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Mitch Daniels chats up 'fellow disruptees' at for-profit meeting

It's the Results, Stupid
June 7, 2013

ORLANDO – Mitch Daniels is agnostic on the various delivery modes of higher education or the tax status of colleges offering them, as long as students are getting a quality education at an appropriate price.

“I’m only interested in results per dollar charged,” Daniels, president of Purdue University and the former Indiana governor, said in a speech to for-profit-college leaders here on Thursday. “That’s the value equation.”

Daniels was speaking at the annual meeting of the Association of Private Sector Colleges and Universities, which is the for-profit sector’s primary trade group. The mood may have been glum here for some attendees, because most for-profits are coping with steep dips in enrollment and revenue.

However, the rest of higher education also faces challenges, Daniels said, many of which have similar dimensions to those that are buffeting for-profits. Tests for public universities include declining state support and questions from lawmakers and the general public about the value of college credentials.

“You must sense some of the same shifting of the ground that I do,” said Daniels.

Furthermore, no college will be exempt from the growing clamor for accountability, he said. “It’s coming and high time for it.”

Daniels’ speech was humble and low-key. The former presidential hopeful said several times that he is new to the academy, having taken the helm at Purdue earlier this year. But Daniels said he is pushing a few key changes at the research university, particularly drives to improve graduation rates and to be more transparent about tuition levels.

“We are getting off the sticker-price bandwagon,” he said, signaling that the university would do less tuition discounting in the future.

Daniels gave a few discreet nods to controversy that has at times dogged for-profits. He said some in the industry might have “overshot” with an inferior product -- a problem he said also occurs at nonprofits.

However, Daniels said there is plenty of room for the for-profit sector to help the nation cope with the deep problem of not enough trained workers, which has led to large numbers of unfilled jobs.

“We need you,” he said. But only if for-profits, like all colleges, can demonstrate that they are helping students achieve “upward mobility and greater success.”

The industry is particularly well-suited to serving adult students, Daniels said, including many who hold some college credits but no credential. There are roughly 750,000 such candidates for degree completion in Indiana alone.

Daniels said he learned about the adult student market during his time as governor, when he played a role in the creation of WGU Indiana, a state branch of Western Governors University. The nonprofit Western Governors offers relatively low-cost online bachelor's and master’s degrees that are self-paced and competency-based. He called the university a “great model.”

Emerging online players like WGU can also be seen as a threat to both for-profit and traditional higher education, a view Daniels acknowledged.

A few years ago, for-profits were the disrupters, he said. “Now you are fellow disruptees. That’s what markets do.”

For its part, Daniels said, Purdue will continue to stay nimble by aggressively pursuing innovations in education technology and delivery. Other colleges should do the same or face an uncertain future.

In the meantime, he said, all higher education institutions will need to demonstrate a return on investment for the credentials they offer. Likely ways to do so will include loan default rates, debt levels, graduation rates and job placement numbers. He approves of performance funding as a way to keep tabs.

These days, Daniels said, a lack of accountability is something that “I don’t think the world will permit at any stage of education.”

 

 

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