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HIGHER EDUCATION Foreign degrees at your doorstep There’s been a rise in private foreign education providers in the absence of a regulatory policy. The new UGC rules, awaiting nod, will change it. An alternative to the Foreign Education Providers Bill pending for lack of consensus, it will pave the way for genuine universities. By Aditi Tandon
IF all goes well with a bold new initiative of the government, Indian students coveting foreign degrees would not have to go abroad any longer to realise their dreams. They would get the opportunity to study in top-ranking global universities sitting at home and without having to dish out expensive US dollars to bring back prized academic degrees from foreign lands. That’s the intent behind the new rules in respect of Foreign Educational Institutions (FEIs) which the Ministry of Human Resource Development has drafted towards creating, for the first time, a centralised regulatory mechanism to monitor the entry of foreign players in the booming Indian education market. Less than one-fifth of the estimated 120 million potential students (of college-going age) are enrolled in the existing higher educational institutions in India as against a world average of 26 per cent. Naturally, there are constraints in respect of access to education with the number of existing institutions being much less than required. Governments, both Central and state, do not have the finances to create new institutions given the tight economic situation at home. It is in the backdrop of these realities that the UGC (Establishment and Operation of Campuses of Foreign Educational Institutions) Rules 2013, awaiting the approval of the Law Ministry, need to be seen. Once the Law Ministry nod comes, the Ministry of HRD would have the option of either taking the rules to the Cabinet before the final notification or simply notifying these, exercising the power it enjoys under the University Grants Commission Act of 1956. The rules when rolled would help the government find an alternative to the Foreign Education Providers Bill pending in Parliament for over two years for want of political consensus. There is however a vital difference between what these rules would yield and what the pending law guarantees.
Why the rules The Foreign Educational Institutions Rules will create a legal monitoring mechanism to encourage and monitor the entry of quality foreign universities to India and allow these universities to “only offer foreign degrees” which can then be provided equivalence by the Association of Indian Universities for recognition in India. Also, the rules will allow foreign institutions to set up “only campuses of parent institutions existing abroad”. The pending law in Parliament on the other hand seeks to allow FEIs to set shop as stand-alone institutions in India and award Indian degrees. “Only Parliament has the power to allow FEIs to offer Indian degrees. The UGC rules will only allow them to offer foreign degrees in India,” said a senior HRD Ministry official involved in the drafting of the rules. The rules will for the first time vest in the government the power to protect Indian students from frauds currently rampant in the education sector, where these institutions continue to operate in the name of awarding foreign degrees. “There has been a spurt in the activities of FEIs operating in India in the last decade, more so in the last five years. While some are well-known institutions, many are of a dubious nature resorting to malpractices to attract unsuspecting students who covet foreign degrees. The new draft rules aim to create a regulatory system whereby FEIs would legally enter India and operate here under the existing laws,” mentions a Ministry of HRD note justifying the rules. Enquiries reveal that there has been a consistent increase in the number of private foreign education providers in India because of the absence of a centralised policy to regulate their entry and operation. The Association of Indian Universities, the official body to grant equivalence to foreign degrees in India, said in its recent report that there were 635 FEIs already operating in India in different modes. Of these, only six had sought the permission from the All India Council for Technical Education — apex regulator for private technical education providers — under an existing scheme called “Collaboration and Partnerships between Indian and Foreign Universities/Institutions in the field of Technical Education, Research and Training”. At the other end of the spectrum are cases where hapless Indian students are duped by foreign universities with dubious records. These include the infamous Tri Valley University, California, case where 90 per cent students enrolled were Indians when the campus was closed down in 2010 after US immigration officials found that the college authorities had allegedly produced forged documents to admit foreign students. At another California-based university — Herguan — majority students in the class were Indians when the institution faced allegations in 2012 of misleading the US immigration so that foreign students could get visas. University Canada West, based in British Columbia, attracted Indian students from Punjab in hordes and ran into similar troubles recently, causing anguish to students. The Ministry of External Affairs, which has been involved with securing the interests of Indian students trapped in dubious foreign universities, reportedly has information of some Australian FEIs with Indian students operating from garages. The list is endless and there is no official data on how many Indian students ruin their careers on an annual basis lusting for foreign degrees which a host of often-unscrupulous education agents in India offer. At the root of the problem is the absence of a domestic mechanism to regulate the working of FEIs operating in India on the one hand and encourage potential institutions to establish campuses at home on the other so that the rising Indian demand for foreign degrees is met. The new rules seek to fill this void.
Does Centre have powers? The rules are sought to be notified under the UGC Act 1956, which gives the Centre the power to maintain standards of higher education in India. Entry 66 of List 1 (Union List) of the Constitution vests the powers of coordination and determination of standards in institutions for higher education and research and scientific and technical education with the Centre. In pursuit of this mandate, the Centre created the UGC under the UGC Act in 1956. Section 12 (j) of this Act says the Centre can “perform such other functions as may be prescribed or as may be deemed necessary by the commission for advancing the cause of higher education in India or as may be incidental or conducive to the discharge of the above functions”. Section 25 (k) of the same law allows the Centre to issue rules it considers necessary. Accordingly, the Ministry of HRD has issued the draft rules to regulate the entry and operation of FEIs.
