Why For-profit and Non-profit Colleges Behave Differently

[sanantone]

What do you think about these two articles? Franklin University will, obviously, have some bias because they're a nonprofit, but they do have statistical facts. The Huffington Post article talks about the concept of non-distribution constraint and why for-profit colleges are more likely to cut quality for more efficiency and growth. 

https://m.huffpost.com/us/entry/5595903
https://www.franklin.edu/blog/non-profit...ed-to-know

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The author of the Huffington Post article argues that non-profit colleges are more regulated than for-profit colleges.

https://cdn.americanprogress.org/wp-cont...ection.pdf

The former president of University of Phoenix wrote a rebuttal to this paper, but he's not against increased regulation. He actually thinks it's necessary.

http://www.insidehighered.com/views/2014...y3L9D.dpbs

[eriehiker]

I think that there are a lot of chicken-and-egg situations in our country right now.

Sometimes companies perform well because the economic/legal system is constructed well and the individuals within the company can work and produce at maximum efficiency because the system is constructed in an efficient manner.  In this situation, it doesn't really matter what the individuals think or the skill sets involved.  The system fosters success.

Sometimes companies perform well because individuals love the company and believe in the company.  In this case, it doesn't matter much what the rules and system are because the individuals involved have made an a priori decision that it will succeed and will stop at nothing to make it so.  In this case, the system is kind of irrelevant.

So is success because of a well-constructed system?  Or is it because the people have decided before anything has happened that an effort will succeed?

I think that the non-profit educational system is probably not constructed very well in a system sense.  However, the individual professors, etc. are almost completely committed to the system.  Why else would a professor become a professor?  The chances of landing a job are terrible.  The education and expense to achieve a position are bad.  The only thing that explains it is that the individual loves learning and teaching and will stop at nothing to make the system work.  In this case, the educational outcomes are relatively good for the student and this is reflected in the quality of student produced.  Companies see this in hiring and workplace performance.

Now, take that same person.  They have spent their lives sacrificing for the greater good and then they don't get a job at a traditional university.  They are able to get a job at a for-profit school.  They probably don't believe in it.  They know that the ultimate goal is not really education or learning, but profit.  I think that this results in an a priori decision that the organization will fail.  I think that this is what has happened at non-profits.  The quality of the students produced is, consequently, not as good and hiring decisions in the job market reflect this.

My thoughts on this are influenced by what I see at the k-12 level with charter/public schools.  There is pretty much NO ONE who decides to leave a public school to get a job at a charter school.  The pay is terrible.  Teachers know that the people at the top are motivated ultimately by cash rather than students.  That permeates the organizations.  Even conservative teachers leave charter schools at the first chance to get a job at a public school.  That is just the way it is.  It is an a priori decision and people can reform all they want, but it is not likely to change.

Oh, and this is why I think that the stock market under Trump has performed well.  Investors are people who would disproportionately have supported Trump anyway, so they keep pooling cash in the market.  They didn't look at the metrics.  They just have an a priori belief that things are good and the market reflects that even if reality doesn't match.

Note: Other reasons for market performance include piss-poor interest rates in "safe" investments, but you get the idea.

[sanantone]

The stock market has been doing very well for years now. Aren't charter schools nonprofit?

[Life Long Learning]

The article is slanted in many ways.  Should have compared Public vs Non-Profit vs for-Profit.

Some Public Universities "in-state" tuition and fees: $22,000 (CWM).  

University of Vermont (Public) $664/SH vs Excelsior (non-profit) $510/SH vs Capella (For-Profit) $425/SH.

Non-Profit does NOT mean no profit.  Think Excelsior College and the Ivy League.

My Harvard private non-profit college Executive Educations (EE) Certificates are $8,800/week.  MIT is $14,400/8-days. Are for-profits that expensive?


I am no fan of for-profit college, but I am not into slanted articles either!

[sanantone]

The article is slanted in many ways.  Should have compared Public vs Non-Profit vs for-Profit.

Some Public Universities "in-state" tuition and fees: $22,000 (CWM).  

University of Vermont (Public) $664/SH vs Excelsior (non-profit) $510/SH vs Capella (For-Profit) $425/SH.

Non-Profit does NOT mean no profit.  Think Excelsior College and the Ivy League.

My Harvard private non-profit college Executive Educations (EE) Certificates are $8,800/week.  MIT is $14,400/8-days. Are for-profits that expensive?


