Point of Clarification - Recent posts

A point of clarification. Lately, I've posted a number of notes in this forum on topics related to the profit status of DL programs. There have been lots of
notes back and forth in a variety of threads.

Please allow me to summarize what I am (and am not!) saying:

1. With respect to financials - I believe that non-profits have a distinct financial advantage over for-profits. Non-profits have additional revenue sources (namely gifts and endowments) that for-profits don't have. In some areas they are eligible for tax free financing from government bodies. For profits have to make a profit to satisfy their owners and face additional costs (such as property taxes and higher borrowing costs) that non-profits don't have. In one example I showed how a for-profit version of one non-profit would have to cut 20% of their operating expenses in order to make a 10% return on sales. Assuming tuition is set in an open market, for profits have to skimp on academic costs to make a buck. While non-profits aren't immune to financial problems and many have their share of financial mismanagement, their non-profit status gives them added financial flexibility.

2. With respect to academic quality and profit status - I'm not arguing that all non-profits are necessarily outstanding academic
institutions. They range from very good to very poor. In fact, I see many low end, RA non-profits that have succumb to cutting academic rigor in an effort to be "student friendly" and grow enrollment. On the other hand, however, I have yet to see a single for-profit with a strong academic reputation. In business, probably the most common DL degree area, are there any for-profits that have taken the time and effort to achieve AACSB or ACBSP accreditation? Take a look at any ranking list you choose to mention - US News, Gourman, Business Week, etc. Do you even see the for profits listed? As I see it the for-profits are focused on "open" (or nearly so) admission and run generally weak academic programs. They appeal to students on the basis of "accessible" and "easy to do without interfering with your life". You can earn an on-line MBA lots of places. Some of the non-profits are very good at this, some are poor. But I don't see a solid MBA offered by a for-profit school. It's your reputation - consider the educational value of the degree you earn, and not just the 3 letters after your name (e.g. MBA).

3. With respect to disclosure - I tried to respond to the concern that some "non-profits" have actually abused the non-profit statutes. In times past this was the case. Today, the IRS 990 disclosure opens up the books and make it difficult for someone to create a "non-profit" that really is a for-profit benefiting top officers. Yes, for profits that are publicly traded do have to disclose some details - but with all the mergers that have taken place (such as Argosy, DeVry and UoP), these institutions are so big you can't really see what is going on. Privately held for-profits can do anything they want and not tell anyone.

4. With respect to full-time versus part-time - I have no problem with colleges employing part-time faculty. They are truly an asset that can energize the classroom and bring a breath of fresh air to campus. Further, they give schools a degree of financial flexibility. Indeed, I spent 17 years as an adjunct and wouldn't have been hired full-time if I didn't have solid part-time credentials. But full-timers have a place. Who creates academic programs? Who advises students? Who conducts research that extends knowledge? Who governs the academic institutions? Who provides program continuity? Full-time faculty do all of these things in a "real college".

I believe that colleges, particularly those teaching business and other professions, should have a mix of full and part-time faculty. But when a recent NCA team was asked for the minimum ratio they believe was appropriate - they said 50% of course load should be taught by full-timers. They supported this notion by referencing two states that require the same in their licensing. In the corporate version the institution is run as a business, without faculty governance, academic freedom or tenure. The corporate for-profits that I see don't employ many full timers, instead splitting off their work to professional staff or contractors. I believe this is quite inappropriate and undermines the basic mission of colleges (namely to educate and extend knowledge). Sure - for profits have a "different" model - but back to point 2 - show me a for profit that has obtained national status in any ranking guide. You can't - because, frankly, viewed overall for profits are lower quality academic institutions.

5. With respect to UoP - my experience is too old to say any more. I'll let other posters (and the UoP "sucks" site) tell us their stories.

6. With respect to accreditors (like NCA, AACSB, ACBSP, etc.) - Some may think them old fashion and not "hip" to DL. But is it possible they may know some things that we don't? Like - how quality education needs to be conducted? If they say the lack of full-time faculty is an issue - I suspect that it is.

Regards - Andy


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Andy Borchers, DBA
NSU (1996)

 

Then why in the hell do non-profit organizations fill my mail box with tearful appeals for help, sobbing about how hard it is to survive as a poor struggling non-profit in a world filled with ruthless corporate giants? Are they lying?

