What's better: PhD from a .com school or a DBA from a B&M?

I'll concede that only non-profit institutions with hefty private endowments (or alternatively, ample public support) can afford to offer programs at prices substantially below cost. And I think you will agree that there are, in fact, some non-profits (the wealthier and more prestigious ones) that actually do that. But I'll concede that many non-profits have more limited financial resources, and so the best that they can do is offer programs more or less at cost, i.e. break even.

But if we agree that many non-profits run on a break-even basis -- rather than below cost -- then it's still hard for me to see the basis for a claim that people are profiting from non-profits (as in Post # 187 above), which is the only reason that I entered this overly long thread. Who exactly is profiting at institutions that break even ?

It's been noted before many for-profit schools, even the largest ones, seem to offer a surprisingly limited selection of majors. Probably the vast majority of for-profit degrees are in either business, psychology, computer/IT, criminal justice/security, or education. I agree that there is more likely to be greater diversity at non-profits -- with the most diversity at the ones with the biggest endowments.

 

This is one of the things I have grown to love about this board. People with actual experience can post facts.

 

I think it is hard to generalize with a sample of 3, I have worked for 3 non for profit schools in Canada and the goal for most programs has been to break even. The ones that lose money normally are closed down in the long term.

I must accept that even as non for profit, we tend to drop admission requirements or make a program less rigorous just to maintain a program.

There are good things about being for profit. For instance, for profits tend to have more up to date curriculums and have more industry oriented courses. The courses that I taught for Devry in my opinion were excellent, they have good labs and were up to date with recent technologies.

There is no reason fot not having a for profit school with a good doctoral program. I think the key to have a good program is full time faculty that conducts research that can make a program credible. My issue with many of the online doctoral programs is that many only use adjuncts that are paid peanuts to supervise students, I believe that you get what you pay for, if the faculty is paid peanuts then the student gets peanuts.

Online for profit schools would need to look for the long term and not short term. They should admit smaller amount of students into doctoral programs and hire full time faculty. They should aim for making their graduates employable in academia and research institutions and not just happy to offer them the option to become adjuncts at another online institutions.

I believe there is a market of people willing to pay for a good product. I think some people would be willing to pay the 100K for a program that can lead to academic careers and reseach. Programs in Australia cost that much but people that graduate actually get academic positions.

The online PhDs are still too new and it might take some time before the reshape themselves in order to probe that they can add some value.

I'm sure that a lot of people with online PhDs do a fantastic job but overall the credibility is still low due to the abuse of the use of adjuncts and lack of contribution to the research community.

 

RFVALVE: Fair enough. There are many people that every year get doctorates from online schools and the enrollment seems to be increasing. The question is, what is the motivation for this? What are the real value of these programs?

TONY: It depends upon the person’s situation. For some of our students, their institutions have targeted them for promotion and they want the skills to be able to conduct research, discover knowledge and that have been generated and to be able to generate new data. Others believe that having the Ph.D. will give them increased credibility for their consulting activities. Still others want to teach as adjuncts in addition to their day jobs and others are already in positions in academia and want a degree that does not require them to put their careers on hold.

RFVALVE: You mentioned that these programs are not meant for people looking for academic careers but for people looking for adjunct careers, personal growth or improvement of professional career prospects.

TONY: Actually, they are not designed for the person looking to enter into full-time, tenure-track assistant professor positions at traditional universities. Many people seeking an online doctorate are already-employed teachers/faculty and administrators at K-12, community college or university levels. A number of our students fall in to this category. They are not trying to break into academic—they are already there.

RFVALVE: Not too long time ago, an MBA was more than enough to teach as an adjunct. What has changed that now you need to go for a 3 year online program to get the same job? Are adjunct positions now more demanding? Or is it that MBA programs are so dilluted that now you need a Doctorate just to be able to teach accounting 101?

TONY: Actually, one can teach at the undergraduate/community college level with a masters degree. One of the major factors contributing to the doctorate boom is accreditation. A growing number of accreditation agencies require minimum percentages of faculty with terminal degrees, so it behooves institutions to hire more doctorate holders (both full-time and adjunct). Most accrediting agencies require the doctorate to teach graduate-level courses.

RFVALVE: Many of the online courses are canned and require less knowledge of the content than before so is it really a doctorate required to teach them or just an accreditation requirement that really does not add much value to the student?. Aren't we just inventing products to keep people busy and make some money?

TONY: There are many ways to design and develop courses (face-to-face or online), so I am not certain what you mean by “canned.” At our local elementary and secondary schools, teachers are given curriculum manuals with lesson materials, handouts, PowerPoints/visuals, instructional activities and exams included. The teachers are supposed to teach to the curriculum outlines. Would these be considered “canned”? Some online courses use content created by vendors (similar to the above face-to-face scenario), while others are create with (or without) the use of instructional designers. Some institutions give faculty great leeway in modifying/personalizing their courses, while others provide less so.

