For Profit vs. Non Profit

[Kermz]

I'm reading a book by Thomas Sowell called Economic Facts and Fallacies and he has a chapter on academics where he writes a lot about Non-Profit vs. For-profit colleges. Someone posted in another thread about the University of Phoenix (A For Profit college) and it made me curious as to why these kinds of institutions are looked down upon.

For-Profit College Costs Surpass Nonprofit Peers in U.S. Study - Bloomberg

This article states that it is much more expensive to attend a for-profit college, but it also says

The costs for students at private nonprofit colleges were lower, in part, because they received an average of $10,900 in annual scholarships, while for-profit college students got an average of $2,600 in grants. Public university students received an average of $3,700 in such assistance.

Let me say that I don't believe in federal grants at all. But this article is saying that they want to restrict federal grants for students that go to for-profit schools, like the fact that they are for-profit is the problem. Yet at the same time it acknowledges that costs at public universities are rising as well. I would argue that public institutions are not all "for the student" like they claim to be. I would also argue that the reason for for-profit costs are rising is because the students are being subsidized by the taxpayer, not because of the fact they are for-profit. In the public system, Administration and faculty benefit from rising prices (Cal state system is a perfect example), just as a for profit institution would benefit it's shareholders. The only difference is there is little direct consequence for decisions made by administration and faculty in the public system.

Cal State tuition could rise 9% next fall - Los Angeles Times
CSU presidents symbolize waste, inefficiency in public higher education - Times-Standard Online

Many "costs" incurred by a university are unnecessary, but again, they suffer little to no consequence themselves because their behavior is subsidized.

Waste, Bloat and Excess: Report outlines derailment of California higher education |* ACTA

UC Berkeley faces more than $320 million in stadium renovation costs, with students likely to shoulder the burden through increased student fees.

Last year, the incoming president of San Diego State University was awarded a $400,000 salary. This was a $100,000 jump from the salary of his predecessor. The generous offer was approved alongside a 12% tuition increase for students.

One argument that I kept coming across was that Non-Profit spends more money educating each student then For Profit institutions. But I don't believe that simply spending more money and paying your professors more means that the students will get a better education. Plus, many times, this extra money is really spent paying professors to do research.
From Sowell's book pg. 122 Chapter 4-

There is another sense in which determining the costs of teaching load at many universities was reduced over the years from 12 semester hours to 6 semester hours, that required the hiring of twice as many faculty members to teach a given number of courses. Although the additional costs might be attributed to teaching in the institution's accounting records, in fact a key reason for reduced teaching loads has been to provide more time for professors to do more research

Dropout rates are much higher in for-profit bachelor's degree programs then in non-profit ones. But I would defend this in saying that this can be attributed to the demographics of the students. Many students that go to for-profit schools already work, have children and overall have much more responsibility than the average full time student. I used to deliver to dental offices and many of the assistants who worked at these places went to for profit schools. Some for profit schools are strong in a particular field. I believe that simply being "for profit" is not the problem. The problem is government subsidizing it. My case for going to a for-profit school is that it is focused on a particular field and it is much more flexible for somebody with a full time job.

 

[Fisher]

For profit colleges do not benefit from massive trusts.

 

[imagep]

I'm reading a book by Thomas Sowell called Economic Facts and Fallacies and he has a chapter on academics where he writes a lot about Non-Profit vs. For-profit colleges. Someone posted in another thread about the University of Phoenix (A For Profit college) and it made me curious as to why these kinds of institutions are looked down upon.

For-Profit College Costs Surpass Nonprofit Peers in U.S. Study - Bloomberg

This article states that it is much more expensive to attend a for-profit college, but it also says



Let me say that I don't believe in federal grants at all. But this article is saying that they want to restrict federal grants for students that go to for-profit schools, like the fact that they are for-profit is the problem. Yet at the same time it acknowledges that costs at public universities are rising as well. I would argue that public institutions are not all "for the student" like they claim to be. I would also argue that the reason for for-profit costs are rising is because the students are being subsidized by the taxpayer, not because of the fact they are for-profit. In the public system, Administration and faculty benefit from rising prices (Cal state system is a perfect example), just as a for profit institution would benefit it's shareholders. The only difference is there is little direct consequence for decisions made by administration and faculty in the public system.

Cal State tuition could rise 9% next fall - Los Angeles Times
CSU presidents symbolize waste, inefficiency in public higher education - Times-Standard Online

Many "costs" incurred by a university are unnecessary, but again, they suffer little to no consequence themselves because their behavior is subsidized.

