The idea behind for-profit colleges is that they would deliver value to students through practical, career-focuses courses, scheduled at convenient times. They don’t have bells and whistles like student lounges, athletic facilities, or art museums. They also don’t support research faculty, nor do they offer the types of seminar classes that are so easy to make fun of.
But does it give students what they need to compete with graduates of traditional programs? Let’s face it, the strongest students go to the most competitive colleges, where they have the luxury of student support and the tough conditioning of competing with other strong students.
The for-profit model looks appealing: lower costs, more marketable students at graduation. Interest in it has spawned endless discussion and even some turmoil at traditional universities.
But something else has happened: in the zeal to get ever-higher quarterly earnings per share, many for-profit colleges emphasized enrollment over retention or graduation. Students dropped out with loans and neither a degree nor credits that would transfer elsewhere. The costs may be lower, but so is the return on investment; many of the students are finding that they are not as marketable as someone from a public university or community college.
Guess what? The market seems to have worked just fine. Word got out, and students started avoiding for-profit colleges.
I’m not sure the for-profit model works in education because the value accrues over decades – and accrues across society, not to an individual. That’s not a justification for waste; in my perfect world, colleges would be more accountable to students, but that’s a lot better than being accountable to shareholders who care only about the quarterly momentum.
Furthermore, because education has value to all of society, it seems wrong to let a private operator extract that value – especially if students are receiving taxpayer-funded financial aid.
