Wednesday, May 11, 2011


The Achilles’ Heel of the For-Profits

Quick -- what’s the fatal flaw of for-profit higher ed?

Adjuncts? Nope -- the nonprofits invented the genre, and have carried it to extremes.

Online instruction? Nope -- they don’t have a monopoly on that, either.

Low standards? Nope -- they didn’t invent low standards, and some of them are as immune to the charge as are many nonprofits.

Employer focus? Puh-leeze. Have you seen community colleges lately?

To be fair, it’s a bit of a trick question. The fatal flaw of for-profit higher ed is the same fatal flaw for public higher ed. It hasn’t solved the cost disease.

The news that the Princeton Review has dropped its community college program really didn’t surprise me. The program consisted of teaching the same classes as a local community college, often using the same faculty, but charging more. The idea was to provide additional capacity that the community college couldn’t -- in this case, in a Nursing program -- and to turn a profit by charging more.

I’ll repeat that last part for emphasis. To turn a profit by charging more.

The program wasn’t any more efficient at the core business of teaching. It had not figured out any breakthroughs in pedagogy that would help otherwise-struggling students to get it. It did not find a disruptively brilliant use of technology. It simply offered additional capacity at a higher price.

When I worked at Proprietary U, I remember occasionally wondering what enabled it to be as profitable as it was (and it was). The classes weren’t outlandishly large when compared to the local competition. When I got there it didn’t even offer online courses. (I’m dating myself a bit with that.)

It eschewed some of the cost centers that weigh down other colleges, like athletic programs and manicured quads. It had a twelve-month teaching calendar, so students could finish eight semesters in less than three years, and the building seldom lay fallow when it could have been producing revenue. It kept its programmatic offerings relatively few, so it didn’t have to run low-enrolled sections of zombie majors. And it charged more, and paid less, than the local publics.

(To be fair, it actually incurred higher costs in marketing and admissions. I’m constantly surprised at how small the Admissions staffs are in the cc world.)

But the nut it couldn’t crack was teaching. It tried, sometimes in stupid and offensive ways, but it couldn’t.

This Chronicle piece reminded me of those stupid and offensive ways. Every Tuesday the deans used to get a report -- anyone remember dot matrix? good times -- showing the sections with the highest drop rates up to that point, with instructor’s names attached. The idea was to hector the offending instructors into mending their alienating ways. I foot-dragged on that until I got another job, but the institutional direction was there.

At the time I was offended by it. Looking back, though, I’m struck at how primitive it was. The entire competitive advantage in the classroom consisted of telling instructors to try harder. As barriers to entry go, that ain’t much.

The actual classroom instruction looked pretty much like actual classroom instruction anywhere else. The faculty thought of them/ourselves as college faculty, with all the same complaints and points of pride. (The lack of summer breaks was unique, but otherwise it was pretty much the same.) Department meetings looked much like department meetings anywhere. The student body was very much like the student body at most community colleges, if a bit more male.

That’s probably why I’ve been so unsympathetic to blanket condemnations of for-profit higher ed made by people who’ve never worked in it. They often rely on stereotypes or overheated fantasies of the worst possible corporate caricatures. They simply don’t describe the on-the-ground reality.

The reason the for-profits are struggling now -- beyond the obvious missteps of a few conspicuous morons -- is that they never actually solved the underlying productivity problem, and the political/economic room for cost premiums is shrinking. They aren’t flawed by being radically different. They’re flawed by being very much the same.

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