Vietnam Hangs Out the Welcome Sign for International Schools

 

IEM SPOTLIGHT NEWSLETTER, VOL. 16, Fall ISSUE - November 2018

By: Mark Ashwill, Capstone Vietnam

Economic Growth in Vietnam

Vietnam has been opening its doors to the international community and pursuing global economic integration at breakneck speed in recent years. It has one of the fastest growing economies in the world, to the benefit of much of its population. This benefit is reflected not only in how people live, but their well-documented optimism—economic and otherwise. While the rising tide of prosperity has not lifted all boats, the standard of living for the majority of Vietnamese citizens is markedly better than it was even a decade ago.

Even as the United States engages in a trade war with China, which has weakened the local currency somewhat, Vietnam continues to forge ahead. One reason is that many investors see the advantages of shifting their operations to Indonesia, the Philippines, or Vietnam (Raslan 2018). With a young workforce and lower labor costs than many other countries, Vietnam has been the most successful in attracting foreign direct investment (FDI). From January to August 2018, $11.25 billion of FDI flowed into Vietnam, a 9.2 percent year over year increase (Singapore Business Review 2018).

In addition, Vietnam ranked first in the world in wealth generation from 2007 to 2017, with a 210 percent increase, and is the third fastest growing country in the world in terms of percentage of ultra-high net worth individuals (UHNW)— behind Bangladesh and China—with a compound annual growth rate of 12.7 percent. UHNW individuals are those with $30 million or more in investable assets, excluding personal assets such as primary residence, collectibles, and consumer durables (Nguyen 2018). This is admittedly a select group, but aside from UHNW individuals, there are many Vietnamese –12,000 in 2016 – who have a net worth of more than $1 million and even more who have not reached that financial milestone but are wealthy by local standards and optimistic about their economic futures (Ahn 2016).

The Connection Between Economic Growth and Education: Enter Decree 86

What does all of this have to do with international schools? Everything. It is this rapidly growing ability to pay that allows more parents to send their children to international schools and overseas study.

International schools in Vietnam offer an array of academic programs based on various national educational systems, including those of Australia, France, the United Kingdom, and the United States. In addition to educating Vietnamese students, these schools enroll expat children from various countries. Large concentrations of Korean children at some schools, for example, are reflections of the fact that there are many Korean expats living and working in those parts of Vietnam.

Curricula include Cambridge IGCSE and the Cambridge International AS and A Levels, the IB Diploma Program, and dual diploma options, such as Vietnam and the U.S. or Canada. One school offers a Global Assessment Certificate, which is a university preparation and foundational studies program that provides students whose native language is not English with academic knowledge and skills to prepare them for Western-style higher education study.

Demand has been building for a number of years and a recent Vietnamese government decree, Decree 86, makes it possible for more Vietnamese children than ever to attend international schools. In short, the new decree is good news for Vietnamese parents, students, and investors, both local and foreign.

Decree No. 86/2018/ND-CP, which replaces Decree 73 and went into effect on August 1, 2018, regulates foreign investment and cooperation in Vietnam’s education sector. The following types of institutions may be established:

  • Short-term training institutions
  • Preschools
  • Primary and secondary schools
  • Higher education institutions
  • Branch campuses of foreign-invested higher education establishments in Vietnam

Significantly, foreign education programs offered by international schools must be accredited by recognized authorities in their home countries. This stipulation is likely in direct response to a spring 2018 scandal involving a “U.S. school” that had partnerships with many Vietnamese schools to offer a U.S. high school program. However, it was what is described in the Vietnamese media as a “ghost school” without any official approval or accreditation by any authority, in this case U.S. authority.

A Comparison of the Decrees

The main reason why international schools in Vietnam are so popular is the widespread perception that the quality of their education and training is superior to that of public schools, and that the former do a better job of helping young people realize their potentials, academic and otherwise. They generally have better facilities and offer ancillary services, such as college counseling, that local schools are not yet in financial positions to offer. Many of international school graduates study overseas and students hope that these schools will better prepare them.

Specifically, local students may now comprise up to 50 percent of an international school's total enrollment. Under the old decree (73), the percentages of Vietnamese primary and secondary students in international schools were limited to 10 percent and 20 percent, respectively.

One of the provisions that has been removed from the old decree states that Vietnamese students under 5 years old could not be admitted to foreign programs. Under Decree 86, foreign-invested kindergartens using a foreign education program are permitted to enroll Vietnamese students.

Several of the provisions remain unchanged, such as one about curriculum requirements: “Educational programs must not go against the national security and public interests of Vietnam, (b) must not spread religion and distort history, (c) must not negatively affect the cultures, ethics, and traditional customs of Vietnam, and (d) must ensure the connection between all the levels and grades.” Other provisions that remain the same relate to class size, minimum investment capital, exclusion of foreign-invested universities, and requirements for teachers.

Kindergartens are still required to maintain minimum investment capital of 30 million Vietnamese Dong (VND) ($1,285) per full-time student, while the minimum investment capital per full-time student at primary, secondary, and high schools is 50 million VND ($2,141), excluding land costs. For land costs, total minimum capital is calculated based on anticipated maximum capacity, for example, not less than 50 billion VND ($2,141,465). The minimum amount for schools that lease their facilities from a third party is 70 percent of that amount.

Foreign-invested universities must have minimum investment capital of 1 trillion VND ($42.83 million), not including the value of the land on which the campus is built. Branch campuses require investment capital of at least 250 billion VND ($10.70 million).

