Zsuzsa BÉDA & Mohammed KAOSAR Uddin

The Role of Internationalization in the Sustainability of Private Colleges in the Malaysian Higher Education System

Introduction

The Malaysian higher education landscape has witnessed significant transformations over the past few decades, primarily driven by quality development and internationalization. This strategic direction aims to enhance the global standing and competitiveness of Malaysian institutions (Knight, 2004; Marginson, 2006), which aligns with principle 4 of the UN Sustainable Development Goals on quality education (UN.ORG, 2024). Internationalization in higher education is multifaceted, involving the integration of international, intercultural, and global dimensions into the purpose, functions, and delivery of post-secondary education (De Wit, 2011).

Higher education is critical in supporting education and research, significantly influencing a country's economic competitiveness. With a population of nearly 34 million, Malaysia has transitioned into a middle-income country characterized by a rapidly developing, multi-sector economy. After swiftly recovering from the downturn caused by the Asian financial crisis, Malaysia now boasts one of the highest standards of living in the region, according to the World Bank (2024)

Over the past two decades, the Malaysian government's strategic objectives have led to substantial advancements in its education system, particularly in higher education. These improvements serve as a model for other nations. Malaysia's strategic geographical location, its status as a liberal, multi-ethnic nation, and its dynamic initiatives have established it as an appealing hub for academic studies (EMGS, 2024). The government's strategy for higher education aims to enhance Malaysia's stature in the international education market. However, despite these achievements, the recent pandemic has highlighted the urgent need to stabilize and sustain the higher education sector (MEB, 2015).

Aim of the Study

This study presents a case study on the role of internationalization in the sustainable development of two Malaysian private institutes. It offers a detailed analysis of the structure and dynamics of the Malaysian higher education system. The paper aims to showcase practical approaches to addressing economic sustainability challenges faced by the rapidly evolving and internationalizing private higher education sector. This study provides insights that could benefit other organizations by analyzing and comparing the internationalization practices of emerging institutions with small student populations through the lens of selected partner institutions.

In the first part of our article, we provide a concise and comprehensive overview of the diversified system and current structure of Malaysian higher education, supplemented by figures and data, as well as the government's efforts towards internationalization and development that also impact the private institutions under review. Our analysis primarily draws on the abundant literature, data, and statistics provided by the Ministry of Higher Education and its agencies.

This foundational part sets the stage for the second part of our study, where we explore how enhanced internationalization contributes to more stable operations, supported by data from personal and onsite experiences.

The institutions examined, IHM College and Erican College, are official partner institutions of the University of Nyíregyháza. Given the dynamism and effective management observed in their development, the University is keen to develop these relationships further, establish joint educational programs, and intensify future cooperation with these selected organizations.

Based on the background and purpose of the study, here are three research questions that could guide the investigation into the role of internationalization in the sustainable development of Malaysian private Institutes:

• How has internationalization influenced the economic sustainability of private higher education institutions in Malaysia?

• This question explores the impact of internationalization strategies on the financial stability and growth of private institutes in Malaysia, considering the challenges posed by unexpected global events.

• What specific internationalization practices have contributed to the success of emerging private higher education institutions in Malaysia, and how can other similar institutions adopt these practices?

• This question seeks to identify and analyze effective internationalization strategies employed by successful private universities in Malaysia, emphasizing how these practices can serve as models for other institutions aiming to enhance their global presence and operational stability.

• How have the partnerships between Malaysian private Institutes and international institutions, such as the University of Nyíregyháza, affected the development and execution of their educational programs and institutional growth?

• This question examines the impact of international collaborations on curriculum development, faculty exchange, student mobility, and broader institutional strategies, assessing how these partnerships facilitate mutual growth and international competitiveness.

These research questions are designed to delve into the critical aspects of internationalization within Malaysian higher education and assess its effects on institutional sustainability and strategic development.

The Structure and General Characteristics of Higher Education in Malaysia

The Malaysian higher education system was established in 1959 with the founding of the University of Malaya in Kuala Lumpur (Munusamy & Hashim, 2019). Since its inception, the development of this system has been continuous, primarily driven by the need to meet social demands and enhance economic competitiveness. Globalization, internationalization, and establishing international higher education networks have significantly shaped the system (Morshidi, 2010).

