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Introduction David W. Breneman The present volume had its origin in fin-de-siècle twentieth-century America, when the enthusiasm for anything new related to the Internet and to the teaching of skills required by the “New Economy” dominated discussions about higher education. Among the developments capturing attention in that frenzied atmosphere was the growth of for-profit, degree-granting institutions of higher education, the University of Phoenix (UOP) being the most visible member of a group that includes DeVry, ITT Educational Services, and Strayer. Traditional higher education, while highly competitive in its own way, was not used to competing with institutions oriented toward making a profit, and there was much worry and dismay within the traditional sector about this turn of events. Those who sought to transform traditional institutions found this new development useful in order to advocate change as required for survival ; others argued that the academy was being sullied, and that the academic profession was threatened by “barbarians at the gate.” Still others expressed surprise that institutions such as Phoenix could earn a profit when competing with state-subsidized colleges and universities, as well as private, nonprofit institutions with sizable endowments and the ability to raise tax-favored contributions from alumni and friends. What was lacking in much of the discussion at the time was a knowledge base about these relatively new institutions. The authors in this volume took it as their task to understand and learn more about these new entrants; to provide a conceptual framework for thinking about them; and to explore aspects of the new environment, of which these institutions are very much a part. It must be noted that this arena is rapidly developing and changing in ways that traditional higher education does not; hence, it is difficult to pin down specimens for study in a definitive way. While we have reached some tentative conclusions about the significance of these new entrants, we do not claim that our view is the only one possible, or that future developments may not alter our conclusions. Uncertainty is particularly strong regarding the eventual impact of distance learning and educational technology, where the shape of the educational future remains, to us, at best foggy. Before turning to ix brief introductions of the chapters that follow, it will help the reader to know what judgments we have reached. First, there is no question that the model of an accredited, degree-granting , for-profit college or university has been proven feasible, as well as highly successful financially. Concern that such institutions would necessarily exploit consumer ignorance to “rip off” potential students by providing poor quality in fly-by-night operations, while always a possibility and an occasional reality, does not typify the majority of accredited, degree-granting, for-profit institutions . Indeed, a moment’s reflection will suggest that any organization seeking to thrive in a market heavily influenced by word-of-mouth endorsements from existing customers has little incentive to defraud consumers. While state approval still remains an issue for some of the institutions in some of the states, we have no doubt that every state will eventually license those companies whose goal is to deliver educational services in this fashion. Second, we do not believe that for-profit institutions are a significant competitive threat to most of traditional higher education, despite views to the contrary expressed by some observers. (This conclusion could change if the financial circumstances of traditional higher education were to change, e.g., if state support for public institutions were to erode substantially.) Our findings suggest that most of these for-profit programs extend the market to students who, in many cases, would otherwise not enroll at all. This finding seems to be particularly clear with regard to the older, adult students who are a mainstay of many of these programs. Many traditional institutions have not viewed such students as a priority for recruiting and serving, thereby leaving untapped markets available for new entrants. It is also clear that for many traditional collegeage students seeking full-time residential programs, for-profit schools are unlikely to be included in their choice set. For example, the student applying to the Universities of Virginia, Duke, and Chapel Hill is unlikely to consider DeVry as a fourth choice. Having said that, it should also be noted that there are numerous programs where non-profit institutions have found themselves in competition with for-profits. Any college or university that does take part-time adult students seriously will find a...

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