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Missteps abroad lead U.S. universities to reassess expansion

For two decades, U.S. universities have raced to build campuses abroad to burnish their reputation and attract foreign students. Now, controversies and stumbles at high-profile projects have led some to reconsider expansion.

Among the setbacks: faculty dissent at New York University and Yale University, construction delays at Duke University’s campus in China and lackluster enrollment at Persian Gulf outposts. Politics in Russia are jeopardizing the success of Massachusetts Institute of Technology’s project in Moscow.

Those experiences, together with the growth of online learning, where a professor in Chicago can easily connect with students in Mumbai, are giving colleges pause, said Ezekiel Emanuel, vice provost for global initiatives at the University of Pennsylvania. Like Harvard, Columbia and Stanford universities, Penn has chosen to establish small study centers in cities like Beijing rather than invest in campuses. Penn is also a partner of free online course provider Coursera Inc.

“We are fundamentally a knowledge institution, we are not fundamentally a real estate institution,” Emanuel said. “In this day and age, the idea that you are going to double down on real estate seems a little nutty.”

There are more than 80 international branches of U.S. universities abroad, an eightfold increase from 1990, according to Jason Lane, an associate professor at the University of Albany in New York, who studies higher education. That growth has slowed as universities better understand the risks involved, he said.

“It’s definitely a maturation in the thought process,” Lane said. “The 2000s were a bit of a Wild West period: everyone was going out and staking their claims. Now colleges are being a bit more thoughtful.”

U.S. universities, particularly ones that are highly ranked, are coveted as partners by foreign countries and often receive subsidies for construction, rent or other costs.

While dozens of campuses have opened without incident, others, particularly in recent years, have been marred by disputes and obstacles.

Duke’s college in Kunshan, China, originally set to open in 2012, has been bogged down by construction setbacks, and is now slated for 2014. Duke also scaled back planned business-school courses after faculty expressed concerns about low demand.

“That was something that made the faculty much more comfortable,” said William Boulding, dean of Duke’s Fuqua School of Business, in Durham, North Carolina. “You don’t want to put the business school or university in a position where you have unrealistic financial expectations.” (Bloomberg)
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