Regarding teacher requirements, the teacher-student ratio for kindergartens must be 5 to 12 children per teacher, depending on the level, and the teacher must hold at least a college (three-year) degree in early childhood education. For primary, secondary, and high schools, that number should not exceed 2.25, 1.95, and 1.5 teachers per class, respectively, and teachers must hold at least a BA degree in the relevant discipline. Class sizes are not to exceed 15 to 35 students at the kindergarten level (depending on their age), 30 students in primary school, and 35 students at the secondary and high school levels.

Two additional key components are related to foreign language centers that administer recognized proficiency exams, such as IELTS and JLPT, and education partnerships. Decree 86 includes guidelines and conditions related to granting certificates, subjects, location, facilities, approval procedures, and staff employed by such organizations. Kindergartens and schools may enter into relationships with accredited foreign educational institutions. The integrated curriculum must be approved by the Vietnamese government, which will also issue specific guidelines on the integration of foreign and domestic courses. Graduates must receive certificates, which should be valid for both Vietnam and the foreign country. Such programs will be valid only for a period of 5 years with the option to renew for another 5 years.

A Closer Look at International Schools

International schools are sprouting up everywhere, including well beyond the borders of the country’s two wealthiest and largest population centers, Hanoi and Ho Chi Minh City (HCMC). There are also international schools in Danang, Haiphong, Nha Trang, and Vung Tau, among many other places. While some schools are nonprofit entities, most are for-profit corporations backed by local and foreign investors who see double-digit annual revenue growth potential.

For example, the International Integration Education—iSchool System (iSchool), which was established in 2008 and has 12 locations, is a member of the Nguyen Hoang Group. KinderWorld International Group, which was founded in 1986 in Singapore and “believes in offering a combination of Eastern values with an International outlook on education,” operates the largest network of international schools in Vietnam, with 15 campuses in cities in all three regions of the country.

One challenge for many international high schools is retention, especially among Vietnamese students. Many parents send their children to study at an international boarding or day school starting in grades 10 or 11.

Below is a partial list of international schools in Hanoi and HCMC, including the name of the school, its website, and tuition per academic year, if it appears on the school’s website. Note that there are other fees that parents are required to pay, such as those for school uniforms (where applicable), transportation, and meals. All tuition fees are for 2018–2019, unless otherwise indicated. High school tuition, mainly for grades 11 to 13, ranges from $7,044 to just over $30,000 per academic year. In fact, the total cost of attending many day or boarding schools in the United States is not that different from what parents are paying in Vietnam just for tuition.

Hanoi

Ho Chi Minh City (HCMC)

International Schools and Overseas Student Recruitment

International schools are the path of least resistance for colleagues who want to promote their institutions to overseas-bound students. For example, they tend to have guidance counselors who are fluent in English, which facilitates communication, and there is little to no bureaucratic red tape associated with arranging visits.

Access to Vietnamese schools is more problematic, in some cities more so than in others because of local rules and regulations. Foreigners need a permit and schools have been inundated with requests from colleagues and education companies, all of whom are promoting institutions and programs.

Since the schools’ primary mission is education, outside visits are a much lower priority in terms of staff resources and valuable teaching time. Unless a representative knows someone at a particular school, it is difficult to simply send an email to someone and expect a positive outcome, yet alone a response.

While it is worth visiting selected international schools, and there will be many more to visit in the coming years, do not put too many outreach eggs in the international school basket simply because they are easier to access—especially after determining that there is a fit between what an institution offers and what students are looking for (e.g., many welcome the more selective schools). The current reality is that most of the students in Vietnam who are planning to study overseas are enrolled in local public and private schools.

The Power of Competition

The increased competition will make more international schools accessible to middle class families and could very well have a positive affect on Vietnamese schools. With more choices available for parents and students than ever before, international schools will have to be at the top of their games in terms of curricula, teaching staff, facilities, ancillary services, and reputation in order to be successful in the long-term. It is likely to become a “buyer's market” to the benefit of parents and students.

International schooling was already a hot sector before Decree 86 was announced. Marcel Van Miert, executive chairman of the Vietnam Australia International School (VAS) in HCMC, was quoted as saying that VAS has had an annual growth rate of 20 percent in recent years (Chi 2018), which explains in part investors’ interest in international schools. Decree 86 will only serve to accelerate this trend until the pent-up demand has been met. Some observers have advised the government to hasten the process by offering tax exemptions and land use incentives.

The Vietnamese government is keen on attracting more FDI and expanding educational opportunities for its young people. Decree 86 covers both bases. In the spirit of giving credit where credit’s due, it is an example of good governance, a smart and timely decision that will pay off in the long-term for both individuals and society.


References and Additional Resources

Ahn, Vuong Duc. 2016. “Vietnam Has Over 12,000 USD Millionaires: Wealth Report.” VN Express International. https://e.vnexpress.net/news/business/vietnam-has-over-12-000-usd-millionaires-wealth-report-3395913.html.

Chi, Mai. 2018. “New Decree Paves Way for Boom of International Schools in Vietnam.” Vietnam.net. https://english.vietnamnet.vn/fms/education/206642/new-decree-paves-way-for-boom-of-international-schools-in-vietnam.html.

Nguyen, Dat. 2018. “In Vietnam, the Rich are Getting Richer at a Fast Clip.” VN Express International. https://e.vnexpress.net/news/business/data-speaks/in-vietnam-the-rich-are-getting-richer-at-a-fast-clip-3804294.html.

Raslan, Karim. 2018. “China’s Loss in Trump’s Trade War is ASEAN’s Gain. Look at Vietnam.” South China Morning Post. https://www.scmp.com/week-asia/economics/article/2164280/chinas-loss-trumps-trade-war-aseans-gain-look-vietnam.

Singapore Business Review. 2018. “Vietnam’s FDI up 9.2% to US$11.25b in August.” Singapore Business Review. https://sbr.com.sg/economy/asia/vietnams-fdi-92-us1125b-in-august.


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