Private higher education globally accounts for approximately one-third of all higher education (HE) enrollments. In Asia, Japan and South Korea have high concentrations of private HE institutions. China, with 7.08 million students in 773 private universities and colleges, possesses the world's largest number of students in private HE. In China, private HE institutions don't receive public funds but are authorized to award degrees. Independent colleges represent a unique category: privately run but affiliated with a public university. These colleges receive initial resources from their parent universities but rely on tuition fees for funding. In 2008, the Ministry of Education (MoE) mandated that independent colleges separate from their parent universities, yet by the end of 2020, a significant number had not done so. A dramatic decrease in this number occurred by the end of 2021, prompting this study to investigate the factors behind this shift. The separation impacts stakeholders including the government, parent universities, and investors, creating potential conflicts of interest and legal disputes. This research explores these factors from the viewpoints of these stakeholders, reviewing relevant literature and utilizing a stakeholder theory framework.

The line between public and private higher education is increasingly blurred due to private involvement in public universities, privatization of services, corporatization, and publicly funded privatization. Public universities often partner with private colleges, with the private colleges needing to meet certain standards before receiving separate licenses. In China, HE public-private partnerships (PPPs) arose spontaneously before official government endorsement. The rise of independent colleges was fueled by insufficient public funding for public universities, exceeding HE demand, private investment interest, and family desires for higher education for their children. The transformation of independent colleges involves both macroscopic institutional changes and internal, microscopic shifts. Successful separation also hinges on meeting national standards for newly founded universities. Independent colleges initially developed without strict government regulation, leading to a later need for regulatory measures. Minban colleges, offering 3-year diplomas, contrasted with independent colleges, offering 4-year bachelor's degrees, the latter more attractive in the job market. Public universities collaborated with private sponsors, including private enterprises, retired officials, and social entrepreneurs, each with varied resources and goals. State-owned enterprises also act as sponsors, circumventing direct government involvement. The MoE initially required applicant institutions to have bachelor's degree-awarding powers, later raising it to doctoral level, limiting the number of potential applicants.

This qualitative study is part of a broader national research project on the governance of private universities in China. Data collection involved interviews with stakeholders from three independent colleges in two provinces: Jiangsu (economically developed) and Sichuan (relatively underdeveloped). The selection process involved initial discussions with staff and students, resulting in a final group of participants including college shareholders, senior managers, parent university leaders, provincial education department officials, private HE policy researchers, and members of the Sichuan HE Provincial Review Committee. All participants had held their positions for at least three years, with a mean age around 50. A snowball sampling technique was employed. Due to the COVID-19 pandemic, data collection initially occurred online via WeChat, later supplemented by in-person interviews. Interviews were semi-structured, focusing on stakeholder interests, government policy influences, and reasons for delayed separation. The researchers used an interview guide with questions about stakeholders, government policies, the interests of different parties involved and the reasons behind the increased separation of colleges in 2021. Thirty-one documents (17 regional, 14 national) were gathered from official sources, providing context and policy details. Nvivo software assisted in qualitative analysis of interview and document data. The analysis involved generating codes, themes, and categories focusing on the development of independent colleges, challenges and policies, and stakeholder interests. Eleven categories were identified and grouped into three analytical levels: the development of independent colleges, challenges and policies, and the interests of different stakeholders. This combination of interviews and document analysis provided a comprehensive understanding of the factors influencing the separation process from a stakeholder perspective.

The study reveals diverse stakeholder interests influencing the separation of independent colleges. The MoE's push for separation stemmed from the goal of improved governance and reform of the private university sector, particularly concerning the classification of universities as either for-profit or non-profit. Private funders initially benefited from utilizing parent university resources while maintaining control and financial returns. However, the MoE's regulations requiring asset transfer to the independent college created a dilemma for investors, reducing control and increasing costs. The reluctance of many independent colleges to separate stemmed from these investor concerns. Parent universities, receiving significant management fees from independent colleges (15-40% of tuition revenue), were hesitant to let them separate. The high "break-up fees" demanded by parent universities presented a significant obstacle to separation. Provincial governments also demonstrated varied attitudes towards separation, influenced by their financial capabilities and economic development levels. Economically underdeveloped provinces often lacked the funds to support the transition and thus were less inclined to facilitate separation. Effective policy implementation required a balance between national policies and local context. The study notes that the more stringent 2020 MoE policy played a crucial role in accelerating separation by creating a more clear set of requirements and stricter enforcement mechanisms. This forced negotiations between stakeholders, leading to numerous separations in 2021.

The findings address the research question by illuminating the complex interplay of stakeholder interests that influenced the separation of independent colleges. The study underscores the limitations of top-down policy implementation without considering the practical realities and vested interests of stakeholders. The MoE's policy, while aiming for improved governance, faced resistance due to the financial incentives for both parent universities and investors to maintain the status quo. The success of the 2020 policy demonstrates the importance of aligning policy goals with stakeholder interests. The findings highlight the need for a more nuanced approach to higher education reform, considering regional economic disparities and the diverse needs of various stakeholders. The significance of the study lies in its contribution to understanding the challenges of policy implementation in a rapidly evolving and complex higher education landscape. The research contributes to broader discussions on the governance of public-private partnerships in the higher education sector.

This study contributes to the understanding of higher education governance in China, revealing the complex interplay of interests among stakeholders in the separation of independent colleges. The initial reluctance to separate was due to financial incentives for parent universities and investors, while the 2020 policy's success highlights the importance of balancing policy goals with stakeholder concerns. Future research could explore the long-term impacts of separation on the quality of education, financial sustainability, and the overall higher education landscape in China. Comparative studies across different provinces with varied economic conditions would also be valuable.

The study's focus on three colleges in two provinces limits the generalizability of the findings. While the chosen colleges represent diverse economic contexts, they may not fully capture the diversity of experiences across all independent colleges in China. Future research with a larger and more geographically diverse sample is needed to enhance the generalizability of the findings. The study's reliance on interviews and documentary analysis may be affected by potential biases in participant responses and document content.