Over the past decade, an almost entirely new for-profit industry has sprung up on campuses across the UK – but few outside the higher education sector will have noticed it.

While the emergence of for-profit universities in England has attracted the attention of the national media, the rapid growth of private study centres that offer international students pre-degree “pathway” courses into higher education has remained below the radar.

Yet thousands of international students now study at these centres, which are run by private, for-profit groups offering courses that often lead to a guaranteed place on a degree course at a partner university.

Some centres are also already teaching international students the entire first year of their undergraduate degree, and it is clear that there is an appetite for growth. One company has suggested that the model could be extended, with universities turning over all of their first-year undergraduate teaching – for home and overseas students – to private firms.

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So who are the providers, how do they operate, and what are the pros and cons of pathway courses? And is there a risk that such partners put their own profits before academic quality?

The five biggest private, for-profit companies offering pathway courses in the UK – Study Group, Kaplan International Colleges, INTO University Partnerships, Navitas and Cambridge Education Group – run study centres all across Britain (see table at bottom of article), many of which are based at university campuses.

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Their rise, which has coincided with huge growth in the number of international students, is remarkable because as recently as 2005 the pathway model was all but unknown in the UK.

The companies say that students who take their courses will enter higher education institutions well prepared for the rigours of the British undergraduate degree, and with better English. Thanks to their networks around the world, they also claim to offer universities access to a huge global recruitment network.

Yet despite the proliferation of pathway colleges in recent years, there appears to have been little detailed research on this growing field.

In 2009-10, 12,657 students entered higher education institutions from a privately run pathway course, according to a survey of 42 institutions cited by Universities UK in a 2011 response to government immigration changes. The numbers going through pathway courses was “clearly” increasing, it said.

According to a report released by the thinktank Centre Forum in the same year, Pathway to Prosperity: Making Student Immigration Work for Universities and the Economy, the “big five” firms make up about half the market. Taken together, these five firms currently teach more than 15,400 pathway students in the UK, according to information provided by the firms to ̽����Ƶ.

Pathway centres’ offerings to international students vary, but most involve a year’s pre-degree study after students have completed 12 years of schooling in their home country. Minimum entry qualifications are usually the equivalent of five GCSEs of at least grade C.

Students enrol on one of a handful of broad courses (for example business, social sciences or science and engineering) relevant to their intended course of study at degree level and receive English language teaching.

If they achieve a certain standard – and according to the firms’ own statistics, the vast majority do – they are usually guaranteed a place on a degree course at the partner university.

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Looking at the glowing recommendations for such programmes from vice-chancellors, the attraction for universities of hosting a pathway centre on campus seems obvious. “The INTO partnership has actually opened a massive seam of international students to come to [the University of] Exeter, from 750 four years ago to 3,500 this year; the INTO partnership is absolutely a core part of that,” Steve Smith, the institution’s vice-chancellor, .

Such courses do not come cheap. At Lancaster University’s International Study Centre, fees for 2014-15 will range from £13,665 per year (for the computing, maths and statistics, and law and social studies route) to £16,005 for the business and management route. At INTO Manchester, students are charged “from £11,995” for the business and humanities year and “from £12,500” for science and engineering, according to the institution’s website.

For those who successfully progress to the first year of a university course, this year of tuition comes on top of universities’ undergraduate fees for overseas students, which averaged £11,289 for students studying classroom-based courses in the 2013-14 academic year.

Andrew Colin founded Study Group in 1990 and then went on to set up INTO in 2005. He says he devised the INTO business model with David Eastwood, who was then the vice-chancellor of the University of East Anglia and is now vice-chancellor of the University of Birmingham, but Eastwood has no financial stake in the business.

For universities, Colin says, pathway firms offer far more than just boosting international student numbers.

“Universities are increasingly reliant on international students for strategic and financial reasons,” he notes. Yet universities’ own efforts to recruit overseas students can be hampered by “modest” budgets, and recruitment may focus on just a handful of countries, Colin argues, adding that this is bad for the student experience because students get less exposure to undergraduates from different cultures. Meanwhile, the university can be left vulnerable to economic or policy shifts. The number of Indian students entering UK universities halved between 2010-11 and 2012-13, for example, which some believe is at least partly linked to the end of the automatic right to work after graduation.

INTO recruits in 68 countries and spends $45 million (£ million) a year on recruitment, Colin says, and “that is beyond the capacity of every single institution”. In this sense, a partnership with a pathway provider is about joining a “global shared service”.

It is also a “no-brainer” that students who spend an extra year on campus preparing for a degree course, and immersed in an English-speaking country, will do well as undergraduates, says Dave Taylor, pro vice-chancellor (international) at the University of Huddersfield, which has a partnership with Study Group. Cohorts coming via the pathway route at Huddersfield tend to achieve a greater proportion of first-class and upper second-class degrees than the cohorts coming directly from their home countries, Taylor says.

“The attraction of Study Group is that its centre is on campus so we can keep an eye on the quality of students and teaching,” says Andrew Atherton, deputy vice-chancellor at Lancaster University, whose pathway centre opened in 2007. “We can pop in for a cup of coffee whenever we need to.”

