Private Education: A Demanding Market Means a Fight for Every Student

If you are considering starting a profitable business, there are certainly more lucrative entrepreneurial ventures than the education sector. Elitist private educational institutions that attract only privileged children of the super-rich, where tuition costs as much as a villa in western Istria with a pool and a private tennis court, where, let’s be honest, only those who can be nothing but agents of social change study because a red carpet awaits them wherever they get employed after graduation, primarily due to status rather than actual knowledge and experience… is a scenario that cannot be written in Croatia.

Private educational institutions in our country are neither so elite nor reserved only for privileged future movers of society. The market is competitive, and the competition is not just among themselves; the public sector is also their competitor, so the market is characterized by a challenging struggle for survival and for every student.

Tuition Fees Are Not Enough

And that market is shrinking. Year by year, we enroll fewer first-graders, fewer high school graduates, and consequently, fewer freshmen enroll in colleges. Both public and private. The demographic collapse on one side and the complete unattractiveness of Croatian studies for foreigners on the other have taken their toll, leaving between 11,000 and 13,000 unfilled places for freshmen in our higher education system each year, primarily in the state higher education system funded by taxpayers’ money.

It is no wonder that in such circumstances, the awards for Entrepreneur of the Year go to the founders of private educational institutions, such as Algebra, given that success in such conditions requires virtuosity. However, this means that for the price of tuition, which ranges from three to seven thousand euros depending on the institution, you must offer your students something they cannot get for free – personalized access and direct access to the labor market, among other things.

This is just one segment of the business story. For a private educational institution to survive in Croatia, it must cover the costs of employee salaries and create conditions for their retention, as there is a shortage of professors and teaching staff in the market. It must finance the costs of licenses, technical equipment, space, material costs, all in a highly regulated sector that requires constant reevaluation and change based on new trends in the market and society.

So, in such circumstances, founders and managers of institutions become creatives. Funding solely from tuition fees is often not enough to cover all these costs, so private schools expand their activities to, for example, organizing courses for lifelong education or other projects for economic entities that can generate revenue.

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Damir Jugo

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– Creating a sustainable, let alone profitable business in higher education in a country with free public education of large quotas relative to the population is an achievement in itself. Many do not know that only six percent of students in Croatia study at private higher education institutions. When we add to this the relatively short Croatian history of private education, with all the accompanying stereotypes and changes in the sector, as well as the purchasing power of citizens, the breadth and structure of the scientific community in relation to the conditions for conducting university-level programs and decision-making processes in the industry, it is a demanding job and it is hard to do successfully without great motivation, sacrifice, flexibility, and grounded expectations – emphasizes Damir Jugo, Dean of the Edward Bernays College of Communication Management.

Only Twenty Years for Success

However, it is not that success is unattainable. The Algebra higher education institution is the only private educational institution in Croatia that, along with the International University Libertas, has made it onto the list of the 1000 largest companies in Croatia, appearing on the list both as Algebra College and as Algebra d.o.o., and has consolidated revenues, at least in 2022, exceeding 19 million euros and profits greater than five million euros. As Algebra’s Dean Mislav Balković says, it took them ‘only’ twenty years for their overnight success.

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– Our growth and development have certainly been influenced by socioeconomic factors, the increase in purchasing power and living standards, but also by the fact that digital transformation has affected all parts of the economy, both private and public sectors, and society, so the need for quality professionals in the fields where we conduct programs is increasing. Today, we have the most participants precisely in the segment of lifelong education, where we conduct a series of accredited adult education programs and special certification seminars for IT professionals with years of experience – emphasizes Balković, adding that as an institution, they are fully aware that a large part of the activities they conduct and for which they charge tuition fees is also conducted by state educational institutions with minimal or no charge to the user, as their services are paid for by taxpayers.

– In such circumstances, we must continuously provide greater value to our students and participants in order to gain and retain their trust, or to even have the opportunity to educate them – explains Balković, noting that this means, and he firmly believes, that Algebra can only grow and develop through the quality and competitiveness of the programs and approaches they have built. Besides content, he adds, he knows that the approach to teaching and the system of values they build in their students is also an important element of overall quality.

And even with so many challenges and obstacles in business, the offers for acquisition are not lacking. Balković says that there have been several very serious offers recently, but currently, Algebra is not interested in attracting potential investors or buyers; instead, they have focused their business on their own growth and investing revenues in the development of new products, services, and capacity expansion.

What experiences do other private educational institutions have and what business premises guide them, what challenges do they face, and what makes them strong and competitive, read in the printed and digital edition of the Lider weekly.