Tamar Lewin

The collapse of Dubai’s overheated economy has left the outposts of Michigan State University and the Rochester Institute of Technology in the United Arab Emirates struggling to attract enough qualified students to survive. In the last five years, many American universities have rushed to open branches in the Persian Gulf, attracted by the combination of oil wealth and the area’s strong desire for help in creating a higher-education infrastructure. Education City in Qatar has brought in Carnegie Mellon, Cornell, Georgetown, Northwestern, Texas A&M and Virginia Commonwealth.

Abu Dhabi, one of the seven emirates that make up the United Arab Emirates and the one that controls most of its oil, is still flourishing. And it is still generous in its support for the most ambitious American educational effort in the area, New York University’s liberal-arts college, which is scheduled to open there next fall with a highly selective class of 100 young students from around the world.

In Dubai, however, the timing for Michigan State and the Rochester Institute of Technology could hardly have been worse. Both started classes in August 2008, just before Dubai’s economy began to crumble. By this month, Dubai’s debt problems were so serious that Dubai World, a government-owned investment company, avoided a bond default only with a $10 billion bailout from Abu Dhabi.

Because most Dubai residents are expatriates, thousands of them left when their jobs disappeared, and the prospective college-student pool in the area has shrunk substantially. “Nobody could have anticipated the global meltdown, which has certainly had a negative effect on our student marketing,” said Brendan Mullan, executive director of Michigan State Dubai. Michigan State, with only 85 undergraduates, is seeking to raise that figure with a scholarship offering half-price tuition to the first 100 qualified transfer applicants for the semester that starts next month.

“We’ve had close to 200 transfer applications, some from other universities in the UAE, but others from India, Pakistan, Saudi Arabia and Oman,” Mr. Mullan said. “We are not compromising on quality, even if that means it takes us longer to gain traction here. ...”

Mr. Mullan said that while the break-even point for the campus was now expected to be five years, up from the original goal of three years, Michigan State was determined to remain in the Gulf.

“We still believe this is viable,” he said. “We’re not just going to be a teaching storefront here; we’re going to have significant research capacity, and our commitment to Dubai is unyielding.”

Rochester, which began only with graduate programmes, accepted almost 100 students for this academic year. But Mustafa Abushagur, president of the Dubai campus, said it ended up with only about 50, spread among electrical engineering, computer networking, finance, and service and leadership studies. Rochester plans to start an undergraduate programme next year, Mr. Abushagur said.

“Our plan for next year is 100 to 120 students,” he said, “which we think we can get, because we’ve studied the market and we believe that as an institution, we can distinguish ourselves in certain programmes that are in demand here.”

George Mason, one of the first American universities to open a branch in the United Arab Emirates, closed its Ras al Khaymah temporary campus in May, having never graduated a single student.