International students who enter the university directly without having to do a pathway course are generally recruited through an agent, often based thousands of miles away, with whom the university will have a much more “distant” relationship, Atherton points out.

All this helps to explain why the pathway model – pioneered in Australia by Navitas, which was founded in 1994 – has become a “very significant part of the higher education world”, according to James Pitman, Study Group’s managing director for higher education in the UK and Europe.

Despite some of the “big five” experiencing a blip in recruitment in 2011 – possibly due to more demanding English language requirements for student visas brought in by the coalition government – recruitment is now surging.

At Navitas colleges, UK enrolments fell 13 per cent in 2011, but bounced back 15 per cent the following year and then grew by a quarter in 2013. Linda Cowan, managing director of Kaplan International Colleges, says that this year’s enrolments in the UK are up 20 per cent on last year. Over the past three years, numbers at Study Group centres have risen 28 per cent, according to a spokesman.

Indeed, Pitman believes that in the future the majority of the UK’s international students could come via a pathway course. “Even today you get the sense that [university] governing councils are saying ‘why haven’t you got a partnership?’…It’s almost become an accepted model.”

INTO’s Colin is more cautious about future growth in the UK. From 2007 to 2013 “there was something of a land grab” by the pathway providers, he says, and his firm currently has 10 centres partnered with universities. “There’s a natural plateau that we’re not a long way off,” he says of INTO.

Within the higher education sector, the rapid rise of pathway providers has not escaped criticism. Sally Hunt, general secretary of the University and College Union, believes that the pathway providers, as for-profit companies, will put revenue targets before the quality of the education they provide.

Last August, it emerged that the University of Exeter was reviewing the quality of students entering its business school through INTO, she points out. As ̽����Ƶ reported at the time, University of Exeter council minutes stated that: “The quality of these students was now, for the first time, lower than those recruited by the university.” INTO countered that 98 per cent of its students at Exeter had passed its course.

External assessors have also raised concerns about the mechanisms used to assure academics standards at some centres. In September 2012, that found a number of problems with the contracts between Study Group and universities. It said it had “limited confidence” in the firm’s “management of its responsibilities for the academic standards of the awards it offers through its embedded college provision”.

The contracts between Bellerbys Educational Services Ltd (the part of Study Group that runs the centres) and Heriot-Watt University and Lancaster University “did not clearly state which institution…was responsible for the academic standards of each programme”.

At the International Study Centre at the University of Lincoln, the review team found “significant shortcomings” with respect to assessment boards, the treatment of late coursework submissions and the moderation of examination papers.

It found that students had been admitted “before inter-institutional agreements were signed by both parties” at the International Study Centres at the University of Huddersfield and the University of Wales, Newport (its agreement with the latter terminated at the end of 2013).

On the monitoring of student quality, there were a range of practices, the QAA discovered. At some centres there was a “detailed analysis” of the pathway students’ performance measured against other international students when on degree courses. Yet, at others, the evidence was “anecdotal” and at one unnamed study centre there were “no data at all”.

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Yet by December 2012, the QAA had amended its “limited confidence” judgement to “confidence” and said that the problems it found had been “satisfactorily addressed”. In a follow-up visit in 2013, Bellerbys was found to be making “acceptable progress” towards the QAA’s recommendations.

Evidence on whether pathway students do better, worse or about the same as direct-entry international students appears to be patchy. None of the providers was able to provide THE with comprehensive data on the degree class of pathway students across all their centres, although some centres released their individual results.

According to Atherton, Study Group students at Lancaster have, from 2008-09 to 2010-11, performed “slightly better” than direct-entry international students in obtaining first-class or upper second-class degrees.

Kaplan’s Cowan says the performance of the firm’s pathway students is consistent with their direct-entry peers, although in some areas they do slightly better, and in others slightly worse. At INTO Newcastle, half of the undergraduates who progress from pathway courses obtain a first-class or upper second-class degree, says a spokesman for INTO.

But UCU’s Hunt points out that some students may drop out before they graduate, so measuring the proportion that achieve a good degree class may not show the full picture.

While Lancaster’s Atherton acknowledges that “the classic issue you’re going to have with a private company is at a certain point there will be the risk of a trade-off between quality and revenue”, he insists that Study Group takes a “reputational approach” that keeps student standards high.

“If we began to compromise on quality our partnership model would dissolve very quickly,” Pitman argues.

But this argument has not held water in the US, Hunt counters, where a 2012 Senate report was scathingly critical of the quality of education provided by huge for-profit higher education companies.

Kaplan’s US arm “exhibited some of the most serious problems of any company examined by the committee”, according to the report produced by a committee led by Senator Tom Harkin. But it added that the firm had since made “significant reforms”.

Instead of being driven by reputation, Hunt argues, for-profit education firms end up becoming “too big to fail” and amass vast lobbying power to entrench their position.

The problem is particularly acute, she claims, because many of the pathway providers are owned by private equity firms, which may set tough revenue targets for a company before selling it on.

