Higher Ed, Inc.: The Rise of the For-Profit University (review)

Who needs for-profit corporations to run our colleges and universities? Aren't most universities too corporate already? ¹ Instruction at a four-year proprietary for-profit junior college where I once worked was so impressive, I was attracted by the author's paean to the teaching virtues of the corporate for-profits. Dean at nationally advertised De Vry Institutes of Technology, Ruch spent a couple of decades as English professor at various middle-tier non-profit institutions. I too have done stints at one for-profit private and three state universities. For-profits, he claims, constitute the only sector of American higher education that is growing.

What are the For-Profits?

They are higher education systems owned and operated by publicly traded for-profit corporations. Besides the author's own DeVry, they include Quest Education, founded in 1988, an aggressive acquirer of non-profit colleges and now with more than 30 campuses; Strayer University, University of Phoenix, Rider University, and Argosy Education Group. There are over 600 degree-granting for-profit colleges and universities in the U.S. that employ about 5% of all full-time faculty.

Critique of the Non-Profits

Although it is positive in tone, the book is really a critique of the non-profits. Unlike traditional colleges, the for-profits have no expensive residence halls, faculty dining facilities, stadiums, sports teams, or president's houses. Ruch seems needlessly generous, for he did not bother to mention that entertainment athletics are a major marketing tool for public non-profits because of their appeal to students, donors, and state politicians. He is proud that his colleges rarely offer release time for research and non-teaching activities yet he fails to distinguish between scholarship for publication and the kind of scholarship that nurtures good teachers. Stranger still, he seems unaware that research priorities in big universities can and do entice faculty there to neglect their teaching.

Most non-profits do earn a profit, he declares, but they quietly shuffle it among funds. Then too, there is much unacknowledged economic gain in many of the non-profits that takes the form of high administrator and star researcher salaries and substantial overhead charges on grants. The claim of traditional universities to a higher moral virtue, he suggests, seems to have grown out of their historic association with churches. Then too, the power of the faculty often encountered in non-profits may contribute to inefficiency and higher costs of operation. Equally irresponsible is politician power, trustee power or donor powerCall of which can be benign but often are not.

Effect on Institutional Purpose

The profit motive may have a positive effect on institutional purpose. For example, a for-profit institution will seek to utilize its facilities as efficiently as possible. A dean is more likely to spend his time attending to student performance, launching and managing new instructional programs and supervising the work of the faculty than his non-profit counterpart. In contrast, the non-profit dean is more likely to be consumed by representing the faculty to constituent groups, protecting turf and justifying the allocation of new resources. In for-profits, such chores are centrally managed and consume less time and resources.

Ethical Dilemmas

A characteristic of for-profits is that many students enroll because they have deliberately been sold on a particular program by college agents. This effort to recruit an indecisive prospect, Ruch contends, is often to the student's benefit. As a former representative of a proprietary college, I am aware that the ruthless and deceptive practices sometimes employed to meet competition can raise important ethical questions. The author, in his enthusiasm, tends to gloss over such matters. Nor are the public colleges pristine. Many of my students have been attracted by the state university sports corporation's football and basketball entertainmentCinstitutional features...