Vietnam: local enrolments at foreign schools expected to grow after cap removed

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The international schools market in Vietnam is expected to see a surge in enrolments following the announcement of a draft decree which will uncap local student enrolments at foreign-invested schools.

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The draft decree, which was announced earlier this year, will replace decree 73, which currently enforces a cap on the number of Vietnamese students enrolling at schools below higher education level established through foreign investment.

The cap currently dictates that only 10% of enrolments can be Vietnamese children at primary schools, and 20% at the high school level.

The new draft decree will allow institutions to decide on the ratio of domestic to international students themselves.

“If the government makes the improvements it is planning this will certainly help supply to meet the demand”

Sami Yosef, head of South East Asia research at ISC Research, said that it can be challenging to establish and operate an international school in Vietnam in the existing regulatory climate.

“The country currently ranks 78thin the World Bank Group’s Ease of Doing Business index,” he said. “This, along with the strict restrictions of decree 73, have severely hampered developments for foreign-owned international schools in Vietnam.

“If the government makes the improvements it is planning, including actively supporting education investment, this will certainly help supply to meet the demand.”

The latest ISC market intelligence report for Vietnam shows that growth in the country’s international school market has been relatively slow, restricted by some of the conditions of decree 73.

Between 2011 and 2016, there was an increase in the number of schools from 84 to 109 (29.8%).

The growth is initially expected in student enrolments in the existing foreign-invested institutions, commented Yosef, as spaces will become available for those on waiting lists.

“Then we would expect to see gradual expansion of existing schools and the addition of new foreign-invested international schools, particularly those offering affordable school fees,” he continued.

“Especially if the Vietnamese government takes the expected steps to actively support foreign direct investment in education.”

The decree only applies to those schools which have been set up through foreign investment rather than Vietnamese-owned international schools.

“These schools are in demand but also hard to come by,” Yosef commented.

Vietnam is a growing student source market across many levels of study for top destination countries. But with more Vietnamese students likely to be enrolled at foreign-invested schools due to the removal of the local student quota, there may be more incentives to stay.

“The government is hoping that more K-12 international school options for local families will encourage more to stay in the country”

“The Vietnamese government is hoping that more K-12 international school options for local families in Vietnam will encourage more families to stay in the country, at least until higher education, if not beyond,” said Phan Manh Hung, the attorney supporting the Vietnamese Ministry of Education and Training to draft the new decree.

Yosef added: “It is certainly reasonable to assume that some families who would have otherwise sent their children abroad for pre-university schooling, will choose to keep them at home and send them to a local foreign-invested international school instead.”

Hung said the cap was a barrier to further development of foreign institutions outside of the most-populated cities in the country, Hanoi and Ho Chi Minh City, especially.

The decree also lays out changes for foreign investments in higher educationby increasing required minimal investments to around three times the current amount of 300 billion dong ($13,225).

And lecturers at foreign-invested universities will need to hold a degree at master’s level, with around half also holding a doctorate.

The draft decree is expected to be implemented later this year.

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