Education Industry Reporter

“For-Profits” vs. “Traditional” Schools – Does this distinction really matter anymore?

Posted in Department of Education, Higher Education News, Higher Education Policy

David P. Lewis

This new Grand Canyon University commercial is currently airing in the Phoenix market (and perhaps elsewhere).  It’s pretty eye-opening – if someone were to ask if they could show you a television commercial for a for-profit school, you probably would not have this in mind.  In fact, it looks a lot more like the school commercials that air on network television during halftime of NCAA college football and basketball games.  It’s also an accurate portrayal – I have been in all of the facilities shown and am also a GCU season ticket holder in their new 5,000 seat basketball and entertainment arena (shown in the commercial).

Why do I bring this up?  The Clifford-Shireman discussion highlighted in the post below occurs within the typical context of “for profits” versus “traditional” schools.  Necessarily, this context lumps all for-profit schools into a single category and makes all of these institutions responsible for the actions and quality of all of the other institutions in the “for profit” category.   Unfortunately, this context is the foundation for the regulatory regime that exists and the mindset of the regulators (and many legislators) themselves, as well as much of the public discussion regarding the higher education sector.

While it has been happening for some time, the GCU commercial demonstrates in a direct, visual way that these basic categories are crumbling and make less and less sense.   Back in 1968, when Congress amended the Higher Education Act and first included proprietary schools in the definition of “institutions of higher education,” it was looking at a group of institutions that largely performed vocational and non-degree training.  Over ten years later, in 1980, when Congress enacted the definition of proprietary schools that is, in many respects, the same definition as exists in the statute today, the situation remained largely unchanged.   According to data from the National Center for Education Statistics, in 1980-1981 there was a total of 3,231 degree-granting institutions in the United States, of which only 165 (or 5.1%) were proprietary.  The 18 proprietary schools that granted four-year degrees represented less than 1% of four-year degree granting institutions.  Fast forward to 2008-2009, and the landscape is vastly different.  In that year, the 1,104 proprietary degree-granting institutions represented 25% of all such institutions, and the 530 proprietary schools that granted four-year degrees represented 19.5% of all four-year degree granting institutions.   

The case for treating for-profit institutions as a homogeneous sector simply no longer exists.  Proprietary schools now include within their ranks ABA-accredited law schools, accredited medical schools, and numerous regionally accredited institutions that offer master’s and Phd. programs, all of which compete directly with programs offered at traditional institutions.  Many other proprietary schools that do offer career training programs are better at what they do than comparable state schools or community colleges.   And with the continuing move by traditional schools into online education and towards developing branch campuses, it is apparent that the category encroachment is going both ways.

Is now the time to think seriously about moving the regulatory focus away from rules that define “for-profit vs. traditional” and toward a regime that focuses on quality metrics, outcomes and relative cost based on the students’ needs?  In other words, if one could re-design the higher education regulatory framework based on today’s education landscape, and not the one that existed in the 1960s, would that framework be different?  And if so, what principles would guide that new framework?  With the reauthorization of the Higher Education Act approaching next year, now is the right time to begin considering this important topic.