A pivotal moment in the evolution of higher education was the establishment of the independent Ministry of Higher Education (MOHE) in 2004, which marked a rapid sector development phase (Munusamy & Hashim, 2019, p. 23). The MOHE oversees the operation of public higher education institutions and also sets the guidelines for private higher education. (studymalaysia, 2024) The ministry aims to foster scientific and institutional excellence to meet national and global needs (MOHE, 2024). Over the past decades, the higher education sector has been prioritized in the national budget and supported by comprehensive legal regulations, reflecting the government's steadfast commitment to educational advancement.

Key elements of the legal framework regulating higher education include (studymalaysia, 2024):

• The Education Act 1996 (Act 550)

• The Private Higher Educational Institutions Act, 1996 (amended 2009)

• The National Council of Higher Education Act, 1996

• Malaysian Qualifications Agency Act 2007, which replaced the National Accreditation Board Act 1996 (now repealed)

• The Universities and University Colleges (Amendment) Act, 1996 (amended 2009)

• The National Higher Education Fund Corporation Act, 1997 (Amendment 2000)

The Private Higher Educational Institutions Act 1996 (Act 555) is particularly relevant to our study. It governs establishing and upgrading private universities and university colleges, branches of foreign universities, and converting existing private colleges to universities (EMGS, 2024).

In Malaysia, higher education providers are categorized into two main groups: public higher educational institutions and state-funded and private higher educational institutions, as detailed in Table 1.

Table 1. Higher Education Providers

Source: (studymalaysia, 2024)

Table 2. Higher Education Qualification Levels Its Entry Requirements and Duration of Stud

Source: (MQA, 2024)

The SPM (which is equivalent to GCSE 'O' levels) and STPM (which is equivalent to GCE 'A' levels) are the two recognised secondary and post-secondary qualifications.

Current Systems for Measuring and Ranking Performance in Higher Education

In Malaysia, the performance levels of higher education service providers are assessed through a dual rating system:

• SETARA, established in 2009, serves as the Rating System for Higher Education Institutions in Malaysia.

• QUEST, introduced in 2011, is the Malaysian Quality Evaluation System for Private Colleges (EMGS, 2024).

Levels and Providers of Higher Education

Higher education in Malaysia encompasses various levels including higher education certificates, diplomas, undergraduate degrees, and postgraduate degrees. Educational services are provided through a network of colleges, polytechnics, and universities according to Table 1, and Table 2. (EMGS, 2024).

Figure 1. Malaysian Qualification Framework 2nd Edition

Source: (MQA, 2024)

The Results of the Recent Past, the Current Situation, and the Direction of Strategic Development in Malaysian Higher Education

As reflected in the historical data, Malaysia's leadership has long demonstrated a commitment to dynamically developing the education system. In 1957, only 6% of the population had secondary education, but by the 1980s, this figure had risen to 45%, and by 2011, 78% of the relevant age group was enrolled in upper secondary education (MEB, 2015, p. 7). These results are notably superior to those of many developing countries.

The 2010s marked a historic period for higher education participation in Malaysia. According to ministry data, there was significant growth in enrollment rates between 2010 and 2019, with approximately 280,000 diplomas issued annually (WHEC, 2022). Enrollment increased by 16% until 2019, with 1.3 million students participating. However, data also indicate a continuous decline in private higher education enrollment since 2016. (Table 3.)

Currently, the higher education system in Malaysia provides a broad range of courses through an accessible, high-quality, and affordable system. According to recent data, 595 higher education institutions operate, including 20 state universities, 36 polytechnics, and 105 community colleges recognized as state higher education institutions (HEIs). Additionally, there are 404 private higher education institutions (PHEIs) and ten international branch campuses (IBC) (MOHE, 2024).

Critical national plans guide the strategic direction of development. The Shared Prosperity Vision 2030 (SPV, 2030) and the Twelfth Malaysia Plan 2021-2025 outline medium-term objectives, aiming to enhance the quality of higher education and increase the number of highly qualified workers in a competitive economy by supporting sustainable development and social progress (MOHE, 2024). At the policy level, the Malaysia Education Blueprint 2015-2025 (MEB) is a pivotal plan that applies to all higher education institutions in the country. It outlines five key directions for the future development of the education system: access, quality, equity, unity, and efficiency (MEB, 2015, p. 18).

