Earnings from Learning: The Rise of For-Profit Universities (review)

Entrepreneurial behavior is now very visible in the for-profit sector of higher education as well as in many initiatives of private and public not-for-profit institutions. The scholarly literature on the for-profit sector is less than 10 years old and little empirical work has been completed. This collection of articles focuses mostly on the for-profit sector but also includes chapters on entrepreneurial behavior in private and public not-for-profit colleges and universities.

David Breneman's introductory chapter is very compact but thorough, both in providing a general framework and fitting each of the eight chapters that follow into that framework. The six judgments that he makes here are: (a) The model of the degree granting for-profit accredited institution is feasible and financially successful; (b) For-profit universities are not tapping into the primary markets of most traditional higher education institutions; (c) The major growth spurt of for-profit universities in the United States has passed so there is not market room for any additional mega-institutions like the University of Phoenix; (d) Most traditional institutions still have lessons to learn from the for-profit universities about how to be more student centered; (e and f) Neither distance learning nor accreditation distinguishes for-profit universities from not-for- profit universities.

The observation on accreditation, however, does not directly take into consideration differences between regional and national accreditation. Breneman sees both sectors as viable and predicts that both will grow. Although there is overlap, each also has distinct niches. He believes that the regulatory environment is not, nor should it be, a significant obstacle to the growth of the for-profit sector. This volume's examination of the regulatory environment relating to for-profit colleges is very brief and confined to the federal level.

The body of the book is divided into three parts: "Theory," "Practice," and "Political Economy." In "Theory," three chapters address demand and supply conditions, higher education as an industry, and the role of the public good. Breneman, Pusser, and Turner present statistics on suppliers, degrees awarded, and the demographics of students. Some of the strengths of the for-profit sector are new technology, organizational practices, unbundled services, economies of scale, and low personnel costs.

Turner examines geographic areas of opportunity, fields of study, and the impact of economic downturns. Pusser describes the nature of the tension between public and private values and poses questions about how to ensure that higher education contributes to the public good. He raises strong concerns about maintaining higher education as a key site of access to leadership positions and to greater civic involvement. These concerns about preserving public purposes in a new environment require attention.

In "Practice," chapters provide one case study of a for-profit university and examine two types of entrepreneurial activity in which traditional institutions engage. Breneman provides a very well balanced analysis of strengths and weaknesses of the University of Phoenix as a poster child for the for-profit sector in areas including academics, governance, ethics, and economics. Dudley, Doane, and Pusser examine the summer sessions of public flagship institutions as an entrepreneurial component in which revenue and academic imperatives are balanced close to the academic core of the institution. Fisher analyzes the challenges for traditional institutions in exploiting new instructional technologies that are likely to be work facilitators but not necessarily economic facilitators in the short term.

In "Political Economy," two chapters address aspects of the environment in which institutions operate. Ortmann examines why Wall Street fell in love with the large for-profit universities that have built a market for themselves operating in the shadow of not-for-profit institutions. He finds for-profit university patterns to be relatively congruent with modern economic and managerial theories of firms and markets. In the final chapter, Pusser and Wolcott examine the political history of college lobbying including contributions...