Free Liberal

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For Profit’s Growing Market Share—Market Segmentation

by , Columnist, Free Liberal

In my last rant, I briefly mentioned the for-profit higher education sector’s enrollment growth at the expense of mainstream nonprofit and public education sectors in recent years. The references cited were not public relations’ hype from the for-profit sector’s lobbyists. The sources were the College Board and the National Center for Education Statistics— two of the higher education community’s most reliable objective data sources.

Loss of market share means loss of tuition revenue at time when it has become harder to rely upon federal and state largess. The non-profit establishment’s consternation over market share loss is understandable. Their response is not. The private non-profit and public higher education cabal with its mainstream higher education press allies have been gloating over the ethically suspect recruitment practices revealed by the GAO’s undercover secret shopper investigation. While some of the for-profit sector’s growth may be linked to questionable recruiting practices, this is also true for some of the not-for-profit institutions. The counterproductive character assassination of for-profit colleges in Congress and mainstream higher education press we are now witnessing, only serves to divert public attention from the from the more likely underlying cause of this growing shift in market preference.

The vast majority of the students electing to enroll in for-profit higher education institutions are not the gullible mass of willing victims that the non-profit higher education partisans imply. Rather they are perceptive consumers, who know what they want in educational programs and are willing to pay for the services and conveniences. Too often their needs are unrecognized at nearby public and non-profit privates.

My economist hero, Thomas Sowell has long noted that traditional higher education institutions are managed for the benefit of the administrators and faculty and not the students. Their programs are too often conceived and delivered for the convenience of the provider institution’s employees and not its customers.

College students are no longer that homogeneous cohort of 18 to 22 year olds pursuing their post-secondary education fulltime. The post-secondary market is heterogeneous. For example, data from the 2005 Community College Survey of Student Engagement (CCSSE) shows that a student at a U.S. institution of higher education is as likely to be in her 30s, taking care of dependents and working full-time as she is to be 19, in a sorority, getting financial assistance from the parental unit, and taking 15 credit hours a semester. More recent CCSSE report MAKING CONNECTIONS: Dimensions of Student Engagement states, “Most community college students are enrolled part-time. Many students, even full-time students, work nearly full-time. Thus, many community college students take classes at night and online.”

The American ideal of a post-secondary education for every citizen who may benefit must be pursued with imagination and flexibly. The for-profits have gotten right. Give them credit for serving student needs that have been too often ignored by the mainstream higher education.

About

William Patrick Leonard is Vice Dean of Academic and Student Services at the Solbridge International School of Business in Daejeon, Korea. He is Advisor on Higher Education Policy at the Rio Grande Foundation.