How to Judge For-Profits

Accreditors and those they accredit consider how to evaluate the fast-growing institutions.
July 10, 2006

Growth in the for-profit sector is a hot issue on the higher education conference circuit. Fall enrollment in degree-granting for-profit institutions has risen nearly threefold – from 304,000 in 1996 to 880,000 in 2004  --  according to figures from the National Center for Education Statistics.

Accreditors and some of the for-profit institutions they accredit discussed the implications of this growth Friday at the summer workshop of the Council for Higher Education Accreditation. Speakers said that as for-profits gain in popularity and as the sector continues to mature, it's important for institutions to more vigorously report data on job placement, and graduation and retention rates. The information will allow colleges to see how they measure up with each other, and help remove some of the secrecy that still surrounds the sector, panelists agreed.

Richard Garrett, a senior research analyst for Eduventures, a consulting firm that works with both nonprofit and for-profit institutions, opened the session with a plea: When analyzing the for-profit sector, keep diversity of institution and program mission in mind. “It’s a mistake to regard the for-profits in a monolithic, simplistic way,” he said. “That won’t set a good dialogue.”

Garrett, speaking to an audience with varied experience working with or for for-profits, explained some of the variety -- colleges with a focus on online, international and adult learning, and even those that team up with nonprofits to offer programs. He said there has been a movement in the industry toward consolidation of ownership and a shift toward companies becoming publicly traded.

Gregory O’Brien, president of the for-profit Argosy University, said that because for-profits remain bottom-line oriented and are tied to stock prices, they can't tolerate "bad outcomes."

Steven D. Crow, executive director of executive director of the Higher Learning Commission of the North Central Association of Colleges and Schools, said these colleges' ability to act quickly and make structural changes is a trademark, and can sometimes lead to suspicion within academe, which, as a whole, is used to slow change, he said.

Garrett pointed out that while New York state is clamping down on for-profits, and even though three other states -- Delaware, Montana and Rhode Island -- are still devoid of for-profit institutions of higher education, these institutions are largely accepted as being part of the mainstream. 

Paula Peinovich, president of Walden University, a for-profit institution that focuses on offering professional graduate programs to mid-career adults, said that as state funding for higher education decreases, public institutions are often thinking more like for-profits by making decisions based on the bottom line. “The sectors are more alike than different,” she said. “The source of funding is less important than the mission.”

Accreditation is an area in which some similarities and differences are evident. The largest for-profit providers have sought and gained regional accreditation, and are assessed in roughly the same way as their nonprofit counterparts are, Garrett said. The individual programs are a different story: Many are still grappling with the question of how, and sometimes if, they want to be measured by specialized accreditors.

Garrett said that many for-profits are pushing for standardization of curriculum across institutions so that it becomes easier to size up comparable programs -- say, veterinary technology distance learning programs offered by two separate colleges. O'Brien said it is important to have continuity within a college, as well. "At Argosy, we have to make sure that the learning outcomes in Seattle and Atlanta are equal," he said, adding that there is a fine line between "healthy" standardization and a system that stifles faculty innovation and classroom creativity.  

Panelists agreed that more information about pedagogy and student outcomes is beneficial to all. Garrett said the Integrated Postsecondary Education Data System, the current national reporting mechanism, provides colleges with “limited data,” and that institutions "disclose what they want to disclose."

“There’s no evidence of widespread satisfaction or dissatisfaction at the University of Phoenix,” he said. “No one has good information on how [for-profits] are serving their students. No one knows what the benchmarks are."

Garrett and O'Brien both said that it’s a matter of one institution taking the lead by releasing pertinent data, and then others will follow. “Now that we are in a much more competitive environment, it's time to take a serious look at ourselves,” O'Brien said.


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