A lot of online courses could probably be taught just as effectively by someone without a doctorate or maybe without a college degree at all. This is likely true for many face-to-face courses as well. However, I cannot imagine someone without a doctorate teaching courses that prepare our students to conduct and write their dissertation research. The interactions, announcements, discussion moderating and assignment feedback require someone with an academic and experiential background to provide those as the doctoral level.

 

RFVALVE: How different is an online 3 year part time program different from the old good Master of Science program that was more specialized. Aren't we just rebranding the same thing with title "Doctor" just to give a more prestigious title for a sum of money?

TONY: Not really, I have completed a master’s program, have developed a few programs and have taught in several. It is a different animal than a Ph.D. For one, the master’s is designed to provide specialized training in a discipline, in order to help one become an advanced practitioner. While some require a thesis, the research required is usually neither original nor at a very high level. Ph.D. programs may include advanced courses in a discipline, but they are generally supposed to be heavy on theory (allowing one to discover how things generalize to different organizations, peoples and situations) and heavy on research (allowing the user to generate new knowledge and expand the knowledge base of the field). This is not the mission of masters programs.

RFVALVE: These are few questions that come to my mind. The reality is that if you look at the tuition fees, Doctoral programs tend to have the highest fees so it just makes sense to rebrand Master's program as doctoral programs to justify the increase.

TONY: This probably happens more for first professional degrees (e.g. physical therapy, nursing) where the masters degrees are being phased out and replaced by doctoral programs. However, in the case of first professional degrees, people generally go straight from the bachelor’s to the first professional doctorate. Going from an academic masters program to a research doctorate involves adding more research courses (quantitative, qualitative and mixed-methods) and a dissertation. This is a bit more extensive than re-branding.

RFVAVLE: If research experience is all these programs sell, there is nothing that prevents you from publishing and attending conferences with only a master's. At the end of day, you are not going to be a tenure track faculty so there is no need for a formal doctoral qualification.

TONY: You are correct. Anyone wishing a full-time faculty career needs to participate in these types of scholarly activities. It is also true that not everyone needs a doctoral degree, but it is a mistake to assume (as we see often here at Degreeinfo) that the ONLY purpose for a doctorate is to prepare faculty. The biggest distinction is that someone looking for that first full-time tenure-track assistant professor position would tend to seek out a traditional doctorate. However, online doctorates have had consistently growing acceptance by already employed faculty and administrators (and their institutions) and by organizations outside academia.

 

What if it's more profitable to run an average or subaverage program, as opposed to a really outstanding program?
In that case, what will a for-profit school choose to do?

But fewer students means less revenue. Less revenue means less profit.
If the goal is to maximize profit -- and that is exactly the goal of a for-profit school -- then raising admissions standards and cutting enrollment makes no sense.

But full-time faculty mean more expenses. More expenses means less profit.
If the goal is to maximize profit -- and that is exactly the goal of a for-profit school -- then hiring highly-qualified full-time faculty makes no sense. They cost more.

 

This is certainly correct with regard to public colleges and universities. As you stated, by their design, they operate in the red and the difference is made up by tax subsidies. In the case of private non-profits, this is not necessarily so. In the most recent lists of the 100 most expensive colleges and universities, 98 were private non-profits and 2 were public non-profits. In my home town, undergraduate tuition at the two private non-profit universities is $275-350 greater PER UNIT than tution at our local private for-profit.

At $40,460 per year tution ($53,940 if you attend during summer), MIT is certainly not operating at a loss.

 

Yes, but if online schools fail to show value they will eventually go bankrupt.

From what Tony and others are saying here, it looks like most people are following this type of programs mainly to become adjuncts or for pay bumps for existing community college and K12 teachers.

Pay increases were designed with traditional doctorates in mind. What do you think is going to happen when schools figure that many faculty are getting doctorates earned from online institutions with little credibility? Do you think they will continue paying those salary increases? at some point most schools will start changing policies or will raise the bar by asking AACSB accredited doctorates or other similar accreditation requirements.

There is also the value of a doctorate for K12 and community college teaching. Why do I want my second grade teacher to hold a doctorate? Doest it justify the tax payer's money to have expensive qualifications for people that will teach my kid how to multiply 2 by 2?

I believe that when this type institutions fail to show some value, they might just have to go bankrupt at some point as people will not enroll anymore. People enroll now because they feel there is some value but employers at some point might realize that they are spending money with no value in return and just stop paying more to people graduated from this programs.

I wonder if any for profit school keeps track of the before and after graduation salaries for doctorates that can help to build a justification for their tuition fees. My guess that this doesn't exist as it would only discourage people from enrolling.

 

But what if MIT's operating expenses are more than $ 40,000 - 50,000 per student ?

And what if MIT students actually pay less than the $40,000 - 50,000 "sticker price" ?

Both of these things are true.

MIT's operating expenses are about $ 2.4 billion per year. But about half of that is sponsored research, so that leaves about $ 1.2 billion. MIT has about 10,000 students, so annual expenses are in the $ 120,000 per student range.

