Does For-Profit Higher Education Serve A Social Purpose?

I am interested in Higher Education: I believe that expanding Higher Education opportunities, through private sector participation if necessary, is key to create opportunities of social progression. I am not alone in this - this is possibly the most commonly held view in the UK and the United States - and this allows me to think favourably about what I do. Even if the Private Higher Ed is run for a profit, I argue, this performs an important social function, and helps change the society for better.

At this time, however, I am trying to question this deeply held belief - does it?

The reason I question is because I am at that time in life when I feel like questioning everything I took for granted. In a way, I am starting a new life. I am out of the burn-out I was suffering around this time last year and have a far more positive world view than I had before. Despite the series of deaths in my family, I have lost four very close people since this January including my brother, and indeed, because of such traumatic transformation, I believe my life has started afresh. It is the time of re-purposing my life and to do so, I am exploring, researching and questioning all the things I accepted unquestioningly before.

My faith in private higher education comes from my life experience and of the transformations I have seen myself. Without private sector stepping in and expanding education opportunities, my life would have been very different than it turned out to be. I chose to study Information Technology in a private school, NIIT, back in 1990, and this changed my life: There was almost no public provision at the time where I could have gone and studied IT at the time. I have also worked many years, 12 years between 1993 and 2004, in the sector, expanding the same opportunity to other young people in India, Bangladesh, Bhutan, Burma, Thailand, Philippines and Vietnam, either at NIIT, or at Aptech, or in my own business, and seen many people transforming their lives after taking a diploma. It is quite natural for me to believe that the same can happen to higher education.

However, after spending last few years exploring the private higher education sector, somewhat indirectly between 2004 and 2010, and then as a direct participant since last year, I am not so sure. There are a number of reasons why I think private higher education, in its current form, may end up doing more harm than good to social mobility and progression.

The first reason for this is because of supply-side problems of Higher Education. Higher Education historically have been restricted to a small group of people, who in turn ran almost all the important social institutions. The sudden massification of Higher Education provisions, the rapid expansion of university places and colleges, have created a deep bottleneck of getting appropriately qualified personnel to run the Higher Ed classrooms. This has created a multi-tier system in Higher Ed provisions as the Governments tried to absorb it into the latest political agenda: There are lots of bad public universities out there which has all the pretensions of the good ones but none of their capabilities. The private sector, so far, have solely focused on the quantity problem, of expanding higher ed provisions to more and more people, but have done almost nothing to address the quality issues. Therefore, while the number of degrees issued have expanded, we have had a qualification inflation, and most degrees have become worthless. This meant the social disparity continues as usual, notwithstanding the fact that more people have degrees now: It is just that more people with degrees are unemployed now and more people with degrees to go to jail than ever before.

The reason why private sector failed to address the quality problems in Higher Education is quite obvious: The returns at the quantity end of things were more obvious and attractive, and this has skewed the investments significantly. Also, in most countries, regulation on private sector Higher Education is quite lax, the only thing a For Profit education company has to prove is that they have enough money and resources, and therefore, we have had a gold rush of a kind, some of it, predictably, by cowboys of different variety. It is only now the pay-off problems are becoming clearer, the public are asking questions about the activities of the private sector and the governments are scrambling to lock the gates.

With my experience in For-Profit Higher Ed, I can think of a number of things the industry has got wrong. First, the industry is founded on opportunism, not the high purpose of advancing social opportunity. This meant the wrong kind of investors usually get attracted to it, and therefore, most companies are committed to a short term agenda (with some notable exceptions). Second, this is an industry which has not yet found its business model. With some notable exceptions, For Profit companies focused on narrow teaching led segments of higher education at the expense of everything else, and could only sustain their lead till the time larger public sector providers caught up with them. Higher Ed, which should involve, to some degree at least, advancement of knowledge side-by-side with teaching, is ill-suited for this approach, mostly. Hence, For Profit companies struggle to repeat their successes when it comes to higher education mostly. The teaching-research-innovation model that works for the top universities is not one which can be adapted for For Profit education sector easily.

However, I think we are arriving at a game-changing moment for the industry. After years of light touch regulation, the governments are tightening the control over the For Profit education sector. This is not necessarily bad: In Britain, For Profit sector has done very well for the schools, which is a highly regulated sector, but became a disorganized mess in Higher Education, where the regulations were virtually non-existent. The regulations, though some of it distinctly ill-conceived, generally raises the bar for the industry, and unleashes a round of creative destruction, leaving only the fittest to survive. A similar thing is happening in America too, and this is forcing the For-Profit Education sector to look for a more balanced business model. This is a time of crisis, but also of innovation: I am certain that what will emerge out of this uncertain time is a more sustainable model of For Profit higher education, which is clear about its social purpose. That outcome will be worth all the trouble we are facing right now.


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