Table 3. The Number of Enrolment in HEIs from 2010 to 2021

Source: (WHEC, 2022 )

Internationalization Goals and Aspirations in Malaysian Higher Education

Today, national higher education policies are primarily focused on achieving international visibility. The strengthening of internationalization processes and the increasing influx of international students are crucial for the success of Malaysia's educational system and its goal of becoming an international education hub.

Although Malaysia's internationalization efforts commenced in the early 1980s, they intensified after the Ministry of Higher Education (MOHE) was established as the governing body. Creating the National Higher Education Strategic Plan 2011 marked a significant step in formalizing these efforts (Munusamy & Hashim, 2019). This plan outlined six core strategies for internationalization: student mobility, staff mobility, academic programs, research and development, governance, and autonomy, including aspects of social integration and cultural engagement (MOHE, 2011).

This initiative aimed to attract 200,000 international students by 2020, positioning Malaysia among the top six global destinations for international students (Mohd et al., 2013). Although this target still needs to be met due to the pandemic, the strategic plan significantly enhanced the international visibility of Malaysia's higher education.

The Malaysian Education Blueprint (MEB) 2015-2025 aims to elevate the Malaysian higher education system to be among the world's best, enabling institutions to thrive in a globalized environment and increase the number of globally ranked universities (MEB, 2015).

International networking is pivotal in bolstering the internationalization of Malaysian higher education. Institutions engage in various international programs, such as twinning arrangements with foreign institutions, primarily from the United Kingdom, Canada, Australia, and the United States (Richards & Ismail, 2013). In these twin-institution programs, students typically spend the first two years of their studies in Malaysia and the final year abroad.

Over the past two decades, the dynamics of student mobility have significantly shifted, transforming Malaysia from a predominantly sending country to a receiving one. While research and knowledge creation has gained new emphasis, the government's policies aim to increase the number of incoming students to boost export earnings. The approaches of public and private sector institutions vary; public institutions benefit from state research resources, whereas private institutions focus more on attracting international students and dynamically increasing their numbers (Tham, 2013).

Economic factors often drive internationalization, as confirmed by Munusamy and Hashim (2019), who noted that income generation, financial sustainability, and economic growth are the predominant factors in the internationalization processes of institutions. Additional sources of income include the establishment of foreign branches in Malaysia, subsidized exchange programs, and foreign research grants.

The relatively low cost of living, high employment rates, job opportunities, vibrant, diverse culture, and safe environment contribute to the increasing attraction of international students to Malaysia. Education Malaysia Global Services (EMGS), an organization under MOHE, reported a significant rise in international student applications for 2022. Although official figures on the number of international students are not provided, various media sources estimate the number to be between 130,000 and 170,000 for 2022. Against an immediate target of 50,000 international student applications for 2022, EMGS received 51,270 applications by the end of December, marking a 27.5% increase from 2021. The primary source countries include China, Indonesia, Bangladesh, India, and Nigeria (ICEF Monitor, 2023).

With the growing number of international students, Malaysia is well on its way to attracting 250,000 international students by 2030 (MEB, 2015).

Sustainability Challenges in the Private Higher Education System in Malaysia

Despite its remarkable success, Malaysia's dynamically developing higher education sector is currently facing multifaceted challenges. (WHEC, 2022). On the one hand, there is a strategic need to upgrade outdated infrastructure and advance in digitalization to improve the quality of education (MEB, 2015). On the other hand, the COVID-19 pandemic has highlighted the vulnerability of a higher education system heavily reliant on internationalization, particularly within the private sector. (Liam, 2022)

The impact of the pandemic is evident in the enrollment figures: the number of registered students dropped to 1,207,131 in 2021, marking a 1.4% decrease from the previous year. (Table 3). The situation in private higher education institutions (PHEIs) is even more pronounced, with enrollments falling from 695,026 in 2016 to 517,580 in 2021, a reduction of nearly 25% (Table 3).

The private higher education sector is crucial in attracting international students to Malaysia, with about 45% of Malaysian tertiary students studying at PHEIs. From 2018 to 2020, the tuition fees from these students contributed approximately RM40 billion to the Malaysian economy (WHEC, 2022). However, most PHEIs operate as for-profit entities primarily funded through tuition fees, making them especially susceptible to external pressures. (Tan, 2015) These institutions have long faced intense competition and significant financial and sustainability challenges (Tan, 2015).

