The Sector

  • According to the Department of Education, “the number of students within the postsecondary education industry is expected to grow by 15%-23% to approximately 17.7-18.8 million students by 2013”.
  • While the for-profit education industry only comprises less than 10% of this burgeoning market, the potential for growth is substantial.
  • Most analysts are basing this on U.S. market alone; the international market and opportunities are even greater.
  • The National Economy
    Poor nationwide economic conditions are favorable for existing companies and provide open doors for new entrants. This market has flourished not necessarily in spite of, but in some ways because of the sluggish economy and unemployment.
  • Many workers who lost their jobs in the current recession needed to retrain to market themselves.
  • Minorities and first-generation Americans are realizing that post-secondary education is fundamental to financial security. The for-profit market has specifically focused on these needs for these people.
    • Differentiation
      For-profit schools attempt to differentiate themselves from not-for-profit schools in at least three key ways: in the types of students that they target, in the courses they offer, and in the convenience and accommodations they extend to their students.
  • Target students – Traditional universities and colleges were designed to fulfill the educational needs of conventional, full-time students ages 18 to 24, who remain the primary focus of these universities and colleges.” In contrast, for-profit schools focus largely on “working adults” in age ranges beyond that.
  • Many institutions provide training and education that is specifically aligned with the skills and education needed in the current business environment.
  • The number of students choosing online degree programs is directly proportional to longer, more intense, high demand work weeks and schedules that U.S. companies are placing on their employees. “The Department of Education (DOE) estimates that the number of degree-seeking students taking online courses will grow at a compound rate of 33% per year during the next several years.”
  • The for-profit industry has a unique curriculum and structure position to target and market to the demographic groups unable to participate in the traditional classroom.
  • Convenience – In contrast to traditional not-for-profit institutions, for-profits generally maintain several campuses, and offer courses in the evenings, on weekends, and online both synchronously or asynchronously (on-demand), to accommodate their “working adult” target markets.
  • A study done by the Hudson Institute and published in its comprehensive report, “Workforce 2020,” found that colleges are largely inflexible in responding to labor market demands because of funding mechanisms and tenure systems. This lack of responsiveness to market conditions could account for the growth in enrollment in proprietary post-secondary.

The following are results from survey conducted by Americans for Democratic Action:

  • Americans value a college education now more than ever. They know a degree is the new threshold for achieving the American Dream, and they know the country’s future depends on more graduates and their innovations.
  •  The public has a positive view of traditional as well as for-profit colleges and universities. They have a better sense of the work of traditional schools, but they think for-profit schools are doing an excellent or good job educating their students. They want a variety of institutions out there including community colleges and
  •  for-profits to offer the most opportunity to students and workers. People believe for-profits offer critical flexibility.
  • The biggest support point, other than cost, is that for-profit colleges and universities serve non-traditional students who cannot attend college fulltime on campus and underserved communities that may have received a poor education earlier in their life.
  • The public does not buy arguments that for-profit colleges and universities exploit their students. Instead, they believe these institutions play a powerful role in making a college education more accessible to non-traditional and underserved students.
  • Nor do Americans buy the attacks that for-profit schools provide a lower-quality education, though standards are important.
  • The tax dialogue helps promote for-profit colleges and universities, since the taxes they pay help to offset the federal tuition aid their students receive.
  • Voters support allowing for-profit colleges and universities to expand their reach and serve more students. They soundly reject the notion that these schools should be stopped and that their growth should be hindered, and many are willing to make it a voting issue.
  • In the end, as more and more non-traditional students return to college, the vast majority of Americans understand that for-profit colleges and universities are a good option for these students because they offer more flexibility and the opportunity to earn a degree that they would otherwise not have.

Serves Different Students: For-profit universities have an open enrollment policy that offers a post-high school education to many underserved communities – like African Americans and Latinos, who have often been shut out of other four year colleges, or students who may have suffered at a lower-performing high school, but can excel in college if given the opportunity.

We shouldn’t deny those students the opportunity to earn a college degree and become more employable.

Flexibility: Online for-profit colleges and universities offer students the flexibility they need to be successful and earn a college degree. These universities are tailored to an individual’s work demands and lifestyle. They allow students to attend classes full-time or part-time, and do their course work from home, from their job, or at the college by offering online classes and classes at nearby campuses. That flexibility makes a degree more of a reality for many students.

Infrastructure for President Obama’s Goals: For-profit colleges and universities have access to the money needed to expand and have developed the infrastructure needed to grow rapidly without lowering their educational quality. State taxpayer-funded schools, however, face tightening state budgets and higher tuition rates. Because of this, for-profit colleges and universities are better prepared to enroll the millions of new students looking for a college degree and affordable education. If we relied on ONLY taxpayer-funded schools, many students would miss out on the opportunity.

Competitive in 21st Century: To be competitive with countries like India and China in the 21st century economy, the U.S. needs a more dynamic and flexible workforce that is unafraid to learn new skills and switch jobs and careers. This is a different economy—not one where you could work the same job for the same company for 20 years as many people used to do.

For-profit universities allow more people to gain the new skills they need which will keep the U.S. competitive with other countries in this changing economy.

Technology: Many of these for-profit colleges and universities are pioneers in bringing technology to America’s education system. They were among the leaders in using 21st century technology tools, such as online campuses, that link students to their university or college even though they may live further away. And, they help link students who work in the day but can attend an online class in the evening.