cooking – to giant schools such as Sprott-Shaw Community College, which trains 4,500 students a year at 21 campuses in business, computing, tourism and health services. [pagebreak] There are 550 colleges named on the PCTIA list. But for the majority, the fact that they’re on the roster is virtually all that is known about them. Approximately 200 of the career colleges have voluntarily submitted to industry-supervised inspections and standardized teaching accreditation. The accreditation, which can cost $5,000, is necessary if the schools want to offer B.C. government student loans. But foreign students are ineligible for B.C. loans, so many colleges catering to foreign students have no incentive to bring their teaching standards up to accreditation quality. Still, many advertise themselves as “Registered by the PCTIA,” but all that means is that they’ve paid their monthly contribution to the province’s tuition-guarantee fund. We know nothing about the quality of career education in B.C., admits Monica Lust, executive director of the B.C. Career Colleges Association, a promotion and lobbying association of 125 colleges. All except a couple of very small BCCCA members are provincially accredited, which provides “a guarantee of quality” for about 20,000 students a year, says Lust. But even her members have no idea how they compare to other schools and how the industry fares by even the crudest measurements beyond accreditation. “Unfortunately, government cuts over the years have eliminated the measuring capability,” says Lust. The provincial government scrapped a program monitoring the quality of private career colleges three years ago. “We used to have things that helped the industry market its quality. Now we don’t.” More puzzling is the lack of the most simple information about how many students attend B.C. career colleges for how long, taking what specific courses, paying what fee, and how many pass or fail. The government’s college monitoring agency was created to collect tuition fund fees but not statistics, acknowledges agency registrar Jim Wright. “We have only very rough estimates of enrolment across B.C. But there’s no system for weighing it,” says Wright, a former president of Thompson Rivers University. He estimates that at least a third of all the students attending B.C. private career colleges are foreign. Wright knows, but as a policy won’t reveal, the names of two dozen schools suspended or closed by the PCTIA in the last two or three years. Most were small schools that defaulted on their monthly tuition fund payment because they failed to recruit enough new students from offshore to raise the cash. Most of B.C.’s career schools are small and have a niche market, but they morph from one target field to another as new markets emerge, says Wright “Having so little information on the industry – I’m always frustrated by the inability to give numbers, substance – how can we promote the B.C. capability to the world?” asks Wright. Many are calling for the provincial government to reverse its deregulation decision. “As a matter of high priority” it should regulate the private ESL schools with registration and minimum-quality teaching standards, says the premier’s Progress Board advisors. It won’t satisfy many of the secretive, competitive entrepreneurs in the B.C. industry, but it will help convince the watching world they are not all buccaneers. “With a government-supported certification of quality assurance there are ways to overcome the Chinese blacklisting” and wider negative perceptions of B.C., says Kershaw, the industry expert. “Regulation won’t solve everything but it is necessary.” Advanced Education Minister Murray Coell says his preference is “that the private providers police themselves.” But that’s highly unlikely. The small number of CAPLS schools that have created their own accreditation are ignored by most of the industry and get no help from the province or Ottawa’s visa officers, says CAPLS’s Linda Auzins. The picture of a motley, squabbling, government-neglected ESL industry is exactly what overseas students and advisers see when they compare B.C. to alternative destinations such as Australia, the U.K. and the U.S. “The province presents a confused and uncoordinated image to the marketplace,” noted the Progress Board’s report. Australia markets its ESL and career schools to Asia almost as aggressively as it promotes its tourism, with coordinated advertising and information services, immigration officials trained to welcome visa student applications and guaranteed teaching standards and reimbursement of tuition fees if a school goes under. After a decade of dedicated planning and promotion, the U.K. now attracts 50 per cent of the world ESL market with massive industry and government-funded advertising, easy immigration rules, standardized training and a coordinated effort involving the British Council’s dozens of trade promotion offices worldwide. B.C. cannot rely on Ottawa to do the same. Education is a provincial – not federal – responsibility in Canada, notes Lucie Langlois of Industry Canada. Langlois’s department is still trying to get the public colleges and universities to simply agree with the small group of accredited private language schools on common standards and a unified brand, such as ESL Canada, for overseas promotion. But she concedes the public schools and the 70-odd CAPLS schools working together won’t be enough to save Canada’s reputation for ESL. Canada’s global market share now stands at 13 per cent, Langlois adds, and it will slip. The federal government puts up a modest $10,000 matching grant for any college’s brochures and promotion, which is $10,000 more than the B.C. government. But “there’s fairly low awareness of Canada abroad, a direct result of the limited money invested,” says Rodney Briggs, director of the Canadian Education Centres Network, which represents 300 Canadian institutions through information centres in 17 countries. Originally Ottawa-funded and now self-supporting, the Network’s centres are fairly limited in what they can do, says Briggs. He notes that many individual provinces are investing heavily in promoting their international education services, but not B.C. According to the Progress Board, the B.C. government should jumpstart an Edu-BC or similar agency modeled on Tourism BC, to pull together and internationally tout the potential of the province’s education services. “Australia, the U.K., and even Ontario and Quebec have lessons for us” in marketing their international education services, says Auzins. In other words, if B.C. doesn’t pick up the slack, a lot of learning will take place somewhere else – and the province will lose out.