THERE used to be three near-certainties about higher education. It was supplied on a national basis, mostly to local students. It was government-regulated. And competition and profit were almost unknown concepts. As most education was publicly funded, the state had a big say in what was taught, to how many and for how long. Insofar as it existed at all, competition was a gentlemanly business; few educators thought much about customers, fewer about profit.
Another week, another transaction involving a for-profit online college. The latest: A private-equity group is buying Northcentral University, an all-online institution founded in 1996 and now...
The head of Britain's first for-profit university college was paid £738,000 ($1,177,000) in one year, while the co-chief executive officer of the firm’s U.S. owner has a long-term pay deal valued at £15.8 million ($25.2 million).
But the for-profit college industry, currently under investigation by a bipartisan group of 23 state attorneys general for fraudulent practices and shoddy programs, is accustomed to earning billions without any accountability. So they fight every reform tooth and nail, and they often get their way, because they back up their expensive lobbyists with piles of campaign cash.
Rasmussen College is a relatively small fish that prefers small ponds. That may be why the for-profit chain is sitting pretty compared to many of its higher-profile peers.
For-profit colleges like ITT, DeVry, Kaplan, and the Art Institutes — sometimes called subprime schools because they leave many students deep in debt while taking billions of dollars from taxpayers — continue an expensive lobbying push to influence Congress and avoid accountability. Republic Report has received a 2011 draft strategy memo by the biggest for-profit college trade association, APSCU, outlining a plan to keep taxpayer money flowing to poorly-performing schools and to derail investigations of fraudulent activity.
Many for-profit colleges also still enroll students without diplomas, and the new regulation has caused concern, said Steve Gunderson, president of the Association of Private Sector Colleges and Universities.
Colombia is experimenting with more public-private partnerships in higher education in an effort to increase student enrolments through private sector expansion. But allowing for-profit universities is still highly controversial and opposed by students and university rectors alike, according to the country’s former education minister Cecilia María Vélez.
Laureate Education Inc, a for-profit higher education provider that boasts former U.S. President Bill Clinton as honorary chancellor, is planning to launch an initial public offering, according to people familiar with the matter.
It's also because the newly expanded Post 9/11 G.I. Bill will pay colleges of all types around $9 billion this year to educate nearly 600,000 veterans, and virtually every school wants to expand its slice of that pie.