Catching up on some old blog reading, I came across this exposé - or should I say, "investigation" - done by PBS's Frontline on for-profit, higher education corporations in the United States. The short version of the story is pretty straight-forward: Many regionally-accredited colleges in the US (and elsewhere) face significant financial pressure. Regional accreditation is the key criterion through which a college's programs qualify for US Federal Government student loans programs. For students who do not qualify for, or cannot afford, admission to either a state college or private, not-for-profit university, these for-profit institutions provide a way of obtaining at least a nominal, accredited qualification that may enable them to compete in a job market that increasingly demands formal qualifications. Put all of these factors together and you get the recipe for a perfect business: high demand among an under-serviced market, with immediate funding provided by the federal government, and those on-the-deferred-hook being promised that the value of their asset (the over-priced house... err... degree) will cover the future repayment of a loan they maybe shouldn't have qualified for in the first place.
Enter the private investors. There is considerable profit to be made by siphoning money from the federal purse now, to be repaid by anonymous individuals in the future, via investing in these down-at-the-heels colleges whose primary asset is not the quality of their research or, more importantly, the quality of their instruction, but rather the fact that their programs qualify for federal student loans. Hence, the astounding rise in market capitalization and economic valuation of such businesses as Grand Canyon University, Argosy University, Education Management Corporation, DeVry University, Chancellor University whose own claim to fame is the marketing potential of the Jack Welch Management Institute (ironically, among the close-up shots is a listing for a course in Business Communications and Ethics taught at that Institute), and the granddaddy of them all, University of Phoenix. The fact that the resulting average student debt load from these schools is almost double that of private (i.e., expensive) not-for-profit universities, and the employability of its graduates is apparently a fraction of that of traditional, higher-education institutions should not come as a surprise. The issue for the traditional business mind (hello, Mr. Welch!) is profit, so long as it violates no laws. The long-term effects, actual suitability for purpose, and consequences for any other constituency whom the business touches - those are apparently not part of "business ethics" in many traditional constructs.
The video is 55 minutes, but worthwhile viewing by anyone concerned with the state, and future, of higher education. What is considerably troubling to me as an Adult Educator is that many traditional, well-respected universities are beginning to follow the supposed economic imperative to be run more like a business, especially when it comes to the factory-model of undergraduate education (hello, University of Toronto!).
I should note that the program did not examine "hybrids": those traditional universities that have out-sourced the management and technical logistics of their distance-education programs to for-profit education corporations, while retaining control of their academic standards, faculty, and admissions.
[Technorati tags: for-profit college | argosy university | education management corporation | devry university | chancellor university | grand canyon university | university of phoenix]