I think that you are overstating your case, Andy. If non-profits had the comparative financial advantages that you claim they have, they wouldn't they be a lot more common in other industries? Wouldn't they be elbowing the puny for-profits aside?

USNews' undergraduate rankings don't list places like UC San Francisco, the Naval Postgraduate School or the Claremont Graduate University either. It's only interested in conventional classroom based undergraduate programs. COSC isn't listed. TESC and Excelsior are listed but left unranked.

The USNews graduate issue isn't really a ranking in the same way. Sensibly, it is broken down by field and specialty, but only lists a few programs in each category that it believes are exceptional. These are always on-campus programs.

So once again, your argument is too strong. The fire that you are directing at for-profits is falling on distance education in general.

And, if I remember correctly, USNews 'America's Best Colleges' had an article on distance education a few years ago. That article interviewed several students, and as I recall a student at the University of Phoenix was featured prominently, photo and everything.

I think that providing continuing higher education to the adult public is a valuable service. Given the changes that are occuring in the economy, it is going to become even more critical in years ahead. In general, that's what distance education does best and it's why DL exists.

If accessability and flexability are sins, should this group dismiss TESC and COSC as well as the for-profits? These state schools certainly emphasize the very things that you dismiss. If serving sub-optimal student populations (however you choose to define that) is a sin, should we dismiss CSUDH, which unlike USC a few miles away actually tries to serve its surrounding low income community rather than turning its back on them? It could raise itself easily in the USNews undergraduate rankings if it simply raised its admissions standards, demanded higher SATs and so on. That's what USC does. But CSUDH chooses not to, for what it believes to be very good reasons.

It gets down to the fundamental question of who higher education is for.

But even more fundamentally, is there any real connection between this issue and the tax status of the school? Gourmet restaurants are for-profit entities that serve a high-end clientele, charging more money for an allegedly superior product. That business model succeeds. Tiffany's works. So why are you suggesting that a for-profit school couldn't be very selective, hire an all-star faculty, and then compete with Duke's Global Executive program?

So, either the tax status makes a high-end business model impossible, or else it doesn't. If it doesn't, then the for-profits have chosen to emphasize open education and accessability, serving an adult continuing education clientele, as a strategic choice. And Andy's argument would then seem to be more against that choice than against the tax status. Again he is launching ordinance that is falling on DL.

Does the fact that financial information is less available for schools outside the United States constitute an argument that American students should avoid them?

More generally, is this really something that a prospective student needs to be concerned with, apart from allegations of irregularities?

And that, I believe, is the basic issue behind all of this. As I said, this seems to me to be basically a labor issue.

If I were choosing an MBA program, I probably wouldn't choose Phoenix either. But by starting all of these threads, and by using such broad arguments, Andy is using a cannon to kill a gnat. The issues that he is raising in passing are much more interesting to me than is the University of Phoenix.

As I said before, the same argument applies to distance education itself. The accreditors have shown just as much hesitancy with fully DL institutions as they have shown with regards to full time faculty issues.

And there is a related question: What is your opinion of examination-based degrees, Andy? There are programs out there that don't have any faculty teaching classes at all, full-time OR part-time. If you are going to trash schools because they arguably employ too many part-timers, then don't you think that a school that tells you to read the materials and then take the exam is ten times worse?

 

I think Bill has a good point here. I could wallpaper my house with all the solicitations for money I get from my undergrad alma mater, a private, alleged non-profit school.


Bruce

 

While I'm not crazy about exam based degrees - I do see one big difference. With the exception of H-W's MBA, most of these are undergraduate degrees. In the undergrad world lots of things happen that don't happen at the grad level.

The American Council on Education has a well established equivalence between certain training, testing and certification programs and undergraduate credits (such as MSCE, CNE, ICCP, CLEP, etc.). For a mid-career person who has a year or two of college and a lot of this sort of stuff - I can't argue with awarding a degree.

I certainly wouldn't recommend this for an 18 year old like my son, however. He belongs in school under the guidance of a dedicated and (mostly) full-time faculty. Some part-time adjuncts are not at all bad - but he needs to see and work with faculty every day and not just for 3 hours a week that the adjunct is on campus.

Where I'm really not clear is giving credit for life experience. This certainly sounds weak to me. But I don't understand how it is done.

As has been discussed here before, I've yet to see any graduate programs that accept credit in these ways. Graduate programs are based on new learning in graduate courses.

Regards - Andy

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Andy Borchers, DBA
NSU (1996)