By Aisha Labi

Rapid recent growth in the number of private higher-education providers in Britain offers potential threats as well as opportunities for the predominantly public sector, according to a new report published on Thursday by Universities UK, an association of vice chancellors.

The report, "The Growth of Private and For-Profit Higher-Education Providers in the UK," was commissioned by the vice chancellors' organization and was released to coincide with a one-day conference in London.

Although private higher education accounts for 30 percent of global enrollment and has become widespread in Poland and other Central and Eastern European countries, publicly subsidized higher education is still the norm for most of Europe.

The only private institution in Britain that has been awarded the title of university is the University of Buckingham, a nonprofit institution where tuition for foreign undergraduates, who compose a majority of the enrollment, is $43,000 a year.

The four private providers that have been granted degree-awarding power in Britain include BPP Ltd., which was taken over last year by the Apollo Group, the American parent company of the University of Phoenix, a for-profit giant. (The other three private providers are nonprofit.)

Apollo's acquisition of Britain's only for-profit provider with the power to award British degrees "has sent a signal to its large American counterparts that the UK market is worth watching," the report notes. Apollo and other for-profit education companies have weathered the recession better than many other sectors, the report says, and "student numbers and profitability are growing."

The report argues that because the British government is reviewing the domestic undergraduate-tuition cap of $4,500 at British universities, "it is a reasonable assumption that, were the fees cap to be lifted after 2010, more of the large American educational corporations would be interested in the UK as a market, although it is relatively small by comparison with the United States, China, or India, for example."

Several of those providers have already expanded internationally. Apollo has a University of Phoenix campus in the Netherlands. Laureate Education operates both campus-based universities and online programs in several countries, including France, Germany, Spain, and Turkey.

Kaplan owns Holborn College, a London institution with an overwhelmingly international enrollment that offers degrees validated by the University of Wales. Kaplan recently restructured its business, creating a Europe division for its British operations, and has joined GuildHE, an organization of higher-education institutions, "in order to become well informed about sectorwide developments and to participate in lobbying the government on the new visa and immigration arrangements."

The private sector in Britain is evolving rapidly, and part of the difficulty in tracking its progress is simply determining how to classify institutions, the report notes. The difference between nonprofit and for-profit institutions "no longer seems to be a relevant distinction" because most public universities in Britain are expected to make money "in order to finance expansion and capital investment."

The separation between private providers and public universities has blurred, for example. The report notes the advent of "small private colleges targeting international students and accredited by UK universities to offer their awards." The number of such institutions is increasing rapidly, and their growth could well "pose a competitive threat to some categories of university, since they could be taking some of their market share of international students," the report says.

Britain's public universities are encouraged to exercise vigilance about forming partnerships with private providers, to ensure "the quality of what is being delivered in your name" and to be certain that the prices those partners are charging do not pose a competitive threat to the institutions themselves. The authors also encourage the government to help clarify the complex legal landscape surrounding private higher-education providers.