Assessing for-profit higher education: a good business proposition?
One of the key developments over recent years in the higher education landscape has been the phenomenal growth of for-profit higher education. It is important to distinguish between private universities and for-profit institutions: private not-for-profit universities include some of the most respected names globally, such as Harvard, Yale, Stanford and the other Ivy League institutions. While for-profit institutions have not tended to appear in global rankings, they have had a big impact in the education scene more generally. Examples include the online provider University of Phoenix; the new venture announced recently in England by philosopher Anthony Grayling; and in Ireland institutions like Griffith College and the Dublin Business School.
The latter institution – the Dublin Business School – is now the largest private provider of higher education in Ireland, and has student numbers comparable with some of the universities. It is interesting for another reason: it is a subsidiary of Kaplan Inc, itself a subsidiary of the Washington Post newspaper. Kaplan, with its flagship Kaplan University, has become major source of revenue for the Washington Post, and in fact has provided by far the largest proportion of the company’s profits. With a set of values that would be seen as compatible with some traditional providers of higher education, its performance might be said to have suggested that for-profit higher education is a good business proposition. Indeed the idea that there is a sound public policy basis both in the business model and in the educational mission of private for-profit higher education has clearly been motivating the British government in its recent policy pronouncements.
If for-profit providers become major players in higher education, this could change the face of the sector, including its publicly funded parts. One possible consequence could be to remove research activity from all but a handful of institutions. But then again, that is based on the assumption that the business model is a good one; and here the jury may actually still be out. The US government has recently decided to introduce a tighter regulatory framework for such institutions, and one immediate consequence of this has been a fairly dramatic drop in enrolments. Kaplan has recently announced a major drop in profits – by 67 per cent – as a result.
Maybe the question needs to be answered now what kind of business, and then what kind of educational organisation, for-profit institutions are intending to be. Some of them have a distinctly swashbuckling approach, while others appear to attach more importance to educational and scholarly values. Some need to be tested to see whether their statements of values is reflected in pedagogical and scholarship practice.
For myself, I find it hard to believe that a profit model, in which corporate directors are bound by law to consider the financial interests of shareholders before anything else, is appropriate in higher education. But I am interested in the discussion.