Waste, Bloat and Excess: Report outlines derailment of California higher education |* ACTA




One argument that I kept coming across was that Non-Profit spends more money educating each student then For Profit institutions. But I don't believe that simply spending more money and paying your professors more means that the students will get a better education. Plus, many times, this extra money is really spent paying professors to do research.
From Sowell's book pg. 122 Chapter 4-

Dropout rates are much higher in for-profit bachelor's degree programs then in non-profit ones. But I would defend this in saying that this can be attributed to the demographics of the students. Many students that go to for-profit schools already work, have children and overall have much more responsibility than the average full time student. I used to deliver to dental offices and many of the assistants who worked at these places went to for profit schools. Some for profit schools are strong in a particular field. I believe that simply being "for profit" is not the problem. The problem is government subsidizing it. My case for going to a for-profit school is that it is focused on a particular field and it is much more flexible for somebody with a full time job.

a while back I was researching for profits just for the heck of it, and found that their biggest issue is that they have a large percent of older students who were considered "non traditional" students. Older students who were very academically qualified tended to do very well in all colleges, regardless of profit status, but most of these "non traditional" students are not really academically qualified for college. thus, since for profits have a larger percent of older students, they naturally have a lower success rate.

Like Fisher mentioned, for profit colleges don't have the trusts that academic scholarships are funded from, so most well qualified students tend to gravitate to traditional non-profit colleges, where they get subsidized tuitions and can benefit from scholarships.

Not that any of this is good or bad, it's just reality.

 

[cpwill]

yup. non-profits dominate distance learning as well, which is more likely to be an option for those who have lives outside of school.

 

[imagep]

yup. non-profits dominate distance learning as well, which is more likely to be an option for those who have lives outside of school.

There are enough non-profits that offer fully accredited transferable classes online, that I think the first two years of college could easily be accomplished totally online, from non-profit colleges. the great thing about this is that it becomes very easy to price shop. Just go online, and find which accredited college offers the courses that you need, online, at the lowest cost.

I would suggest that maybe price shopping isn't good, because "you get what you pay for", but in reality, most online for credit classes are about the same. In most cases, it's not the college that is designing the online class. There are companies like Pearson who basically rent their system out to colleges, usually preloaded with the course material. Companies like Pearson contract with textbook companies to provide the course content, complete with tests and homework assignment, and then the individual professors and colleges just pick and chose what material they want to present in the class (let's face it, no course actually gets through an entire textbook). So an online class offered by a community college may very well be identical to one offered by a famous university.

It's the wave of the future...for mature and motivated students. It's guaranteed failure....for those not so mature or motivated.

 

[Kermz]

It's the wave of the future...for mature and motivated students. It's guaranteed failure....for those not so mature or motivated.

That's what it really comes down to.

As for the textbooks, I think that's why they have so many editions and they become "outdated" so quickly. $$$

 

[Fisher]

That's what it really comes down to.

As for the textbooks, I think that's why they have so many editions and they become "outdated" so quickly. $$$

Professors can get a kick back from changing texts rapidly is what I have been told......

 

[Risky Thicket]

There are advantages to both. I'll take non-profit universities over for profit any day.

 

[washunut]

There are enough non-profits that offer fully accredited transferable classes online, that I think the first two years of college could easily be accomplished totally online, from non-profit colleges. the great thing about this is that it becomes very easy to price shop. Just go online, and find which accredited college offers the courses that you need, online, at the lowest cost.

I would suggest that maybe price shopping isn't good, because "you get what you pay for", but in reality, most online for credit classes are about the same. In most cases, it's not the college that is designing the online class. There are companies like Pearson who basically rent their system out to colleges, usually preloaded with the course material. Companies like Pearson contract with textbook companies to provide the course content, complete with tests and homework assignment, and then the individual professors and colleges just pick and chose what material they want to present in the class (let's face it, no course actually gets through an entire textbook). So an online class offered by a community college may very well be identical to one offered by a famous university.

It's the wave of the future...for mature and motivated students. It's guaranteed failure....for those not so mature or motivated.

I agree that online schooling seems to be a great deal. I have some personal experience in that my son had to take three courses over the summer to finish a requirement his profession demands.

The cost of courses came to less than 10% of what we paid for courses when he was at school. The school was accredited. Now I would say the school was not as rigorous as his full time school, you do get what you pay for. But for most students this is a good alternative.