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How do you build the Harvard University of the for-profit college sector?

That’s perhaps a silly question at face value but the question reveals the challenge of manufacturing prestige and legitimacy in a higher education system that is fundamentally ordered by the former and fueled by the latter, frequently in the form of accreditation. When a college prints a degree, the credential’s minimum value is rooted in the social perception of the institution as legitimate.

That legitimacy is different for different kinds of colleges. That difference produces a prestige hierarchy. That is clearly reflected in my interviews with for-profit and nonprofit colleges. Both groups talk of for-profit colleges existing in opposition to "real" college. The for-profit college sector is acutely aware of that general perception. In their quest to defend their legitimate right to produce college degrees, the for-profit college sector’s primary challenge has been gaining the prestige that traditional colleges take for granted. When lacking the prestige of elite colleges, the for-profit sector could point to legitimacy when accredited by recognized agencies – in many cases the same accreditors that review nonprofit colleges and universities.

Despite the sector’s phenomenal growth and financial prowess it has, to date, been unable to crack the perception that for-profit college credentials are inferior to "real"  college degrees. It would seem that they could build it, the people could come, and they could even bring their federal aid, but they could not make for-profit education prestigious.

A California bill proposed last week  could end up giving for-profit institutions that have never sought or won accreditation a new kind of legitimacy. The legislation also raises the question over whether accreditation still provides legitimacy, given the ease with which legislators want to gut accreditation. The California State Senate pro tem, Darrell Steinberg, is sponsoring a bill that establishes a pool of for-credit online courses for students at the state's public colleges and universities. Ostensibly, the bill promises a solution to overcrowded classes or campuses at capacity that derail on-time degree completion when students cannot enroll in required courses. Detractors argue that this would further erode the quality of education, while supporters say it would cut student debt loads and frustration. My experience with the for-profit college sector suggests that beyond helping students, the sector sees an opportunity to finally break the “credit hour cartel” that has painted the sector as inferior.

When I partnered with my colleague Sandy Darity to convene a research conference on the for-profit college sector at Duke University last fall, I was adamant that for-profit college leaders be included. Executives from four of the nation’s largest for-profit colleges took me up on my invitation. Not long after the opening plenary, the conversation inevitable turned to accreditation woes. The debate was energetic but not at all combative. The executives in the room seemed to accept that their relationship with accreditation bodies would be challenging but not insurmountable.

The next day, the conversation turned to the issue of transfer credit hours and I was surprised at how much more contentious that discussion was than the one about accreditation. That little disclaimer at the end of many  for-profit college ads that says something along the lines of "credits earned here are unlikely to transfer” was the real thorn in the industry’s side. Symbolically, the disclaimer marks the sector as different than and inferior to "real" college. Materially, the for-profit college leaders thinks that the transfer credit autonomy of the traditional college sector is effectively a prestige cartel, used to marginalize the sector and the students it serves.

Whether you think university autonomy over transfer credit hours is a means of marginalization or quality control, it remains that it is a mechanism that preserves the prestige and legitimacy of traditional colleges and universities. When a college insists on its right to review – and in some cases to reject – credit from another institution, it protects what a credential from its institution means. There is much to be said about the extent to which college credentials signal competency versus "butt in seat," but it is difficult to deny that a college credential is a powerful symbol. And the power of that symbol is different for different institutions along the prestige hierarchy.

The California proposal to mandate the transferability of coursework from not-for-profit and for-profit providers in the approved pool, without a review from the institution receiving the credit, would be nothing short of a fundamental re-ordering of the hierarchy of public higher education. It is unlikely that such legislation could be applied to private colleges and universities. Elite private universities will be able to continue to set their own credit criteria and review processes. Public colleges would, however, effectively lose control over the credentials they produce.

The for-profit college sector had a difficult time building a prestigious for-profit product – at least in the way that the elite private universities are prestigious. But perhaps the lines between for-profit and public higher education is about to disappear. The latest ads from the University of Phoenix do not sound markedly different than the public relations of the University of California at Berkeley. There’s a somber assessment of the competitiveness of the marketplace, a nod to the importance of market-relevant training, and a promise to provide opportunity for willing and able students, irrespective of background or academic preparation. It is a public good message. Heretofore, the University of Phoenix could mimic the crème-de-la-crème of public higher education, but it could not promise a degree of equal legitimacy.

Under the proposed California bill, it wouldn’t have to. The for-profit college sector may have figured out a way to buy its way into the backdoor of the most credible and prestigious public universities the country has ever known. It doesn’t need to build it if it can transfer you into it.

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