Home Business of Education “For-Profits Thrive, While Universities Decline”

“For-Profits Thrive, While Universities Decline”

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An article with the above title was recently published in the Daily Egyptian, Southern Illinois University’s student newspaper.  Authored by Madeleine Laroux, the article discusses a report provided to SIU’s Board of Trustees at a September meeting.  According to Laroux, Paul Sarvela, Vice President for Academic Affairs, stated that the for-profits are growing at a substantial rate but don’t offer the level of service that the traditional universities offer.  Instead, they’re enrolling the working adult and focusing on marketplace demands.  Chancellor Sam Goldman added, “We are not appropriately compared to a for-profit.  We provide a value-added education and some people want that, many people don’t.  It depends on where you go.”

I think there are two telling comments in the above narrative.  The first is Vice President Sarvela’s comment about for-profits enrolling working adults and focusing on marketplace demands.  I wonder why SIU isn’t interested in that?  Working adults may understand the value of a college education more so than a student just out of high school.  Focusing on marketplace demands sounds important in most businesses.  Imagine if American automakers had focused on the marketplace demands when the Japanese automakers entered the U.S. market.

Chancellor Goldman stated that SIU provides a “value-added education” which “some people want” and “many people don’t.”  That sounds like a reverse way of noting that for-profits are focusing on the market demands and SIU isn’t.

The growth rate of for-profits is due to a number of factors including (1) their focus on working adults, a traditionally underserved population in higher education, (2) their focus on meeting the needs of the market, and (3) their tuition-driven economic models.  Just as there are differences among non-profit institutions, there are differences in mission and economic model among for-profit institutions.  Regardless of whether or not an institution pays taxes or receives subsidies from taxpayers, it’s becoming increasingly obvious that those institutions that pay attention to the higher education marketplace are thriving.  Those who may have focused internally rather than externally may be looking at a steep learning curve.

Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston was appointed to the National Advisory Committee on Institutional Quality and Integrity by the U.S. Secretary of Education in 2019. He also serves as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), as a Trustee of The American College of Financial Services, as a member of the board of Our Community Salutes - USA, and as a member and chair of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.

Comment(3)

  1. Wally:

    This is my doctoral alma mater and I know Paul Sarvela. I agree with your assessment of their comments. SIU is still stuck in the traditional brick and mortar track and has difficulty moving into the real marketplace. I don’t think they really want to, either. Part of the university is market driven and doing well (Technical programs, flight school, and allied heath among others.) The “regular” university is still caught in the bottoms in chairs mentality and the somewhat arrogant attitude that SIU is a “public ivy” which must defend itself again those upstart for profits. (In their minds it’s understood that for-profits have inferior programs.) Alas, the SIU-type universities are losing students because of their ignorance, for the most part, of the real world and the needs of the students/marketplace.

  2. sir –

    I wanted to say how much I appreciate going to a for-profit school. I’ve seen the levels of red tape traditional universities bury their students in. As a former military member and a grown adult with a full time job, I honestly don’t want (and can’t afford) to pay a school for the privilege of filling out reams of paperwork or struggling to get in contact with my student adviser. To my relief I found AMU, based on a profit model, to have stripped the sign-up process down to the necessary elements and the advisers to be quick to respond. Because the school is fairly young and based on a profit-driven model, it needs to remain competitive more than it needs to impress new students with pomp or tradition; the experience from a customer point of view is vastly improved.

    I know the concern is that a university which exists as a for-profit organization could become tempted to provide degrees to students who do not actually meet the academic qualifications simply to keep the revenue stream coming in; but I’ve found the separation between money and education seems quite thorough in AMU. The classes are sufficiently challenging, the requirements quite firm, and from a student point of view it’s a relief to feel that the school I’m going to is respectable. It’s good to know I’d honestly be able to defend AMU’s practices in conversation.

    I understand the place of the traditional university; the advances that universities come up with in science and the research they perform in other fields are an essential part of our society. Those places are for a specific sort of person, though; I’m a long way from looking to find the cure for cancer. Like the vast majority of college students these days I’m looking to improve my basic education, to become more competitive in the job market and – on a personal level – to prove to myself that I can get a degree. As my old boss would say, the right tool for the right job. Profit-driven universities are the right tool for one job, non-profit universities are the right tool for another. So – Thank you.

  3. For-profit educational institutions play a big role in my county, so I pay attention to them.
    After reading both the article and your post, I’ve formed a different question: how do for-profit institutions address the question of student development? It seems that this is what Goldman was implying when he referred to the programs of traditional schools as “value-added education.” He and his ilk must be careful of that characterization because the market suggests what’s value added, and it is suggesting that he might be wrong.

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