Kaplan, the for-profit higher education provider, is to offer tuition for external University of London degrees in a direct echo of a model for widening participation suggested by universities and science minister David Willetts.
But today they are facing two imminent threats to their near-monopoly of higher education. The first is the expansion of educational providers that exist solely on private support. The second comes from the small but growing efforts of for-profit universities, heavily influenced by commercial education ventures in the United States.
It seems too good to be true, at least for companies. Customers arrive at for-profit colleges by the million. With them comes billions of dollars of federal student grants and loans, to be poured into corporate coffers. Public subsidies may provide up to 90% of revenue; the government bears the risk of loan defaults. This business model has served firms rather well. Its effect on students and taxpayers is less clear. This summer, however, a brawl over for-profit colleges has exploded at last.
Stanley H. Kaplan started his tutoring business in the basement of his parents’ Brooklyn home in 1938. As standardized tests became a bigger fixture of American education, his company became a national operation, preparing millions of students for the SAT, LSAT, MCATs and other tests.
The number of college students who defaulted on their federal student loans climbed in the fiscal year that ended in September 2008, according to new government data released Monday.