MIT's "sticker price" is around $ 50,000 per year -- but most MIT students get grants, scholarships, and other discounts. In fact, MIT only receives about $ 238 million in tuition revenue from their 10,000 students, so annual tuition revenue is only around $ 24,000 per student.

So on an annual, per-student basis, MIT spends around $120,000 per student to stay in operation, while receiving payments of around $24,000 per student.

Does this seem like a profitable business model ?

*****

Dartmouth has published a similar evaluation of its "business model", which comes up with comparable numbers:

Annual per-student cost to operate Dartmouth: $ 101,890
"Sticker price" of Dartmouth tuition, room & board: $ 52,275
Actual average price of Dartmouth tuition, room & board after financial aid: $ 15,895

How can Dartmouth and MIT afford to do this ? Endowment returns and generous alumni donations. Most non-profits can't afford to operate this way -- but the wealthiest ones can.

 

Not really. I cannot speak for all 3,000 "for-profits," but I can state that not all "for-profits" are publicly traded corporations with a huge number of shareholders. At my "for-profit," only 10% of surplus revenues are sent to the two shareholders. The rest is put right back into the institution, to provide capital to purchase buildings, establish a new College of Pharmacy, renovate our student dorms, provide a profit-sharing plan to employees, fund a new sponsored research grant program for faculty, give each faculty member a stipen to purchase a personal notebook computer or iPad and fund over 50 different scholarship programs for students. How is this done? Our Chancellor does not live in a mansion and he drives a Volvo. The University will celebrate its 50th anniversary in a few months. We try not to offer programs that do not make money and our tution nearly the same as that of our local state university and far less than the two local private non-profit universities.

 

And this is why, based on everything I have seen and heard about Sullivan, that Sullivan represents the responsible kind of for-profit university. I would be happy to see this kind of school grow.

The publicly-traded, Apollo Group (parent of UoPhoenix) style universities are another matter entirely.

 

Thank you for providing these useful links. Spending more than 2 billion to educate 10,000 would seem to be a pretty silly business model, if not for the fact that MIT is in the business of conducting activities that go far beyond the educating of its student body.

 

I would be interested in seeing the source of this information.

 

Your logic is fundamentally flawed because it assumes that MIT does not receive more money than the $24,000 the student is paying. Grants and Scholarships are still converted to capital for the school's use as is a good percentage of room and board.

Yes, donations and endowments offset costs. You're not wrong there, but you really need to think about what you're writing before you hit the post reply button.

We also know that MIT is not operating a profitable business model because it's not a business, it's a non-profit. Why is this a discussion point at all? (hypothetical)

This is just retarded for the same reasons as the above plus a few more.

1. Why is the cost to run Dartmouth divided by the number of students only when a good amount of Dartmouth's operations have nothing to do with the student body? How about cost to run Dartmouth divided by a weighted average of student, faculty, facilities and alumni activity? That would mean more as they are cumulatively the total of all income.

2. Show me the standard deviation. There's not enough info here.

 

I have noticed individuals such as Dr Pina and yourself all post facts based on your experiences. They are stated in a dignified and confident manner and always explain what experience you actually have such as number of schools you have worked at and years of experience. The individuals that tend to make blanket statements rarely provide that important piece of information. Perhaps all of their comments are based on second hand information and, while well intended, there is a lot of room or misunderstandings due to limited understanding of the dynamics.

 

You can easily look up basic statistical information for any RA school at the US DoE's "College Navigator" website. Enter "MIT" in the search box, look for "Massachusetts Institute of Technology" in the resulting list of schools, and click on it. Then hit the "Admissions" tab.

In the case of MIT, you will see were a total of 16,632 undergraduate applicants for Fall 2010. Of these, only 10% were accepted; the remaining 90% were rejected. Of these, about 64% actually did decide to go to MIT; the other 36% chose to attend other schools.

MIT enrolls about 1,100 undergraduates per year. They get over 16,000 undergraduate applications per year. That's why their acceptance rate is about 10%.

 

I must have misunderstood the "refuse to take your money". I thought you meant accept you but you get a free ride as opposed to acceptance rate.

 

Look, I totally agree. But there was a suggestion in this thread that non-profits were profitable. I just wanted to point out that the business model is, in fact, quite different.

Did you look at the link that I posted, which shows a detailed breakdown of MIT's expenses and revenues ? Add in all of the "Other operations revenue" in the chart. It's still nowhere near enough to cover operating expenses.

We agree again. In the case of MIT (look at their charts again), endowment revenue and gifts come to $ 668 million per year -- or about $ 67,000 per student per year. Could be handy for offsetting costs.

Dartmouth doesn't provide such weights (again, check the link), but their mission has always been primarily focused on teaching. If they did weight it, teaching would come in at well above 50%.

 

The point is simply that MIT will not do business (i.e. will not accept) about 90% of potential paying customers (i.e. students).

This is a very different "business model" than the one employed by for-profit schools (and, to be fair, many other non-profit schools). A school like (for example) UoP does not tell 90% of its potential customers to go look for an education somewhere else. But MIT does. That's different.