Indonesia permits foreign equity participation up to 49 percent for provision of education by a foreign institution. The Law No.20/2003 allows an institution of a foreign country to operate and provide education services in the territory of Indonesia. This law allows foreign training centers to conduct courses for foreign languages, information technology, industrial/technical training, management/business training, transportation, hospitality and health, and other critical fields.
The six U.S. schools by number of current Indonesian Students in academic year 2007 – 2008 were Purdue University, Diablo Valley College (CA), University of Southern California, Seattle University, North Seattle Community College and De Anza College (CA). In the 2007-2008 academic years, it was estimated that there were 7,629 students from Indonesia studying in the U.S. (up 4.8 percent from the previous year). Indonesia is the sixteenth-leading offshore source of students coming to the U.S.
The majority of students from Indonesia study at the undergraduate level. In 2007/08, their breakdown was as follows:
23.9%: Graduate Students;
10.3%: Post Study Training (Optional Practical Training)
Fields of interest in graduate studies include: MBA/International Business, Finance, Computer Science, Engineering (multiple categories), Marketing, and Accounting.
With a population of over 237 million, Indonesia offers a huge potential market for U.S. providers of secondary, tertiary, and vocational education. Because of the on-going economic crisis, studying abroad is prohibitively expensive for many Indonesians. Thus, educational institutions that are able to provide the benefits of a foreign education without the costs of traveling abroad are likely to be popular options.
Indonesian students fall into two main groups. The first group is composed of students who finance their education privately with support from parents or assistance from overseas relatives. The majority of this group live in the major cities: Jakarta, Surabaya, Bandung, Medan, and Denpasar (Bali). This group accounts for 95 percent of Indonesian studying abroad. The second group of five percent is financed by local universities, colleges and scholarships, and grants.
U.S. schools can enter the Indonesian market in several ways. To overcome the competitive disadvantage of the relatively high cost of obtaining a U.S. education, the "2 plus 2" program is becoming popular. (The first two years are spent in community colleges or institutions in smaller towns that require lower education fees, and then the students transfer for their next two years to a university).
An institution may become more visible in the Indonesian market through participation in education fairs and/or by working with recruitment agencies. This latter method is popular with prospective Indonesian students and their parents, because in addition to answering questions about schools abroad, the agencies help with registration for schools, arrangement of accommodations, airport pickup and visa applications. Indonesians normally prefer one-stop package arrangements like this.