Education industry expected to remain positive this year

PETALING JAYA: Meg Tan, who has always dreamt of studying overseas, has had her dreams dashed by the current economic downturn.

After completing her Cambridge A-levels in a local private university college, she was looking forward to pursuing an accounting and finance degree in Britain.

Her parents, however, have decided for her to continue her studies locally instead – via a twinning or an external degree programme – to save costs.

“It is the prudent thing to do. We do not know how long the economic downturn will last and whether our jobs will be affected. We can always send her overseas for her last year if finances permit.

“The degree programmes in the private colleges here are pretty flexible in this aspect and our financial burden will be eased substantially as we save more than half of what we need to spend if we send her to Britain,” says Meg’s father Paul Tan.

With more families tightening their purse strings and letting their children study locally rather than abroad to save costs, the outlook for the private higher education industry is expected to remain positive this year, say industry players.

The Malaysian Association of Private Colleges and Universities (Macpu) executive secretary Ko Kim Hooi says the current economic downturn can be an incentive for students to look at twinning and external programmes as cheaper alternatives.

“The education industry is seen as a recession-proof industry as education is a necessity, so the outlook is still good for us.

“During the 1997/98 financial crisis, the local private higher education industry came up with various twinning programmes to help students save costs and this move boosted business as well,” he tells StarBiz.

Ko says more students studying locally will also help the country save on foreign exchange.

According to Monash University Sunway Campus pro vice-chancellor and president (Malaysia) Prof Robin Pollard, the university is showing above-normal application rates.

An artist's impression of Taylor's University College Lakeside campus

“So it appears as though some people prefer to study at home rather than face an uncertain future with higher cost commitments by going overseas,” he says.

Some may also decide to further their education rather than enter an uncertain job market, thus leading to a rise in enrolment even in a declining economy, adds Pollard.

“Of course, the hope is that when the economy improves, the additional learning will lead to benefits,” he says.

Moreover, most parents would have set aside education funds for their children since birth as education is an investment for the future.

“Most in the affluent market who can afford to send their children overseas, would have pre-planned and allocated money for their children’s education,” says Taylor’s University College vice-chancellor Professor Hassan Said.

He adds that Taylor’s has a strong line-up of new programmes in the pipeline for students, in addition to its own degrees such as engineering and architecture.

Taylor’s, which is one of the largest pre-university centres in Malaysia, providing British, Australian and Canadian education. has about 10,500 students this year, of which 18% to 20% are foreigners.

Vinayaka Missions University pro-chancellor Dr S. Sharavanan believes it is unlikely the economic slowdown will affect the higher education scenario, especially for bigger institutions offering professional programmes.

“As an investor, we see long-term prospects in the education sector in Malaysia beyond the current and anticipated economic slowdown,” he says.

An additional advantage of the economic slowdown can be an influx of foreign students into the country as Malaysia is seen as a relatively cheaper education hub compared with Britain, Australia and Singapore.

Currently, Malaysia has some 63,000 foreign students.

Very few education providers are listed on the local stock exchange. They are HELP International Corp Bhd, SEG International Bhd (SEGi) and Stamford College Bhd.

HELP International scored top marks for the financial year ended Oct 31, 2008 (FY08) with net profit jumping 22% to RM11.8mil compared with FY07.

SEGi’s financials also showed a marked improvement as net profit doubled to RM6.98mil for the nine months ended Sept 30 versus the previous corresponding period. Earnings were boosted by a gain from the disposal of a property in Kota Damansara, Selangor.

The Star-Elaine Ang