“Private higher education is the ideal sector for investors looking for a generous return”

Following a series of checks carried out in conjunction with the Ministry of Higher Education, an investigation by the Directorate General for Competition, Consumer Affairs and Fraud Prevention has highlighted certain questionable practices on the part of establishments. for-profit private higher education by the end of 2022.

Deceptive marketing practices and anomalies in the application of regulations were observed in a majority of them. At first glance, higher education is the ideal sector for investors looking for a generous return.

First, the cash flow is very advantageous there. Students pay their tuition fees long before the related training costs are incurred. It is all the more interesting thanks to digitalization and the possibility of giving courses online. In this case, the cost of an additional student is almost reduced to zero and the reception capacities are no longer limited by the size of the class.

Opportunism

Second, in the presence of generous public funding mechanisms granted to users and not to institutions, the bill is almost painless for the student at the time of registration. This is particularly the case since the apprenticeship reform in 2018 and the personal training account (CPF) in 2019. Thirdly, given the abundant amount of training available, some students are a bit lost, especially those of the first generation in lack of benchmarks in higher education.

Preferring to invest in their core business, ie training and research, public and private non-profit establishments can easily compete in this segment of the market. In the absence of barriers to entry, marketing campaigns tailored to this target audience accompanied by measures to relieve bureaucratic stress at the time of registration can make this market very attractive to potential shareholders.

Despite this financial potential, the presence of this type of private, for-profit higher education institutions is limited, at least in developed countries. Anxious to satisfy their shareholders, these institutions are encouraged to take advantage of the poor quality of information available to certain students concerning the courses offered. Consequently, private for-profit establishments will have little incentive to invest in quality training. This is particularly the case for long-term training and training in very diverse skills that will only make sense during a professional career.

You have 37.9% of this article left to read. The following is for subscribers only.