Research indicates that 55% of PHEIs were unprofitable before the pandemic, 44% were technically insolvent, and 64% faced severe debt issues in 2018 (Asia Sentinel, 2020). The onset of the COVID-19 pandemic exacerbated these challenges as international students had to defer enrollments due to the Movement Control Order (MCO).

The number of operational PHEIs has declined: 89 PHEIs ceased operations between 2015 and 2019. 2018 there were still 447 PHEIs, hosting over 666,000 students, including 131,000 international students (Lim, 2022). An additional 16 PHEIs closed during the pandemic (2020-2021), mainly due to financial distress. From more than 600 PHEIs in 2013, only 434 remained by the end of 2021, and this number further decreased to 404 by 2024 (WHEC, 2022; MOHE, 2024).

These trends indicate that the financial difficulties within the sector predate the pandemic. Reports and articles long before the pandemic highlighted the financial struggles faced by PHEIs (Tan, 2015). It suggests that the sustainability challenges of private higher education institutions extend beyond the impacts of COVID-19 and continue to affect the Malaysian higher education system today. These issues are currently under scrutiny by the Ministry of Higher Education (MOHE), which plans and implements several intervention strategies and initiatives to address them (MOHE, 2024).

IHM College

IHM College, located in downtown Kuala Lumpur, is a private higher education institution known for its outstanding infrastructure. Since its establishment in 1993 as In-House Multimedia College, it has aimed to fill the skills gap in multimedia design. With a student population exceeding 500, IHM College offers diploma and certificate programs recognized for their quality.

Leading industry professionals craft the academic programs at IHM to maintain high standards and relevance. These programs emphasize acquiring knowledge, practical skills, and analytical capabilities essential for careers in the digital industry. The college's management is committed to making IHM a top educational institution by offering high-quality, accessible, and affordable education while striving to enhance its international presence.

Between 2012 and 2016, IHM College experienced a continuous and dynamic increase in enrollment, reflecting a broader national trend. In 2014 alone, the number of new students surged by 64%, totaling 432 enrollments. In 2016, enrollments rose by 69% compared to the previous year. However, the COVID-19 pandemic significantly impacted student numbers. In 2021, enrollment dropped to just 18 students, including no international students, due to management challenges and a need for a robust internationalization strategy.

The college's economic and sustainability challenges worsened during the pandemic, casting doubt on its future direction. Despite these obstacles, 2022 saw a remarkable recovery with 134 enrollments, a 7.5-fold increase from the previous year, and in 2023, the college welcomed 210 new students. The majority of international students currently come from Bangladesh.

Table 4 below presents the enrollment figures for IHM College from 2012 to 2023, including the number of international students.

Table 4. The Number of Enrolment students in IHM College from 2012 to 2023

Source: (own source)

Erican College

Erican College, situated in the heart of Kuala Lumpur, is a part of the award-winning Erican Education Group, a comprehensive education provider established in 1990. Over the years, Erican Education Group has assisted more than 300,000 students in acquiring tertiary qualifications and language skills. Today, Erican College offers an extensive range of tertiary programs designed to meet the needs of the competitive modern business world.

Erican College, a private institution, has been awarded a MyQuest 5-Star rating by the Ministry of Higher Education, placing it in the top 5% of colleges. The college has also been recognized as the Best Mid-Sized College for four consecutive years (2016-2019) by the National Association of Private Education Institutions. Notably, the college offers a unique dual-award program, allowing graduates to receive diplomas from Erican College and the prestigious City of Oxford College, UK, thus enhancing their academic and employment opportunities. Additionally, it serves as a Certified Examination Center for the University of Cambridge English Language Assessment.

Enrollment trends at Erican College, as depicted in Table 5, show a continuous increase from 2012 to 2015. However, a decline began in 2016, with a dramatic drop in numbers during 2019 and the pandemic year of 2020, when only 26 students enrolled. The suspension of foreign student admissions from 2018 to 2021 significantly impacted total enrollments, leading to considerable economic challenges due to a loss of income.

In 2022, mirroring efforts seen at IHM College, Erican College revitalized its internationalization efforts, resulting in 281 applicants-twice the number from the previous year, with nearly two-thirds being international students.

The year 2023 marked a historic peak in enrollment, with 633 applicants, including an unprecedented 85% proportion of international students. Of these, 283 came from Bangladesh, 151 from Sri Lanka, and 114 from various other nationalities, making enrollment the most successful year in the college's history.