I am no fan of for-profit college, but I am not into slanted articles either!

The articles aren't about outliers. Capella is on the quarter hour system, so it's not as cheap as you think it is.

There is not one for-profit that offers nearly as much non-loan aid as Harvard does. Harvard graduates also graduate with less debt than the average for-profit college student. Some are just wealthy; others received amazing financial aid packages.

[eriehiker]

Charter schools are both for-profit and non-profit. Sometimes they are straight-up for-profit and sometimes a non-profit shell contracts the actual operations to a for-profit. Of course, Michigan is a particularly draconian state, so maybe I am only seeing the seediest charter underbelly.

[Life Long Learning]

Charter schools are both for-profit and non-profit.  Sometimes they are straight-up for-profit and sometimes a non-profit shell contracts the actual operations to a for-profit.  Of course, Michigan is a particularly draconian state, so maybe I am only seeing the seediest charter underbelly.

I think I read where Oregon HS Charter Schools have to run on 85% of the cost and are non-profit.

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The article is slanted in many ways.  Should have compared Public vs Non-Profit vs for-Profit.

Some Public Universities "in-state" tuition and fees: $22,000 (CWM).  

University of Vermont (Public) $664/SH vs Excelsior (non-profit) $510/SH vs Capella (For-Profit) $425/SH.

Non-Profit does NOT mean no profit.  Think Excelsior College and the Ivy League.

My Harvard private non-profit college Executive Educations (EE) Certificates are $8,800/week.  MIT is $14,400/8-days. Are for-profits that expensive?


I am no fan of for-profit college, but I am not into slanted articles either!

The articles aren't about outliers. Capella is on the quarter hour system, so it's not as cheap as you think it is.

There is not one for-profit that offers nearly as much non-loan aid as Harvard does. Harvard graduates also graduate with less debt than the average for-profit college student. Some are just wealthy; others received amazing financial aid packages.

OK, Capella would be $638/SH then and still cheaper than some Public colleges like Vermont $664 or CWM $733.  My point is it's not excessive?  The terms are sometimes meaningless.

The low graduation rates are what is bad.  Financial aid is also a different factor.  Tuition is just one of many factors.

[sanantone]

Someone on another forum brought up a point that was also mentioned in the research paper. A board of trustees is put in place at nonprofit educational institutions and at many hospitals because it's hard for consumers to quickly and accurately judge quality in these areas.

Think of how complicated cars are and how most people have little understanding of them. This is why it's so easy to get ripped off at auto repair shops. Now, apply that to education and medicine. I wasted thousands because veterinarians misdiagnosed my dog, and these clinics were owned by large, for-profit companies. I took my dog to an independent clinic, and she was finally accurately diagnosed and treated. This also happens with humans. How do they know when they're being misdiagnosed or not given appropriate treatment?

When I went through the parole officer academy, we had regular and guest instructors. Several times, they would give us inaccurate information. Since I've worked in the CJ field for a long time and have studied it extensively, I could tell when they were wrong. I would wait until a break and tell them so that they could correct themselves later. The other trainees were usually clueless because most had never worked in CJ, and most didn't even study CJ or law in college. This is how it is at colleges. Students often don't know when they're not receiving a quality education.

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Charter schools are both for-profit and non-profit.  Sometimes they are straight-up for-profit and sometimes a non-profit shell contracts the actual operations to a for-profit.  Of course, Michigan is a particularly draconian state, so maybe I am only seeing the seediest charter underbelly.

I think I read where Oregon HS Charter Schools have to run on 85% of the cost and are non-profit.

---

The article is slanted in many ways.  Should have compared Public vs Non-Profit vs for-Profit.

Some Public Universities "in-state" tuition and fees: $22,000 (CWM).  

University of Vermont (Public) $664/SH vs Excelsior (non-profit) $510/SH vs Capella (For-Profit) $425/SH.

Non-Profit does NOT mean no profit.  Think Excelsior College and the Ivy League.

My Harvard private non-profit college Executive Educations (EE) Certificates are $8,800/week.  MIT is $14,400/8-days. Are for-profits that expensive?


I am no fan of for-profit college, but I am not into slanted articles either!

The articles aren't about outliers. Capella is on the quarter hour system, so it's not as cheap as you think it is.

There is not one for-profit that offers nearly as much non-loan aid as Harvard does. Harvard graduates also graduate with less debt than the average for-profit college student. Some are just wealthy; others received amazing financial aid packages.

