For-profit to go non-profit?

Discussion in 'General Distance Learning Discussions' started by Fjaysay, Sep 26, 2012.

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  1. Fjaysay

    Fjaysay New Member

    Hello everyone!

    Obviously, I have stated that I attend at GCU on campus at Phoenix, Arizona. Can a for-profit school go non-profit?

    The reasons behind this question was because I obtained some information while attending a GCU faculty/student workers presentation recently. This presentation was to give all the new/old workers news about the campus and also to discussed the new upcoming campus in the northeast. The presentation was about the history of GCU and also the future of GCU. GCU has a great reputation among the southwest region, meaning that most employers have recognized GCU as an actual school instead of a for-profit giants (UoP, Devry, Walden, etc). Although, most of GCU students attend on-line courses, the numbers of students attending the actual b&m campus has been growing rapidly.

    This actual conversation came across during the presentation when someone asked if GCU is planning to go from for-profit to non-profit. The guy who was presenting told us that since GCU owns most of the share underneath the publicly trade LOPE, they could sell those shares and go to non-profit statues. Although, he did not mention how long that will take or when it will happen, but mentioned that there is a possibility that GCU might take the non-profit route.

    They have also mentioned that admission requirements will get to the same level of the public and private non-profit schools.

    What do you guys think about a for-profit school going non-profit? Do you think there will be a chance that will happen in the near future? If so, what procedures do the school have to take to go non-profit?
     
  2. Randell1234

    Randell1234 Moderator

    It happened in Florida with Keiser. I remember this story and I thought it was funny because Keiser became a non-profit right around the time it ran - Community college seeks to dismiss Keiser lawsuit

    Here it is - Keiser U. Goes Nonprofit - Government - The Chronicle of Higher Education
     
  3. Fjaysay

    Fjaysay New Member

    Wow, I don't think I ever heard of this school. I wonder if there are more for-profit schools that took the same route.

    I just hope eventually all of the good for-profit schools become non-profit. It will definitely help the reputation and bring more students.
     
  4. RugbyMan187

    RugbyMan187 New Member

    I live 5 mins away from Keiser University. You'll be surprised especially in South Florida, a lot of Keiser University bumper stickers. Heck, we even hired a lab technician who graduated from Kesier at my job. Keisers pretty well known in Florida. I think they are a good school, too expensive though like Nova :/
     
  5. Jonathan Whatley

    Jonathan Whatley Well-Known Member

    Berklee College of Music went for-profit to non-profit, and only after that won regional accreditation, IIRC.

    What is now the for-profit Chancellor University was a for-profit business college under various names from 1848 to 1965, non-profit Dyke College 1965 to 1995, renamed non-profit David N. Myers College 1995 to 2008? –*I think this next conversion happened in 2008*– then for-profit again as Chancellor University since then.
     
  6. Hadashi no Gen

    Hadashi no Gen New Member

    I've basically come to realize that whether "for-profit" or "non-profit"... all universities are after the same dollar bills.
     
  7. Rich Douglas

    Rich Douglas Well-Known Member

    This ignores many differences in marketing, recruiting, business operations, scholarly activity, financial aid, and--the biggie--what is done with excess revenues.
     
  8. scottae316

    scottae316 New Member

    All schools are at their core for-profit. How they gain their revenue is the difference.
     
  9. Randell1234

    Randell1234 Moderator

    Really, I do not think so. I guess I just like the idea of capitalism.
     
  10. CalDog

    CalDog New Member

    Except that education -- including for-profit education -- isn't run on capitalist principles.

    In real capitalism, there is a thing called "bankruptcy". Every seller of every product -- except education -- has to face the risk that the buyer will default and fail to make payment. With car sales, home sales, credit cards, even casino gambling -- you name it, there is a risk of default. All of those sales can go up in smoke if the buyer declares bankruptcy. That's one of the risks that a seller faces in a capitalist system.

    But in education, the government won't let buyers (students) default on their loans. So the government, in effect, guarantees those loans. That's obviously fine for the schools and the lenders -- but when your business model relies on government payment guarantees, it ain't capitalism.
     
