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Rick Hess Straight Up

Education policy maven Rick Hess of the American Enterprise Institute think tank offers straight talk on matters of policy, politics, research, and reform.

Money & Finance Opinion

The Phantom Menace

By Rick Hess — December 15, 2011 5 min read

When it comes to the question of for-profits and American education, there’s often more hysteria than analysis. Just this weekend, the New York Times published an extensive, shall we say, selectively sourced attack of for-profit venture K12 Inc. piling atop a similar piece a few weeks back by the Washington Post and other “the profiteers are coming!” exercises in The Nation and elsewhere. To engage in a bit of poetic license, when they look at for-profits, these journalists (and the experts that they quote) see Darth Vader.

Sure, there are valid and sensible concerns about the role of for-profits in schooling. But aggressively recruiting clients and cutting corners to make a buck is the flip side of the things that for-profits are uniquely positioned to do well--which is to squeeze cost structures, find new efficiencies, and rapidly scale. Whether for-profits do these things constructively or not is more about the rules and the marketplace than anything else. Consequently, when I see for-profits, I see not Darth Vader but the young Anakin Skywalker--a still-developing adolescent capable of doing great good or great harm.

I was flashing on this as I read Ben Wildavsky’s new white paper, “Crossing to the Dark Side?” Wildavsky, a journalist, senior scholar in research and policy at the Kauffman Foundation, and author of The Great Brain Race, interviewed a number of educators who have worked at both for-profit and traditional providers in higher education. Now employed at for-profits, the interviewees had previously worked as professors, deans, and presidents at institutions including Northwestern, UC-Berkeley, University of Minnesota, the University of Texas system, Princeton, University of Wisconsin, and so on. (Full disclosure: Ben penned the paper for my AEI series “Private Enterprise in American Education.”)

First off, in a finding that may slightly help those who fear for-profits, Ben finds that “many interviewees were quick to acknowledge legitimate concerns over quality in the for-profit sector.” Indeed, as Peter Smith, senior vice president for academic strategies and development for Kaplan Higher Education and founding president of Vermont’s statewide community college system, told Ben, “I hold no favor for some of the abuses that have been discovered across the board--they’re wrong; they’re disgusting; they shouldn’t happen.”

Complicating the Darth Vader caricature of for-profits, however, is Ben’s noting that the traditional and for-profit sectors have more in common than many accounts might suggest. He writes, “Notwithstanding the built-in differences between for-profits and not-for-profits on such core matters as faculty control of the curriculum, more structural similarities exist than outsiders might imagine...This is not a coincidence...because such structure and internal processes are needed to comply with accreditation requirements.”

Ben also flags some of the potential strengths of for-profits. With regards to trial and error, and to measurement, he writes, “For-profits are much more entrepreneurial when it comes to creating courses, testing new modes of curriculum or instruction, and using data to measure learning outcomes and the quality of teaching. They are also much quicker to respond to market incentives to scale up a set of courses or add instructors... Harold Shapiro, former president of Princeton University and the University of Michigan, says this emphasis on responding to employer demands is a philosophical dividing line between traditional and for-profit higher education. ‘In elite higher education, you think you know what people need, so you produce that. You’re not out there asking firms or consumers, ‘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?’”

Regarding the role of faculty, Ben writes, “The primary duty of for-profit faculty is teaching, not research, which represents a huge departure from many research institutions.” As such, Ben notes that, "[For-profit] faculty are evaluated much more systematically than in traditional higher education.” This stands in contrast to the way many traditional institutions evaluate their faculty, said Thomas Boyd, dean of Kaplan business school and former associate dean of CSU Fullerton business school. At CSU Fullerton, Boyd recalled, “‘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.’”

When it comes to practical instruction and student support, Ben points out, “One reason among others that tenure is unheard of in for-profit colleges is that many of them hire working professionals or retired college instructors to teach courses whose emphasis is relentlessly practical. When Jorge Klor de Alva was putting together his vision for the University of Phoenix, he said having faculty with roles in the working world was crucial. ‘We wanted practitioners,’ said Klor de Alva. ‘We used to say that you were teaching in the evening what the students would be able to apply to their workplace in the morning.’”

As for the takeaways, I think Ben’s summary nails it. He writes, “To sum up, the lessons that for-profits can teach the rest of the postsecondary world begin with flexibility and speed. Institutions closely attuned to the practical needs of consumers, defined to include both students and prospective employers, can change course quickly when market demand for a particular vocational specialty changes...No doubt the for-profit nature of institutions like the University of Phoenix has contributed to some of their problems: heavy pressure for fast growth and profits, an emphasis on enrolling students quickly, and incentives to capture a growing pool of federal aid without accompanying incentives to ensure that students’ future employment prospects are as strong as promised.”

Sounding a lot more attuned to the mundane realities than do the spooky conspiracy theories that often pass for coverage of for-profits, Ben concludes, “For all their flaws, for all the dismaying practices and bad actors that continue to be associated with the [for-profit] sector, their innovative characteristics are well worth studying. The observations and experiences of those interviewed for this paper suggest that 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.”

Now, for what it’s worth, I think this is a far more useful take on the whole for-profit question than the histrionics that we’re accustomed to.

Related Tags:
For-Profits

The opinions expressed in Rick Hess Straight Up are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.

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