OK, Capella would be $638/SH then and still cheaper than some Public colleges like Vermont $664 or CWM $733.  My point is it's not excessive?  The terms are sometimes meaningless.

The low graduation rates are what is bad.  Financial aid is also a different factor.  Tuition is just one of many factors.

Cost is just one problem, but CWM is still an outlier. 99% of public universities don't cost anywhere near $20k in tuition. The typical cost is half as much. In general, for-profits are more expensive. Now, private non-profits are more expensive than for-profits, but they generally have higher graduation rates and lower student loan default rates.

[eriehiker]

In my state, Michigan, 7 out of 10 charter schools are for-profit organizations.  I know this from personal experience because I interviewed at a bunch when I first looked for a teaching job.  These were some of the worst places that you could imagine going to school.  This was 20 years ago, but the same companies that I interviewed with are still the big players in the business so I don't think that they are much different.  Also, here are some links with info. about how terrible these schools have performed:

https://www.freep.com/story/news/educati...393071001/

https://www.nytimes.com/2017/09/05/magaz...93&gwt=pay

Other states put limits on for-profit charter schools, but many of the "non-profits" serve as shells for for-profit educational companies.  Forbes did a nice job of providing information on how to profit from "non-profit" charter schools:

https://www.forbes.com/sites/petergreene...b9b27e3354

In Michigan, Eastern Michigan University served as the non-profit shell for many for-profit and, later, failed charter schools.  A Native American tribe also served as a non-profit shell for for-profit non-reservation charter schools across the state.

https://www.freep.com/story/news/educati.../96720276/

https://news21.com/columbia/2009/indexdc22-p=143.html

Just to balance this a little bit, one of my first jobs was at a public school chartered by the State of Illinois called the Illinois Math and Science Academy.  It is an incredible place and shows how alternative educational avenues can be incredibly successful:

https://en.wikipedia.org/wiki/Illinois_M...ce_Academy

However, pretty much everything that I see tells me that for-profit public K-12 charter schools are BAD, BAD, BAD and that non-profit charter schools are often only technically non-profit.

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One last bit:  The rise of charters has pretty much tracked the decline in Catholic schools.  Catholic schools have been and are very good, so this trend is very, very bad.

[dfrecore]

My thoughts on this are influenced by what I see at the k-12 level with charter/public schools.  There is pretty much NO ONE who decides to leave a public school to get a job at a charter school.  The pay is terrible.  Teachers know that the people at the top are motivated ultimately by cash rather than students.  That permeates the organizations.  Even conservative teachers leave charter schools at the first chance to get a job at a public school.  That is just the way it is.  It is an a priori decision and people can reform all they want, but it is not likely to change.

Oh, and this is why I think that the stock market under Trump has performed well.  Investors are people who would disproportionately have supported Trump anyway, so they keep pooling cash in the market.  They didn't look at the metrics.  They just have an a priori belief that things are good and the market reflects that even if reality doesn't match.

Note: Other reasons for market performance include piss-poor interest rates in "safe" investments, but you get the idea.

In CA, I know MANY teachers that have worked for charter schools for 20 years and make $70k.  At my kids' schools, the teachers are well-paid, and many would NEVER go work for a "public" school (charter schools here are public schools).  They like that the schools are very strict, have a strict dress code, kids are well-monitored, and there are no discipline problems like you see in regular public schools around here.  They also are non-common-core, so they don't spend a majority of their time doing a ridiculous amount of paperwork; rather, they spend time doing what they love, which is teaching.  They have a Great Books program rather than "Language Arts."  They read a ton of great literature, memorize poetry, and the kids love it because they have Socratic discussions instead of writing papers (they have a separate Academic Writing course to do that in).    There are tons of jobs available here for teachers, and yet most seem to stay put in whichever school they're at - not tons of turnover that I've seen.  So I think you're extrapolating what may be going on for you locally does not work - it's different everywhere you go.

I think the stock market under Trump has performed well because he's pushing deregulation and creating an environment where companies, and therefore workers, can thrive.  Cutting taxes has almost always helped the stock market.  He's also talking about reporting less often, because many of the problems with companies these days is short-term thinking based on short-term (quarterly) reporting.  Many of the top companies have started saying "we'll report because we have to quarterly, but we will think longer-term because it's best for the company long-term."  They've decided not to be slaves to shareholders.