Monday, 2 January 2023

What to expect in education in 2023

What’s to come in education in 2023? Rising inflation, EGP devaluation and the subsequent cost pressures faced by schools will continue to dominate administrators’ concerns well into 2023. Much like 2022, this year we’ll likely see schools and universities putting expansion plans on pause and cutting costs wherever possible as they brace for worsening economic headwinds.

Inflation and devaluation are the name of the game: By far the biggest concern keeping school administrators up at night as we head into the new year are macroeconomic conditions and the looming threat of further EGP devaluation. “There’s a lot of headlines of uncertainty. Number one is inflation,” El Alsson Executive Director Karim Rogers tells us.

Cost-cutting measures are becoming crucial to get by: “I’m buying chemicals and toilet paper and cleaning supplies in bulk and storing them. Non-essentials like purchasing laptops for a new lab next year will be put on hold,” Rogers says. Similarly, Eduhive schools are “deploying very aggressive cost-cutting measures” like reducing administrative staff, combining departments, and trying to boost the number of seats in classrooms, EduHive CEO and BCCIS Chairman Karim Mostafa explained.

But for the most part, curriculums will remain unchanged: “I can’t touch anything to do with education, because that touches quality,” Mostafa says. The quality of the education won’t be affected much, but schools might reduce certain activities like retreats and international travel, explains Ahmed Tolba, Professor of Marketing and Chair of the Department of Management at AUC.

The same is true at the university level: At AUC, academic priorities will be guided by the university’s strategic plans — which include topics like environmental sustainability — and are expected to remain immune from inflationary pressures, Tolba explains.

When it comes to priorities among existing students, things look like they’ll remain stable: “I don’t think existing students are necessarily changing their minds about majors. Maybe some might put off adding a minor. Maybe some might take on extra credits to speed up their graduation date,” Tolba tells us.

Expansion plans are going on hold for now: There’s almost unanimous agreement among insiders we’ve spoken to that expansion plans are off the table for quite some time. “Any kind of construction and expansion is on pause for the foreseeable future for most schools. Those who had plans to open their doors in 2023 need to work on a faster schedule to avoid fluctuations in prices — even then they won’t recoup their costs, they’ll just be cutting losses,” Rogers tells us. Eduhive schools are also putting construction plans on hold, according to Mostafa.

Some schools are pushing for tuition cap increases: “We have to increase tuition fees. We’re now in negotiation with the ministry to try to increase our tuition beyond the 7% cap,” Mostafa says. For AUC, tuition prices are in fact already rising.

But those dreams might not materialize for a while: Although many administrators agree that the 7% cap on tuition increases won’t sufficiently cover the rising costs they’re up against, some see getting approval for a bump on that cap to be an unrealistic goal in the near future.“No one can talk about raising tuition right now. No one would dare go to the education ministry and request a raise in tuition rates. It’s a question of national security. We saw the same problem in 2016 and the ministry said no way,” Rogers tells us.

More flexible tuition payments will continue to be necessary accommodations for parents: More forgiving tuition payment plans will become an indispensable part of supporting students and their families in the coming year. AUC will be “setting aside a special financial aid budget to absorb the pressure from tuition increases. When it comes to new students, there will be more scholarships made available to support top students,” Tolba tells us. For Eduhive schools, one solution might come from negotiating favorable repayment terms with companies like ValU to help parents make good on tuition.

Schools are increasingly at risk of losing out on talent to the GCC: Several school administrators we spoke to have noted that the Gulf is becoming an increasingly attractive location for teachers from North America and Europe. “Our main competitors are in the GCC,” Mostafa says. “Those who leave are probably going to be lured by the GCC,” Rogers told us, owing primarily to the fact that they will likely receive better offers — or at least ones that keep pace with inflation. “Even if we give raises, come March and there’s more turbulence, it won’t cover expenses,” Rogers says.

But Egypt still has an edge for some foreign teachers: “I think foreign teachers who have been in Egypt for a long time will stay,” Rogers tells us. “I think we have an edge over the GCC for two reasons: Living expenses are a fraction of what they are over there. Which means they can save much more. The weather is also a huge factor. You’d be surprised how significant it is,” Mostafa explains.

Parents will be opting for more budget friendly alternatives in the coming year: Since 2016 there’s been a gradual increase in demand for more quality budget schools among parents, according to several sources we spoke to. “Parents who were paying 200k want to pay 120k and those who were paying 120k want to pay 80k,” Mostafa says.

At the university level a similar change has been unfolding: “Students who might have been looking at AUC as their target might opt for a less expensive university,” Tolba says. Meanwhile, students who might have otherwise been gunning for enrollment at foreign universities might start scaling down their search to target local schools that are now cheaper by comparison, Tolba explained.

Some M&A activity could also be on the table: “I think we’re going to see bigger names coming from the Gulf acquiring a bunch of schools and putting them under a big company,” Mostafa tells us.

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