The New York Times recently printed this article about the increasing number of US universities that opened in Dubai, UAE and are struggling as a result of the financial crisis.

Readers, how is the economy impacting international education in your region?  Please comment with specific examples of what is not being covered in mainstream media.

December 28, 2009

University Branches in Dubai Are Struggling

By TAMAR LEWIN

The collapse of Dubai’s overheated economy has left the outposts of Michigan State University and the Rochester Institute of Technology in the United Arab Emirates struggling to attract enough qualified students to survive.

In the last five years, many American universities have rushed to open branches in the Persian Gulf, attracted by the combination of oil wealth and the area’s strong desire for help in creating a higher-education infrastructure. Education City in Qatar has brought in Carnegie Mellon, Cornell, Georgetown, Northwestern, Texas A&M and Virginia Commonwealth.

Abu Dhabi, one of the seven emirates that make up the U.A.E. and the one that controls most of its oil, is still flourishing. And it is still generous in its support for the most ambitious American educational effort in the area, New York University’s liberal-arts college, which is scheduled to open there next fall with a highly selective class of 100 young students from around the world.

In Dubai, however, the timing for Michigan State and the Rochester Institute of Technology could hardly have been worse. Both started classes in August 2008, just before Dubai’s economy began to crumble. By this month, Dubai’s debt problems were so serious that Dubai World, a government-owned investment company, avoided a bond default only with a $10 billion bailout from Abu Dhabi.

Because most Dubai residents are expatriates, thousands of them left when their jobs disappeared, and the prospective college-student pool in the area has shrunk substantially. “Nobody could have anticipated the global meltdown, which has certainly had a negative effect on our student marketing,” said Brendan Mullan, executive director of Michigan State Dubai.

Michigan State, with only 85 undergraduates, is seeking to raise that figure with a scholarship offering half-price tuition to the first 100 qualified transfer applicants for the semester that starts next month.

“We’ve had close to 200 transfer applications, some from other universities in the U.A.E., but others from India, Pakistan, Saudi Arabia and Oman,” Dr. Mullan said. “We are not compromising on quality, even if that means it takes us longer to gain traction here. We actually turned down 30 percent of our applicants last fall.”

Dr. Mullan said that while the break-even point for the campus was now expected to be five years, up from the original goal of three years, Michigan State was determined to remain in the Gulf.

“We still believe this is viable and valuable,” he said. “We’re not just going to be a teaching storefront here; we’re going to have significant research capacity, and our commitment to Dubai is unyielding.”

Rochester, which began only with graduate programs, accepted almost 100 students for this academic year. But Mustafa Abushagur, president of the Dubai campus, said it ended up with only about 50, spread among electrical engineering, computer networking, finance, and service and leadership studies. Rochester plans to start an undergraduate program next year, Dr. Abushagur said.

“Our plan for next year is 100 to 120 students,” he said, “which we think we can get, because we’ve studied the market very closely and we believe that as an institution, we can distinguish ourselves in certain programs that are in demand here.”

George Mason, one of the first American universities to open a branch in the United Arab Emirates, closed its Ras al Khaymah temporary campus in May, having never graduated a single student.

While the higher-education projects in Dubai face serious challenges, New York University’s plans in Abu Dhabi are moving ahead smoothly, with Abu Dhabi even going so far as to fly in top high school seniors from around the world for two days of meetings with those at the university.

“We’ve had a worldwide recruiting effort, identifying top candidates at high schools around the world,” said Linda Mills, the N.Y.U. senior vice provost overseeing the Abu Dhabi admissions process.

The cost of attending for a year, with tuition and travel and living expenses, is about $63,000, but Ms. Mills said students would get enough financial aid that no student would have to graduate with debt.

“We looked at the leading universities around the world,” Ms. Mills said, “and what we’re offering is on a par with Swarthmore, which I think offers the most generous financial aid.”

In fact, the head of the new Abu Dhabi campus is Alfred H. Bloom, the former president of Swarthmore, which has need-blind admissions, meets full financial need and, as of last year, replaced the loans in financial-aid packages with larger scholarships.

The admissions timetable has been somewhat different for the Abu Dhabi campus than the Greenwich Village one, with early-decision candidates having until Jan. 15 to accept a spot in the Gulf, and not expected to commit to Abu Dhabi without a visit.

Already, N.Y.U. has had more than 500 early-decision applicants for next year’s inaugural class, and has admitted students from Australia, Brazil, Britain, China, Ethiopia, Hungary, India, Indonesia, Jordan, Morocco, Russia and Taiwan. About 100 have already been flown to Abu Dhabi for a visit.

“Everyone introduced themselves, in English and whatever language they wanted,” Ms. Mills said. “From French to Russian to Arabic to Hungarian, they’d say things like ‘I traveled 30 hours to get here,’ or ‘I’ve never been on a plane before.’ It was kind of a goose-bump moment.”