Learning Curve

When Virginia tech got the opportunity to sign on to construct a campus in southern India, the American university jumped at the chance. "If the opportunity comes quickly and you don't grab it, you'll miss it," says S.K. De Datta, head of Virginia Tech's India venture. The university — founded as an agricultural and mechanical college in Blacksburg, Va., in 1872 — devised a budget, acquired land and planned the square footage for its new home. The only thing left to do is wait for India to give it the green light. That could take, oh, four years? "Will it happen quickly? I don't know. You have to have enormous patience and perseverance to succeed in India," De Datta says. (See pictures of American colleges setting up shop in India.)

For many American universities, India may be worth the wait. But will it be worth the trouble, given India's famously exasperating mix of politics and regulations? With 400 million people under the age of 18 and a blistering economy that has readjusted aspirations across the country, higher education in India is a boom market. Indians already spend $7.5 billion annually earning degrees in other countries. On American campuses, their presence is bigger than that of any other nationality. As India looks to dramatically expand and improve higher education at home, the possibility of luring top-flight American schools is an intriguing one.

The Indian government, however, is wary of throwing open its doors and allowing foreign colleges to set up campuses. Much-debated legislation on opening India to foreign providers continues to languish. In the meantime, Indian entrepreneurs are teaching a lesson in opportunism, jumping into the market with programs of widely varying quality. (See pictures of the college dorm's evolution.)

Restricted from operating independently in India, foreign institutions have been able to get a toehold by setting up joint ventures with Indian colleges. From Northwestern to North Dakota State, hundreds of foreign schools have found partners. India's Manipal University offers joint programs with 10 colleges in the U.S.

The benefits of these tie-ups go both ways. American universities get to enhance their global prestige and boost enrollment as well as their bottom line. Students in India often pay from $10,000 to $20,000 in annual tuition to the American-branded schools. In some cases, Indian students will spend time at each of the two campuses. More often, the American college, for a fee, lends its name, curriculum and degree to its Indian counterpart.

Last year, Ohio State inked a deal to design a management course for the Asia Graduate School of Business in Hyderabad. The two schools agreed to split the teaching duties. The Indian business school agreed to fork over nearly $1 million for the right to use the curriculum and the OSU brand. (See the 20 best back-to-school gadgets.)

Virginia Tech shopped for a partner to bring its master's program in information technology to India. The school got dozens of offers, says Parviz Ghandforoush, who managed Virginia Tech's program. "The hardest part for us was that we were not very familiar with Indian higher education. It was very difficult to evaluate," he says. But Virginia Tech liked what it saw in the S.P. Jain Institute of Management and Research in Mumbai. Virginia Tech exported its curriculum and faculty and offered a bona fide Virginia Tech degree. The tuition for the class of 60 students ran $15,000, which went to Virginia Tech. S.P. Jain provided Virginia Tech with campus facilities and handled student recruitment in return for the cachet of the link with an American college.

Virginia Tech was happy with the program, but after four years, one of India's oversight bodies, wary of rising foreign influence, began to question S.P. Jain about the validity of some of the other programs it operated. Uneasy about the regulator's interference, Virginia Tech put the brakes on it, says Ghandforoush. "Virginia Tech is a large institution," he says. "We have to be careful."

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