    Last edited by a moderator: Sep 27, 2012
  11. makana793

    makana793 New Member

    I think maybe Randell is referring to the competitive spirit of capitalism and the fact that these days practically anyone can offer a product. This can also translate to the realm of education where in the past only a select few were able to offer their services, and only certain individuals who had the necessary resources to obtain a degree were able to. The for profit model has in short "broke" down those barriers and tapped into overlooked markets. But then again what the hell do I know. :)
     
  12. CalDog

    CalDog New Member

    The for-profit schools did lead the way into non-traditional, overlooked markets.

    But let's ask another question: what made those non-traditional markets attractive? How did all of those non-traditional students find the money to pay for their education?

    And the answer, overwhelmingly, is: government grants and loans. The reality is that very few people pay for college -- either for-profit or non-profit -- completely out of their own pockets.

    Think about for-profit Trident University International or Ashford University. Both schools have faced the loss of regional accreditation in recent months. If you've been reading degreeinfo, you know that this is a big deal. But why is it a big deal?

    Both schools operate in California, right?
    And it's perfectly legal for an unaccredited school to operate in California, right?
    So in theory, both TUI and Ashford could continue to operate legally in California, even if they lost RA, right?

    So what's the problem? The problem, of course, is that TUI and Ashford need RA to qualify for Federal financial aid. If they lose their eligibility for government assistance, they will die immediately. And everybody knows it.

    So the business model of for-profit schools like TUI or Ashford is completely dependent on the availability of financial support from the government. That may be a profitable model -- but it's not free-market capitalism.
     
  13. makana793

    makana793 New Member

    Again, what the hell do I know :) just throwing in my 2 cents here.
     
  14. CalDog

    CalDog New Member

    Hey, now you know more.
     
  15. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Generally no, but a little of the sector is, such as those DETC schools that don't participate in the federal financial aid system -- and not coincidentally also offer some of the lowest tuition rates in American higher education.

    Exactly so, it's corporatism, and that's the system that we have in the West. I wish more people would understand the difference, because it's not even close to capitalism.
     
  16. I can only imagine what America would be like if people were able to discharge their student loans in bankruptcy. EVERYONE (not literally), would be graduating and then just declaring bankruptcy.
     
  17. CalDog

    CalDog New Member

    You don't have to use your imagination. US law formerly allowed people to discharge student loans in bankruptcy, and Canadian law still does.

    Did this practice result in widespread abuse, as you fear? No, for a couple of reasons.

    First, there is typically an enforced "waiting period", so that graduates can't declare bankruptcy immediately after leaving school. They have to wait for a certain number of years. It might be easy to declare bankruptcy if you are a freshly minted college graduate with no assets -- but ten years down the road, you probably do have significant assets, and bankruptcy becomes a lot trickier.

    Second, the threat of bankruptcy prevents lenders from making totally ridiculous student loans. Under the present law, banks will cheerfully lend six figures for a worthless degree in Underwater Basket-Weaving. And why not, if repayment is guaranteed by the government? Put the lenders at risk of default and their lending standards will tighten overnight. Nobody will need to declare bankruptcy to get out of their stupid Underwater Basket-Weaving loans, if those loans aren't made in the first place.
     
    Last edited by a moderator: Sep 27, 2012
  18. truckie270

    truckie270 New Member

    Except for those with some integrity and self-respect........
     

  19. Could you define formerly? I assuming it must have been a timeframe when higher education was much cheaper. I just can't see that being very effective in the current environment. A significant waiting period would make sense but isn’t that a similar concept to what we currently have? As in the if they period is 10 years then it’s guaranteed by someone that they won’t file within that timeframe.

    I think there is truth in the second point but it doesn't hold completely true. Banks are going to loan money to some people they shouldn't, period. It’s a business and they take risks. Those same people are going to turn around and take the money and not be able to pay it. I don't think being government backed or not will deter them as much as most people hope. It should make a dent at least though. Look at American's credit card debt and real estate loans. It’s a mind frame issue not a government issue. If people took their own responsibility and said "Well maybe this Basket-Weaving degree really isn't worth 100k" then things just might be better. I view it as supply and demand.
     
  20. (not literally)
     

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