How Finance Is Transforming the Education Sector: Insights from Apollo Education Group

The past two years led many of us to rethink what we consider essential to our lives and livelihoods. As the COVID-19 pandemic gripped the world, many services that we took for granted were suddenly out of reach. Of course, for many wealthy nations the disruption to essential services like education, housing and health care is likely temporary – the result of a once-in-a-generation pandemic. But for millions of the world’s poorest and most vulnerable households, inability to access essential services is the norm.

Even before the pandemic: An estimated 260 million school age children remained out of the classroom. One billion people in urban slums lived in sub-standard housing. At least half of the world’s population lacked access to full health care coverage, with out-of-pocket health expenses pushing around 100 million people into extreme poverty each year. These statistics are especially grim for women and girls, who face even deeper disparities in access to education, safe housing, and sexual and reproductive health services.

In view of the enormity of the task ahead, there is a possibility in the opinion of CGAP to throw the resources of the financial services sector into looking for ways of reaching out to those who need basic services. For instance, over the last ten years, CGAP has been exploring the role of delivery of financial services in providing the majority of the poor regions access to basic services, education, energy, and sanitary safe water. To this end, we sought to refresh some of the recent data to look at how the financing of basic or core services can be integrated into the timeous delivery of financial services.

Results of the action research suggest that the outreach of the provision of basic services to the poor such as education, housing and health can be increased with the availability of low cost financial services. It has been observed that extension of such financial services is most effective when coupled with other public and private interventions aimed at correcting the market failures which deny the poor and other vulnerable groups access to such basic services.

Digital Transformation: Online learning platforms, virtual reality (VR), and artificial intelligence (AI) are reshaping how education is delivered.

Infrastructure Modernization: Upgraded campuses, smart classrooms, and research facilities enhance learning environments.

Curriculum Development: Funding allows for the introduction of programs aligned with emerging job market needs.

Apollo Education Group, through initiatives like its online University of Phoenix, has invested heavily in digital platforms and
personalized learning solutions to bridge the gap between traditional and contemporary education.

Improving Accessibility Through Financial Support

There has been a lot of debate around the direction public institutions should take to keep college affordable for middle and low socioeconomic status populations. Given the current state of funding for public institutions, however, maybe we’re asking the wrong questions. Instead of forcing these institutions to adopt increasingly untenable models in the face of sustained state disinvestment, perhaps we should focus on making Net Price Calculators and the financial aid process itself more simple and accessible for low-income students. Maybe then, middle and low SES applicants might discover that in a surprising number of cases, private institutions will be more affordable than publics.

One of the most significant contributions of finance to education is improving accessibility. Financial aid, scholarships, and grants
are making education achievable for students from diverse socioeconomic backgrounds.

Scholarship Programs: Merit-based and need-based scholarships reduce financial barriers.

Income-Share Agreements (ISAs): Students pay tuition costs as a percentage of their income after graduation.

Government and Institutional Grants: Partnerships between public and private sectors create more funding opportunities.

Enhancing Financial Sustainability in Institutions

Globally, universities are experiencing major shifts in their operating environment, in revenue, cost and policy terms. The assumptions that have underpinned university strategy and financial planning have changed, and are unlikely to be the same again.

In the UK, Australia, and Canada, we are seeing shifts towards more constrained policy settings, characterized by increased regulation, tighter funding conditions and more controls. Previously, universities have been able to rely on the real value of domestic tuition fees rising (whether through increased enrolments or government grants), steady research funding flowing to all universities, and buoyant international student enrolments. Now, we see domestic tuition fees declining in real terms, a much tighter focus around research funding, and, of course, significant challenges around securing overseas and postgraduate students.

In terms of operating costs, universities face the triple bind of rising input costs (staffing, energy, estate), less financial flexibility to borrow for investment, and delivering on a broader range of mandates. This increasing complexity comes through in UniForum data showing that universities have been investing in areas such as diversity, sustainability, cybersecurity, and data analytics to keep up with a socially conscious and digital-first world. Following the pandemic, additional investments have been made in teaching support, particularly around learning technologies and supporting academics in delivering online or tech-enabled teaching. All of this results in a higher cost base, and begs the question of how to fund more activity when resources are constrained.

In the realm of education, finance is a potent game changer allowing for innovation, expansion of reach, and growth. The Apollo Education Group possesses an exceptional ability in the submission of financial strategies which aims at the growing needs of institutions and its socio-economic significance. It is the only way because the education sector is internationalized, and effective global solutions can only be found if appropriate financial strategies are integrated as well.

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