For-Profit Lessons for All

Despite all the controversies over the for-profit sector, it uses some approaches that could be embraced by traditional colleges, writes Ben Wildavsky.

March 1, 2012

Once little more than a blip on the radar of American higher education, for-profit colleges now enroll about 1 in 10 of the nation’s postsecondary students. And this fast growth has not gone unremarked. The past year has brought unprecedented scrutiny and often harsh criticism of proprietary education from policy makers, regulators, and the news media. Unfortunately, too little attention has been paid to the innovative practices the best for-profits have to offer -- and how such reforms could help the rest of the higher ed world.

For-profit detractors are, of course, not entirely wrong when they complain of dubious recruiting tactics, overblown employment promises, and sky-high student-loan default rates. The sector is under heavy pressure from investors for fast growth and profits, and its expansion has been fueled by the easy availability of a large pool of federal aid. However, at a time of soul-searching about the ability of conventional colleges and universities to serve increasing numbers of students more effectively, for-profits should not be written off.

For a new white paper on private enterprise in American education, I interviewed a small collection of professors, deans, and presidents who have worked in both sectors to gather their firsthand reflections on what distinguishes the two educational universes. They were almost all quick to acknowledge the flaws of some for-profit colleges. But they drew from personal experience – at institutions including the University of Texas, Princeton University, the California State University, the University of Phoenix, and Kaplan University – to argue that the sector has many virtues as well.

These academics observe, first, that these relatively new colleges distinguish themselves, beyond their obvious goal of making money, by their targeted efforts to serve nontraditional students. Many who enroll are working adults with children, members of racial and ethnic minorities, first-generation college students, or all three.

Given the practical orientation of such students, for-profit leaders focus on building convenient campus locations, creating many online courses, and establishing market-driven, career-oriented degree programs. They emphasize data collection and systematically measure learning outcomes. And they are willing to standardize curriculum and minimize faculty autonomy to a degree that is much rarer in conventional colleges and universities.

The focus on meeting the needs of the labor market is a key philosophical dividing line between for-profits and their peers, particularly traditional research universities, according to Harold Shapiro, former president of Princeton and the University of Michigan. Shapiro is now board chairman of DeVry, Inc., which owns DeVry University, Keller Graduate School of Management, and other for-profits. "In elite higher education," he says, "you think you know what people need, so you produce that. You’re not out there asking firms and customers, 'What do you want?'… Whereas at a place like DeVry, which is much more focused on career education, management is out there all the time talking to businesses, asking 'What do you want?' "

For-profits also do something unusual in many traditional colleges and universities: they evaluate new hires on their teaching skills and give new instructors pedagogical training. Once on the payroll, instructors are evaluated much more systematically than their peers in traditional academia, even those who work at teaching-oriented colleges.

That’s in part because the culture of faculty independence in mainstream academe can make even casual evaluation difficult, says Thomas Boyd, former associate dean of the business school at California State University at Fullerton, and now dean of Kaplan's business school. "It was sort of a protocol that you had to walk on eggshells when you talked about what they were doing in their classroom. Of course you couldn’t go into the classroom and observe a professor. You could ask their permission, but you couldn’t drop in on classes. That was considered very inappropriate, to watch how they were teaching."

Perhaps the biggest appeal of for-profits for those who have joined the sector is that they are so new – works in progress in which trial-and-error is encouraged and inevitable. Entrepreneurial for-profits can move much faster to create new programs, adjust staffing levels, and change curriculums.

Michael Offerman, a onetime dean of continuing education at the University of Wisconsin-Extension who later became president of Capella University, says he was struck when he joined the online university by its ability to create new programs, such as the company’s development of "curriculum maps" tailored to skills valued by employers, accompanied by comprehensive measurement of whether students are in fact learning those skills. "The issue isn’t that for-profits are so much better at this," says Offerman. But their newness and distinctive mission "allows us to innovate and experiment in ways that I didn’t see happening as much when I was in public institutions."

Taken individually, these approaches aren’t unique to for-profits. But there is good reason to believe that such practices, when used together on a consistent basis, have particular value -- value that extends well beyond the for-profit context. For-profits will certainly need to work hard to prove their worth as they remain in the regulatory and media spotlight for the foreseeable future. But for all their flaws, for all the dismaying practices and bad actors that continue to be associated with the sector, their innovative characteristics are well worth studying. Traditional colleges and universities will be badly mistaken if they assume that the travails of for-profits today mean that profitable lessons cannot be drawn from their successes to date – and those likely to occur in the future.


Ben Wildavsky, a senior scholar in research and policy at the Kauffman Foundation, is co-editor of Reinventing Higher Education: The Promise of Innovation (Harvard Education Press, 2011) and author of The Great Brain Race: How Global Universities Are Reshaping the World (Princeton University Press, 2010). This essay is adapted from "Crossing to the Dark Side?," a new paper he wrote for the American Enterprise Institute’s series on private enterprise in American education.


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