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EduBoston fallout highlights “new market norms” in US high school sector

The shock closure of one high school placement agency in the US, EduBoston, has sent shockwaves throughout the regional high school community on the US northeast coast and in China, where the impacted students were from.

Local MA news channel Worcester News Tonight: the report heard from Bancroft School which had 14 Chinese students impacted

Bancroft School in Massachusetts had 14 students caught up the fallout

As reported in the Boston Globe, the placement company EduBoston abruptly closed on September 30, with many Chinese students at high school in the US finding their fees paid for tuition and housing had not been transferred.

“Had there been more honest communication, perhaps tragedies like EduBoston would not have happened”

Bancroft School in Massachusetts – interviewed for the local US news report – had 14 students caught up the fallout.

Trey Cassidy, head of school, acknowledged there would be “financial challenges” going forward and said the school had meanwhile appointed another company to help manage its Chinese cohort.

Various high schools working with EduBoston will be out of pocket; one to the tune of nearly $800,000 according to reports of a lawsuit filed by Cape Cod Academy.

This latest agency closure is another reminder that the student recruitment landscape into US high schools needs reappraisal: more high schools seek to rely on foreign student income and they are generally all looking in the direction of China.

It also raises questions around the necessity for international students to pay tuition fees into a “blocked account” or for the relevance of a tuition assurance scheme – both such models exist in other markets.

Another US east coast high school, Catholic co-ed Pope John XXIII High School in Everett, MA, actually closed in June this year, citing a US$1.3 million shortfall in its operating budget due to sliding international numbers.

Head of school Carl DiMaiti said the deficit was caused by a Florida company contracted to bring international boarding students failing to maintain its agreement with the school.

The PIE News spoke with John McDonough, CEO of UTP High Schools – a company that embeds staff on campus at US high school partners to offers a full spectrum recruit-and-integrate service to high schools – about the new market norms.

“Student flows from China, the largest market for F-1 private high school students, reached their peak in 2016-2017 at roughly 35,000 students. Since then, this number has declined to roughly 27,000 Chinese students according to SEVIS data,” noted McDonough.

In addition to this slowdown, he added, there have been many changes in the Chinese market including the rise of “international class programs” (guoji ban) as well as the traditional agency model changing drastically.

“All of these factors have affected the way Chinese student flows have changed,” McDonough told The PIE, adding he is unable to comment on other companies’ practices.

“But, what I can say is that there is a clear need for transparency and stricter guidelines,” he said.

He said that the majority of high school administrators in the US have “little to no experience in international recruitment” and thus rely solely on the word of the recruitment company they have contracted for information on how to project student numbers and give advice on how to adjust their school budgets accordingly.

“Had there been more honest communication with school partners about the realities of the market, perhaps tragedies like EduBoston would not have happened.”

McDonough explained that he and his leadership team have taken action to confront the realities of the changing market head-on.

“We acknowledged the fact that the market has changed, not disappeared. China is still by far the largest market for what we do, but it’s necessary to adapt to the new market norms.”

He said that with a more focused effort on servicing partner schools in the most popular study destinations in the US, UTP has experienced growth even in a less robust market.

“There is a clear need for transparency and stricter guidelines”

McDonough added, “There is a certain anxiety in our sector that success is defined by endless YoY growth of student numbers. We need to encourage the idea that success is rather judged on achieving a sustainable balance of having satisfied agents, satisfied school partners, and most importantly satisfied students.

“As long as we as providers of international education keep listening to the market and adapting accordingly we will achieve this fine balance and it will, no doubt, allow us to do what we love for many years to come.”

Meanwhile, according to local news reports, some Chinese students caught up in the EduBoston drama have resorted to crowdfunding, while some schools have agreed to waive tuition fees that have not been recovered.

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