• April 17, 2014

For-Profit Colleges Are Projected to Sharply Increase Their Share of Adult Students

For-profit universities will have 42 percent of the adult-undergraduate market by 2019, nearly doubling their current share, according to a new study by the consulting company Eduventures.

Last year approximately one-quarter of all adult undergraduates were enrolled at for-profit universities. The study projects that, in the next 10 years, for-profit institutions will increase their share of the adult market by 14 percentage points.

By that time, for-profits will lead both public and private universities in the number of adults enrolled. They will have approximately 60,000 more adult students than will publics, and 800,000 more than privates.

(Currently, the for-profit sector educates about 7 percent of the nation's roughly 19 million students who enroll at degree-granting institutions each fall, The Chronicle reported recently.)

Richard Garrett, a managing director at Eduventures, credited for-profit universities with uncovering new markets for adult education, including the offering of online courses.

He predicted that online education, in which for-profit universities are "vastly overrepresented," will become the norm for adults seeking bachelor's degrees.

"The two have enabled each other very strongly," said Mr. Garrett. "Online is gaining more momentum in terms of respectability."

Copies of the report are available to Eduventures clients.

Comments

1. jrb244 - June 14, 2010 at 04:30 pm

Non profit universities normally have signifantly lower tuition rates and, if they could release some of their "old school" methodologies such as scheduling traditional day classes when adults can't attend, sticking to long semester terms when adults need a faster pace, etc., they might be able to compete with or exceed this trend. I've worked in education administration for over 25 years, always for non profit, regionally accredited colleges and universities. I received a graduate degree in Business from one of them but am floored by how little of what I learned is applied. Change is slow and tedious. Today's world does not move at that pace. For example, I work in the 5th largest city in the United States which is also the seat of the state's government. Unfortunately, I work at a branch campus two hours from the main university. When we sought to add local MBA and MPA degrees our graduate options, the School of Business at the main campus refused to budge. Reasons were more about protecting their faculty and resources than student need or educational access. Sad. For profit schools, which in many cases have the same regional accreditation as their state counterparts, cut out a lot of red tape for their students and provide excellent service. I suspect the eductional/instructional (the school's purpose) part of for-profit education is not as high quality or as rigorous as a student would receive at a traditional community college or university. But most students don't know to ask those kinds of questions, some may not care, or they may opt for the easier route. Many students attend for-profits without knowing the difference between National and Regional Accreditation only to find out that their transfer credit is not equivalent or employers don't acknowledge the education. Surely traditional, non profit private and state colleges and universities can figure out how to keep their educational quality while meeting the needs of today's student populations.

2. 22216726 - June 14, 2010 at 04:32 pm

Interestingly, that a "research" organization under the direct influence of the "for-profit" community would conclude such findings. Objective??

Wonder IF the rate of debt accumulated by the projected growth in student #'s will correspondingly increase along with the default rate on scarce federal financial aid??

Or, is this just another marketing ploy to attempt to influence federal legislation at a critical point in the dialogue...ummm. Yes, the saga continues with our friends in the "for-profit community...

3. director19 - June 14, 2010 at 05:58 pm

Don't wonder. What they call this is custome service.

Also, in many instances, the instructors teaching at a for profit is also teaching the same course, same curriculum, same text as the local college.

There are instances both ways, good and bad, of lousy teaching. No sector has immunity from this. Many of my college professors were awful. Many were good; some were great! It's the same in proprietary education.

The great part of proprietary education is that we teach "real world" application as opposed to straight theory. And all of our teachers have "real world" experience in their field. This very fact alone makes the educational process at for profits far more relevant. In my college experiences, only one teacher I ever had had had a job in other than teaching.

4. richardtaborgreene - June 14, 2010 at 09:36 pm

For profit versus not for profit is a phony distinction (ever seen Harvard not trying to charge the maximum possible for every conceivable service?). It is in the end somewhat an accounting gimmick. BOTH types of institution are for profit but the faculty count a lot more at one in the profit equation than they do in the other (investors take their place). So we might call them for faculty versus for investor institution types--that makes things clearer, at least for me.

When as a student I go to a for investor institution I can be sure the faculty are the most efficient possible to obtain and use up. When as a student I go to a for faculty institution I can be sure the procedures applied to students are the most efficient possible.

So---do we abuse students for investors or for faculty? Which abuse is best for students? Well, since investors do not teach, having richer investors does not directly help students in value. Since professors, after all is said and done, do some things resembling teaching, institutions for them have a collateral side-benefit, un-intended in all cases, of having better paid and respected and intellectually-used people teaching courses.

