Wednesday, April 23, 2014

 

When Categories Collide


Kevin Carey’s recent piece in the Chronicle about non-profit universities running for-profit Master’s degree programs is well worth reading.  Carey starts with the largely-uncontested point that many universities run graduate programs specifically to make money on them; he then moves to asking the obvious question, which is why we persist in treating those universities as if they were above economic motives.  How many executive MBA programs does America actually need?  

If you take seriously the idea that some graduate programs are essentially for-profit (if tax exempt), then the relatively free pass that they get in the higher ed press suddenly starts to look questionable.  

On the exact same day that Carey’s piece was published, I noticed a piece in IHE about adjuncts unionizing at a for-profit university in New York City.  

Finally, Sara Goldrick-Rab has been making hay recently with her proposal to redirect all financial aid away from private non-profit colleges (as well as for-profits), and to use the proceeds instead to make the first two years of public college free.

Individually, there’s much to be said for each of these.  Taken together, though, it’s starting to look like some of the boundaries that we’ve largely taken for granted are getting tougher to sustain.  I suspect that’s mostly a good thing.

In higher education, we’re really good at sorting.  Community colleges are different from small liberal arts colleges are different from regional comprehensives are different from flagships.  Certificates are different from associate’s degrees, which are different from bachelor’s degrees.  And so on.  Depending on where you start, it’s easy to justify the merits of one camp as against another.  (As a sector jumper, I can attest that each has its charms.)  

But while people often pick differing sides, they frequently assume that the categories themselves are relatively clear and even natural.  But they aren’t.

In the community college world, for example, it’s not unusual for a single college to run both non-profit, credit-bearing classes and for-profit non-credit classes.  When the system works right, the surpluses from the non-credit side help to offset the losses on the credit side.  (To complicate matters, there’s also often a non-profit, non-credit side that deals with adult basic education and transition programs.)  

In the world of graduate programs, some programs exist as loss leaders, generating prestige for their universities.  Some exist as service departments to staff large undergraduate classes with t.a.’s.  Some exist as political favors.  And some exist to make money for the university to support other parts of the university.  Treating all of those as equally non-profit is importantly misleading.

I was encouraged at the unionization drive at Kaplan.  It’s relatively small, and apparently confined mostly to New York City, but it’s a start.  And it raises, at least in concept, a question I’ve wondered about for some time.  If for-profits didn’t compete on exploitation, but instead on quality, would the usual objections still hold?  I remain convinced that the possibility exists for the upscale for-profit; organized labor getting a foothold could actually start to push the sector up the value chain, even if it’s kicking and screaming all the while.  Instead of trying to compete with the untaxed and subsidized public sector on price, which would become even harder with a unionization drive, it could finally flip the switch and shift the conversation.  Stay tuned.

I discussed Goldrick-Rab’s proposal earlier this week; in this context, I’ll just say that although she accepts the existing categories of institutions as relatively transparent, she draws the boundary of “acceptable” where most people don’t.  Instead of just excluding the for-profits, which many people do, she also excludes private non-profits.  It’s an ambitious, even audacious, move that I’m not sure I buy, but it’s a worthy provocation.  

Boundary confusions make some old certainties harder to sustain, but that’s not necessarily a bad thing.  They often hid as much as they revealed.  Instead of the usual sweeping categorical judgments, maybe it’s okay to start noticing spots of unexpected quality in unusual quarters, and spots of unexpected shadiness in ostensibly pure places.  For-profit programs at non-profit universities?  Unions at for-profits?  They’re there; it’s time we notice.

Comments:
I just got done reading Kevin Carey's article and WOW! the comments in the tread started by "graddirector". (Append #comment-1348604582 to the URL in Dean Dad's article to make it easy to find.) That is a real warning to students about going to a "nothing special" MS program at a seemingly respectable university.
 
Non-profit does not mean the institution is not making a profit or can't make a profit. It means, the profit they do make, are kept within the institution. It is not disseminated to the owners or stockholders, like it is in for-profit institutions.
 
In the non-profit world, overall "profits" go by the name of "retained surplus," and the amount of that is fairly tightly regulated by the IRS.

At the program level, "profits" (if you will) are fairly common in the non-profit world, and are used to cross-subsidize activities that do not cover their costs (see: hospitals, imaging centers). I don't regard the existence of cross-subsidies to be a bad thing; indeed, they can make possible the continued existence of other programs (see: hospitals, burn units) that basically cannot cover their costs.

Where I would agree is that the creation of programs that (a) generate surpluses and (b) are mediocre is a problem--largely because of (b), and not at all, really, because of (a).
 
After reading the rants on the IHE version of your adjunct article, I am tempted to point out that you could view classes taught by adjuncts as the "for profit" part of a CC. But the same can be said for large lecture classes, even when taught by a full-time prof. They help make small composition classes feasible, classes even those of us in the sciences rely on to give us students who can write a logical paragraph.
 
I just cannot agree that there exists a for-profit undergrad business model that isn't based around exploitation of students.
 
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