Study Group was bought in 2010 by the US-based Providence Equity Partners for $660 million (£345 million). “Given we’re owned by private equity we have challenging growth targets to achieve,” acknowledges Pitman, but he insists that lowering the quality of teaching provision and/or ability levels of students accepted on to courses would destroy the company’s business model.

In January 2013, INTO sold a 25 per cent stake to the New York-based private equity fund Leeds Equity Partners for £66 million to help fund further growth. But the rest of the firm is still owned by Colin, who says: “I control the company and I know what my values are.”

The private equity stakeholder did not force the company to adopt any new business targets, Colin says, although INTO is now obliged to “work collaboratively with [the stakeholder] to help secure an exit” when it wishes to sell its share.

Why, asks Study Group’s Pitman, shouldn’t universities hand over the teaching of all first-year undergraduates to private providers?

Cambridge Education Group announced in December 2013 that it had been bought by Bridgepoint, another private equity firm. Meanwhile, Navitas is listed on the Australian stock market, while Kaplan is owned by the listed US-based Graham Holdings Company, the former owner of The Washington Post.

Speaking of the International Study Centre on its campus, Huddersfield’s Taylor explains that “nominal recruitment targets” are written into the contract between the university and provider, as well as a student “pass rate target” for the students. Asked whether this creates a conflict of interest for Study Group to pass more students than deserve to, he says: “We trust Study Group implicitly.” The programme taught by Study Group is validated by Huddersfield, he says, and external examiners – chosen by Study Group and approved by the university – monitor the quality of the students’ work.

At Lancaster, Atherton says there are “no quotas” for how many students progress to the university. “It’s perfectly possible that some years we might take far fewer students depending on how that cohort does,” he says.

The ambitions of some pathway providers go far beyond the status quo. Study Group’s Pitman throws down a particularly provocative gauntlet: why, he asks, shouldn’t universities hand over the teaching of all first-year undergraduates to private providers and free up their scholars to focus on second and third years?

He acknowledges that some universities would be “reluctant” to hand over their first year of teaching to a private firm, but argues that Study Group teachers all meet “minimum university qualification standards” and a “good sprinkling” of them have PhDs. “It’s all about specialisation,” he says. “That’s a trend that’s going to continue.”

Indeed, this is already happening for some international students. One fifth of Study Group’s UK pathway students are on programmes that will allow them direct entry to the second year of a degree course.

But if this group of overseas students is taught separately until their second year, isn’t it more difficult for them to integrate? Among the International Study Centre’s cohort, says Huddersfield’s Taylor, are students who “have been elected president of international student societies and also subsequently stood for election to the students’ union, so they are properly integrated and they play a full part in campus life”.

Meanwhile, Kaplan has expanded its pathway model into Japan, China and Kurdistan, which permits students to undertake a year’s study in their own countries. In the case of Japan and China, this comes with the guarantee (if they reach the required standard) of a place at one of the Northern Consortium institutions, a group comprising the universities of Bradford, Huddersfield, Leeds, Leeds Metropolitan, Liverpool, Liverpool John Moores, Manchester, Manchester Metropolitan, Salford, Sheffield and Sheffield Hallam.

This option obviously does not immerse the students in the English language and UK culture, Kaplan’s Cowan admits, but “the upside is that it’s a cheaper route”.

In terms of future expansion, the uncapping of home student numbers after 2015 means that Kaplan’s experience in recruitment “could be applied to UK and EU students”, she suggests, although she adds that such a development is not currently “high up on our agenda”.

As well as offering pathway courses, INTO and Kaplan also provide money for major university capital projects. Kaplan, for example, has spent £70 million on a new 450-bed residential building in Nottingham, which will open this September and “further underpin our partnership with Nottingham Trent University”, according to a spokeswoman – but such partnerships could soon enter a new phase.

“We’re in very advanced discussions for a big faculty building,” Colin says, although an INTO spokesman would not confirm to which university he was referring.

In February, THE reported on a potential venture between the University of Gloucestershire and INTO to jointly run the institution’s business school. It is thought that INTO would provide money for a new building in return for a stake in the department.

The UCU believes that such a move could be the first time that “a university department teaching primarily UK students” faced having a for-profit firm take a substantial stake in its ownership. Some staff have expressed concerns about what a joint venture with a private provider might mean for pay, pensions and conditions.

It remains to be seen whether public-private partnerships of this nature, involving entire university departments, will take off, but pathway providers are nonetheless confident that they see a bright future ahead.

The broader picture, argues INTO’s Colin, is that it is “difficult to see how, globally, demand [for higher education] is going to be satisfied through the public sector”. There is a “supply-side challenge…that’s attractive for investors”. Public-private partnerships will be a “major phenomenon” in this century, he argues, adding: “We’ll wonder how we did without it.” Pitman predicts a “golden age” of private sector involvement in higher education.

Although it is the birth of for-profit universities such as BPP University and the University of Law that has grabbed the headlines and attracted comment, the rise of pathway companies may be just as significant a sign of the for-profit sector’s growing involvement in UK higher education – along with all the opportunities and risks this may entail.

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Map quest: pathway providers’ UK university partners