What’s in it for students As the UGC deals only with degree-awarding institutions, the new rules would be limited to FEIs interested in awarding foreign degrees in India. To ensure that Indian students pursuing courses in FEIs are assured returns in the job market, the foreign degrees so provided would be granted equivalence by the Association of Indian Universities. Further, the interested FEIs would only be allowed to set up campuses in India. “The idea is to ensure that the FEI concerned keeps its umbilical cord with the parent university abroad. That would automatically ensure quality education. Also it allows us to have greater control over the operation of FEIs and seek accountability,” said top government officials. Most importantly, not any FEI would be allowed to enter India under these rules. “All FEIs interested to come to India must be ranked in the top 400 institutions in any of the three global rankings brought out by the Times Higher Education, Quacquarelli Symonds (QS) or the Shanghai Jiao Tong University,” the rules state. They also mandate that all FEIs must be accredited back home or by an international accreditation body in case the country of origin does not have an accreditation setup. When the rules were being drafted, questions were raised around the sustainability of FEIs, considering they cannot make profits according to the law of the land. To introduce an element of accountability here, the government has made it mandatory for FEIs eyeing the Indian market to maintain a minimum corpus of Rs 25 crore at all given times and to show documents that prove that the parent institute of the FEI has a 20-year standing. Any contravention of the provisions of the new rules of the UGC Act (providing misleading information or advertisements) would attract a penalty ranging between Rs 50 lakh and Rs 1 crore.
The FDI route Cent per cent FDI in higher education services on automatic route is allowed in India. However, the Supreme Court has clearly ruled that an educational institution in India cannot be a “for-profit” entity. To strike a balance between the two objectives, the government has decided to allow FEIs interested to enter India to come as companies under the Companies Act. “FEIs intending to set up campuses here will be required to create a Section 25 Company under the Companies Act,” the UGC draft rules say. As per the existing law, a Section 25 company can be set up for promoting commerce, arts, science and other such disciplines. A ministry official explains, “Although the Section does not specifically mention education as a purpose, it can safely be inferred that commerce, arts or science can be promoted through the establishment of educational institutions. Also Section 25 provides specifically that any profit generated by the company can be used only for promoting its objectives. Hence the Supreme Court order can also be honoured.” On why FEIs should only come through this route, advisers to the Ministry of HRD say, “Because FDI can only flow in companies; not in societies or trusts”.
Are FEIs interested? During the recent visit of HRD Minister MM Pallam Raju to Boston University (US), its president mentioned his university’s interest in coming to India. Even during the tenure of Kapil Sibal as HRD Minister, several FEIs expressed interest but expressed their unwillingness to come in the absence of a proper framework. It was with this objective in mind that the Foreign Education Providers Bill was drafted when Sibal was at the helm. The Bill is yet to see light of the day. However in the meantime, proposals from FEIs to enter India have been coming. Sources in the ministry said Boston, Yale, Duke, Virginia Tech, Stanford and California Tech Universities had evinced interest. The ministry recently sent some FEI proposals to the Department of Industrial Policy and Promotion (DIPP) and Department of Economic Affairs (DEA) to permit them to open campuses in India as companies under the Companies Act. The move follows positive remarks from the said departments to the new UGC draft rules. Asked why any FEI would come to India as a not-for-profit entity, the ministry explained: “Expansion is an important part of current educational goals for many FEIs which are looking for increased enrolments, presence in the emerging markets and shared faculty development. All top global ranking systems consider enrolment and faculty development as major indicators for growth of an institution. Many FEIs will come for enhanced ratings and for marking a presence in India, where the educational markets of the entire subcontinent converge. In India alone, the population of the youth is set to soar.”
The pressure to increase access to education in India is increasing with the number of eligible college-going students set to double by 2020. Today that number is around 120 million. Central Government institutions in India currently account for just 2.6 per cent of all enrolment in higher education, state institutions make up 38.5 per cent enrolment while private institutions provide for more than half of the enrolment. The proposed UGC rules would expand the market for private players in education through regulation. Also, the government does not have the money required to create the institutions that are required if India has to meet the professed goal of raising its Gross Enrolment Ratio in higher education from the current 18 per cent to 30 per cent by 2020. “Money has to come from somewhere and we must remember the maximum growth of institutions in the 11th Plan period happened in the private sector where there is scope. But even today we have only 14 institutions per 1,000 sq km. This rate was just 10 institutions per 1,000 sq km at the start of the 11th Plan,” an HRD Ministry official said. Given the financial constraints, the Planning Commission had in its vision paper on education for the 12th Plan even advocated a review of the ban on not-for-profit institutions in education. “Not-for-profit status in higher education should perhaps be re-examined for pragmatic considerations to allow the entry of for-profit colleges in select areas with acute shortage,” the document said. Most of all, with the value of the rupee declining vis-à-vis the US dollar, it would make economic sense for Indian students to get their foreign degrees for a fraction of the cost at home rather than pump dollars abroad. For the government, it would make as much sense.
What rules entail
Gone wrong
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A legal monitoring mechanism to encourage entry of quality foreign universities.
90 per cent students enrolled at Tri Valley University, California, were Indians. Campus was closed down in 2010 after US immigration found authorities had produced forged papers to admit foreign students.