Education Is Important, as Long as You Pick the Correct Type

Profit used to be a good thing; it allowed companies to reinvest in their businesses, to lower prices and bring new products to market, to employ people, and enable those people to live comfortable lives. In the last few years, however, the word “profit” has taken a negative turn. It has gone from that which affords companies their ability to continue to operate to an affront to consumers, the result of greed. So it is not surprising that the mentality that profit is bad has crept into the realm of for-profit higher education.

Education is rarely thought of as a business. With so many universities operating with tax dollars subsidizing their every move and reports of large endowments in the news, it’s no wonder the concept of for-profit college is foreign to many. But there are many for-profit universities operating and educating people on campuses and in the privacy of the student’s homes across the country, and these institutions have recently become targets for criticism.

Why attack? The ostensible reason is concern over quality. In the past most for-profit higher learning institutions were Internet based and unaccredited. Neither of these facts are unknown to their students when they enroll, and neither are of any concern to anyone other than the students themselves.

Accreditation is a certification by one of many regional boards that makes transferring from one accredited university to another much easier by allowing for credits earned at one to count towards a degree at another. This system saves student’s money by assuring the classes they took at, say, a community or two-year college will count towards their degree should they transfer to a four-year school. Accreditation is like the popular club colleges and universities seek to join to be part of the “in” crowd, even though it’s not necessary in order to operate.

Normally the accreditation process takes years to muddle through, and a lot of money. In recent years, however, for-profit colleges have been obtaining accreditation by purchasing smaller, financially failing colleges that are accredited, thereby transferring that accreditation to the rest of the company’s educational institutions. It’s a smart business move considering the regional boards that accredit institutions of higher learning allow this practice, though some are now instituting restrictions such as wait times before accreditation transfers. The only changes to the institution are ones of ownership and a significant expansion of the student body, a desired outcome for any struggling company dependent upon consumers voluntarily choosing their service, and an expansion of student’s ability to attend classes online from anywhere, not just limited to a geographic campus. It’s a win for students who get more options to choose the educational institution that is right for them and the method of attending classes that best fits their needs.

So why are some crying foul now that ITT Educational Services has purchased failing Daniel Webster College? By all accounts Webster was going under, the debt-ridden college was unable to attract enough students to pay their bills, but they had accreditation. ITT saw an opportunity and took it, obtaining the college, keeping their current student body’s education intact, and brightening the now secure future of Daniel Webster College.

Business Week recently ran an article entitled “Your Taxes Support For-Profits as They Buy Colleges,” that tried to make the case that ITT and other such companies were getting rich off of tax dollars rather than market forces, but that headline was hardly accurate. The article mentioned the increased amount of financial aid students at ITT would be eligible for but failed to point out that they would get none of it unless they were able to attract financial aid eligible students to their institution.

The article states that when ITT, or like institutions, acquire failing accredited colleges, “Typically, the goal is to transform the schools into online behemoths at taxpayer expense.” Were they lining up for grants and giveaways, sure, that case could be made. But they’re attracting more low-income and military students that are financial aid eligible, not suckling the government teat.

Serving an underserved population is the stated goal of much of what government is attempting to do, particularly in the area of broadband Internet access, so why deem for profit colleges unworthy to serve this population?

Aside from the fact that profit has been turned into a four-letter word of late, there may be another – unions. While most public sector colleges are staffed by tenured union members, these new entrants into the field are generally not, and nothing makes some people angrier than a non-union workforce competing with a unionized one (just ask Wal-Mart).

So if this trend of attacking for-profit institutions of higher learning continues, keep in mind the following: 1 – No one is forced to attend them, students choose to do so. And low-income students are entitled to financial aid. 2 – Profit is not a bad thing, and it must be earned. 3 – What is the motivation of the person making the accusation? Could it be competing institutions that don’t want the competition, or union supporters whose only concern is increasing their dues-paying members? As with anything, when the “what” is exposed as bogus, the “who” and “why” become all important. Something to keep in mind…