One of god's little acts of divine justice is students stating how they appreciate "appreciate" courses without theory and therefore wholly applicable to jobs---such students deserve the crummy jobs they end up wholly applicable for. If you see easy application you get it---and god laughs all the way to his divine bank at the career and self understanding and family relations management costs of that attitude and accomplishment. God does have his/her little jokes at our expense. People are their own worst revenge, as my friend in high school used to say thinking of Iran.

5. rickw - June 15, 2010 at 05:32 am

The university at which I teach--a private not-for-profit--should be the picture of flexibility and responsiveness to the needs of working adults, not to mention traditional undergraduates. Yet is ineptly bureaucratic and cumbersome in all of its processes that impact students. Our adult programs, consequently, are experiencing a steady decrease in enrollment a trend that has been developing for years. Yet programs like business, criminal justice, and so on, are so wed to what they are comfortable with that we offer few programs online, and those that we do mirror the bureaucratic nature of our traditional offerings.

Nor can one engage in a discussion of how today's students learn. There is a lot of prattle about the value of the liberal arts, but that battle has long been over in a market focused on career expectations in an economy in which the average income of working Americans has long been trending down. For profits offer a direct, and mostly easy to navigate path, to a degree. We in the not-for-profit are reaping what we have become ball and chained to: a blind eye to change and the impact of technology. Until we decide to go hunting where the ducks are, we are screwed.

RockingBob

6. supertatie - June 15, 2010 at 09:53 am

Not-for-profit universities are all about offering what the faculty want to teach - and do research in - NOT what the students want to learn.

And while 18-year-olds are certainly NOT in the best position to know what they want or need to learn, I would argue that a 42-year-old single mom trying to get a better job to raise her three children, or a 36-year-old man attending college for the first time, most certainly IS.

NFP schools treat ALL students as if they are equally ignorant, equally inexperienced, equally flexible, and equally dependent on the institutions' hidebound culture and intransigent bureaucracy.

They are not.

Adult students (and by "adult," I mean over 22) have a much better understanding of what they want and need; they have other obligations (jobs, kids) that preclude them attending 15 hours of classes between 8 a.m. and 3 p.m.; and they have enough life experience to both appreciate theoretical courses and need fewer of them.

For-profit institutions are booming because there is a NEED for them. In Clayton Christensen's terms, NFP institutions are the established enterprises with sustaining technologies/products, and for-profits are the disruptors. All you have to do is read his book, "The Innovators Dilemma" to know where this will go.

And that, my friends, is behind the recent trumped-up indignation over "standards," and "gainful employment," and "tuition." It has precious little to do with "protecting students," and far more to do with protecting themselves from competition.

Adapt or die.

7. jaysanderson - June 15, 2010 at 02:47 pm

adapt or die...or legislate the for-profits out of business. Fortunately, though, they have grown too quickly to be killed. They are providing a service that many NFPs (like mine) refuse to offer.

8. riggan - June 16, 2010 at 01:04 pm

The current configuration of "for-profit" post-secondary is a house of cards, primarily as a result of their focus on profits. To that end we have seen an enormous growth in this sector based on increased access to student financial aid. The government supported student financial aid programs have created a wonderful windfall loop for private and for-profit post-secondary operators. The model always seemed to be appropriate as a mechanism to prepare "career" directed students needing flexible, portable "training" programs linked directly to employment.

It is the growth in "applied" programs that has attracted new or non-traditional students and this market has always been skewed toward for-profit operators. This combined with the for-profit's cycling of public dollars, through student financial aid programs, has created slick marketing strategies targeting people who "believe" that the offered educational and career programs will get them work and better pay.

The research seems to be based on the assumption that public largesse will continue to prop up these publicly traded corporate entities and student financial aid will continue to flow into for-profit post-secondary unchanged. I can't agee with this assumption. To the contrary I suspect the current system is a house of cards and governments will have to re-direct funding to more sustainable economic goals.

9. intered - June 16, 2010 at 04:22 pm

@riggan would be informed to know that federally guaranteed student loans are a profit center. This is why the feds took them back from the private sector. Innuendo that the taxpayer is losing money on these loans was circulated to provide support for a political agenda. Default rates are higher among the underclass irrespective of who is educating them. As our systems have evolved, for-profit career colleges and community colleges are the only providers who will take them. Both suffer relatively high default rates but not high enough to put the overall system in the red. For-profits educating primarily BA and higher have low default rates. Anyone who is logically committed to resting his case on the taxpayer's perspective will go after the public universities. They cost the taxpayer thousands of dollars more per student per year than any other delivery model, roughly $10,500, whereas the for-profits are in the area of a wash. They pay a dozen levels of taxes one the one hand (which gives them a negative taxpayer cost) but, for many of them, the contribution to default costs is higher (which takes back some of the taxpayer contributions).

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