Table 5: The Number of Enrolment in Erican College from 2012 to 2023

Source: (own source)

Enhancing Sustainability Through Internationalization

Following the prolonged impact of the pandemic, both institutions have redirected their focus toward the international education market. Central to their new strategies is the enhancement of internationalization processes and marketing. The initiation of several targeted activities has proven successful, evidenced by a significant increase in the enrollment of international students, which has inspired further strengthening of these processes.

The trends in enrollment, both increasing and decreasing, correspond with the fluctuations in international student numbers. This correlation is depicted in Figure 2 for IHM College and Figure 3 for Erican College.

Figure 2.: The Number of Enrolment in IHM College Figure 3.: The Number of Enrolment in Erican College

from 2012 to 2023 from 2012 to 2023

Source: (own source) Source: (own source)

Activities to Enhance Internationalization at the Institutions Include:

• Enhanced Recruitment Strategies: Developing a recruitment strategy that includes active participation in international education fairs, collaboration with international schools and recruiters in crucial target regions, and using current and former students as ambassadors to boost international recruitment.

• Creation of an International Marketing Office: Establishment of this office staffed by an international team of experts.

• Marketing and Branding: Launch a digital marketing campaign and create high-quality marketing materials that showcase the institution's unique features, such as industry connections and innovative programs. The materials also highlight the success of international alums and the possibilities of obtaining dual degrees at Erican College.

• Integration Programs: Implementation of comprehensive orientation and ongoing integration programs for international students, which include language support, mentoring by local students, and cultural exchanges to enhance retention and success rates.

• Expansion of Networks and Partnerships: Increasing the attractiveness of the institutions through partnerships with international universities for program development, twinning programs, joint degrees, faculty exchange programs, and research collaborations.

• Organization of Community Events: IHM College hosts international conferences, workshops, seminars, and regular community and sports events, such as weekly badminton sessions and study tours. These events enhance the college profile and provide networking opportunities with international experts, contributing to community building and successful integration.

These strategic elements are designed to make IHM College more appealing to the international education community and to foreign students and faculty, thereby enhancing its global reputation and educational quality. The goals and activities aim to bolster Erican College's position in the international market, improving its ability to attract and retain a diverse and talented student body worldwide.

Both institutions benefit from well-equipped infrastructure, accessible and impressive environments, experienced instructors, and diverse interdisciplinary study programs that meet global standards and real market needs. However, they face challenges such as intense international competition, global economic instability, stricter visa regulations, and a diverse student body with varying needs.

While Erican College enjoys greater brand recognition and offers a unique international dual-award program, IHM College, as a smaller institution, is still developing a broader higher education reputation and brand, which can be a barrier to attracting international students.

The strategic goal for both institutions is to strengthen internationalization further, anticipating future success and a more predictable and sustainable operational trajectory through the expansion of partner and exchange relationships and enhanced international visibility.

Conclusion

Malaysia strives to position itself as a developed state within the region by enhancing its economic competitiveness. (MEB,2015) Over recent decades, successive governments have demonstrated a solid commitment to continuously improving the quality of the higher education and research sectors. (MEB, 2015)

This commitment is supported by substantial state resource allocation to education, the establishment of an independent Ministry of Higher Education, ongoing strategic planning, and a well-regulated structural and legal framework complemented by an interoperable, unified qualifications framework (study Malaysia, 2024). These efforts have contributed to the successes in education and internationalization, propelling Malaysia towards developing a world-class education system.

However, despite these remarkable achievements and ambitious targets, the current dynamics of the higher education system are fragile, and it faces numerous challenges (Tan, 2015). A particularly concerning issue is the sustainability of the private higher education system, which, despite generating significant student numbers and substantial income and being at the forefront of internationalization, has long grappled with sustainability issues-challenges exacerbated by the COVID-19 pandemic. (MEB,2015)

Although small in staff size, the partner institutions of the University of Nyíregyháza display dynamic leadership and have significant future goals. Our case study, based on onsite data collection and firsthand experiences, demonstrates that with effective organization and an expanded and fortified process of internationalization, even private institutions built on solid foundations can achieve stability. Enhancing internationalization could be a viable solution for institutions facing sustainability challenges.

In our study, as specialists in internationalization, we sought to gather and compare exemplary internationalization practices through onsite sampling. Our findings are intended to serve as a model for other smaller educational organizations, illustrating how strategic international engagement can underpin institutional sustainability and growth.

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