For-Profit University

Report

May 1, 2017
Prepared by Rongmei Gao
Introduction
This is a report about for-profit university. For profit university is one kind of popular industry
around the world. There are many for profit university and class in the world throughout the
years. For-profit education is very common in many countries in the world, making up more than
70% of higher education sector in Japan, India, south Korea, and the Philippines.

Industry Overview
for profit university is one kind of school for profit. They will receive some fee for teaching and
learning. Moreover, they will choose the students who suit their class to join them. This
education is one kind of higher education, it has many different layers because their income.
According to Hassani’s research, “The findings indicate that there are stratification structures in
the presence of students in humanities, engineering, agriculture, science, medicine and its related
fields, there is also significant differences between the cultural and economic capital of students
in these majors, whereas there is no significant difference among them in terms of social capital.”
(Hassani. 2016. P. 1.). The education of non-profit and for profit are different, for profit
education would provide higher and good education.

Targeting
People establish for profit university is for cultivating higher education students and profit. In
Hassani’s research, he provided “These students after graduating and in order to enter work
market, act better than lower class students in competitive field of employment and earn more
success. As such, the higher educational system reinforces the class structure of society and it
can be concluded that the type of university has played an important role in stratification.”
(Hassani, 2016. P. 1.). So, the for-profit education could help students to get higher social status.

Major Players and Products

In fact, there are many companies had established for-profit university. In Nidia’s report, he
provided “Recent research indicates that proprietary and other low-status schools can establish
legitimacy through activities that higher status institutions commonly ignore.” (p. 2). the purpose
this kind companies established is providing education for some students who cannot go into
university, and teach some skill them.
For-profit university has two main types. The first type is proving students contact with
universities, like business school, medical fields, and education school. This universities provides
bachelor’s, and master’s degrees that has no different from the local state university. The other
type provides the education and training, like nursing, electric appliance repair, and dental
assistance. According to Kiara Ashanti’s report, “These schools are often considered to be
vocational or trade schools” (Kiara, p. 1). There are some for-profit universities for example:
DeVry University, Colorado Technical University, Webster University, Kaplan University,
University of Phoenix, and ITT Technical Institute.
Advantages
There are many advantages if people join the for-profit university. The for-profit university
doesn’t have the entrance requirement. If you are workers, parents, or you don’t have SAT grade,
you would join the for-profit university. Moreover, they would provide the online class, you
don’t need to go to class every day, that means a full-time worker also could go back to school.
Another important advantage is technical training. “No matter how many doctors, lawyers,
teachers, or businessmen we have, there will always be a need for people to fix our cars, clean
our teeth, or provide support work for doctors and hospitals.” (Kiara, p.1). The for-profit
university could provide this kind training, but the traditional schools cannot.

Challenge and Disadvantage

If you gain the degree from a non-accredited university, your credentials would be doubted.
Moreover, the non-accredited university maybe go out of the business in the business. In
Ashanti’s report, he provided the introduction of the accreditation, “The two types of
accreditation are national and regional. National accreditation focuses on vocational fields, while
regional accreditation is the gold standard across vocational and academic fields” (Kiara, p.1).
Most people would receive the regional accreditation university.
The other thing need to pay attention to is poor fiscal. The university would not tell their students
their financial situation. However, some universities could be closed because of the poor fiscal.
Then the student would fall their courses. For avoiding this mishap, for-profit university would
like to have a huge financial foundation. Moreover, for the new school, “If a school is too new or
too small to have a strong financial foundation, then unforeseen events could shut it down.”
(Kiara, p.1). So, the risk is very big, whatever you want to establish a for-profit university or join
a for-profit university.

Financial performance
The tuition is very high in for-profit university, so, they need their students having the ability for
repaying their loans. Below, I would analyze the situation about repaying the loans in the five
largest and well-known universities:
This picture show us the rate students repay the loans in five for-profit universities (at left) and
three public universities (at right).
The rate in University if Phoenix is same with the Harvard. In this form, the ability of repaying
loans in for-profit universities is lower than public universities. That means many students will
quit school because they cannot pay the tuition. Moreover, according to Chris Kirkham’ s
research, the students who don’t have payment ability would debt, and “higher education that has
expanded rapidly over the last decade by marketing to low-income students who qualify for
federal loans and grants.” (Kirkham, 2012).

According to this picture, from 2001 to 2009, the rate that students who borrow to pay the tuition
increased very fast. Moreover, because of the increasing of the student debt, the rate of the quit
school also increased. Many student cannot bear the pressure to refund the debt, then they would
drop from the for-profit university. From 2001 to 2009, the rate of borrowers who dropped out
increased 6%. (Kirkham, 2012). Moreover, this kind of students will face to a bigger difficult,
they faced unemployment rate of 36 percent, prepared the other borrowers, they have 10 percent
higher than them. (Kirkham, 2012).

Global Trends
In fact, the for-profit education is deflating. From 2006 to 2008, the default rate was increasing.
Moreover, the unemployment rate is also increasing, the students the for-profit universities
enrolled was decreasing. (Butrymowicz, 2015). Moreover, “Regulators have been cracking down
on the industry's misdeeds—most notably, lying about job-placement rates.” (Surowiecki. 2015).
In 2015, Corinthian Colleges that the second largest for-profit university went bankrupt. From
2010, the student’s enrollment rate of University of Phoenix has decreased more than half. So,
the for-profit education is not very prosperous.

Conclusion
In this report, I provide many information of for-profit university. Many years ago, the for-profit
education was very popular because they could provide the technical trainings that the public
university don’t have, and students could have any identity. However, one important bad part is
the high tuition, many students would drop from the university because of this. Also because of
this, the enrollment of the university is decreasing. At now, the for-profit education is not
prosperous. Moreover, the profit of them is decreasing, if you want to go into this kind industry,
you would not get the profit.
 Reference
Banuelos, N. I. (2016). Form Commercial Schools to Corporate Universities: Explaining the
Shift in Proprietary Business Education in the U.S., 1970-1990. Journal Of Higher
Education, 87(4), 573-600.
Butrymowicz, S. & Garland, S. For-profit universities: By the numbers. (2015, February 12).
Retrieved May 03, 2017, from http://hechingerreport.org/for-profit-universities-by-the-
numbers/
Hassani, M., & Ghasemi, S. M. (2016). Investigating Stratification within Higher Education
through Examining the Status of Students in Different Academic Majors in Terms of
Cultural, Social and Economic Capital, Educational Research And Reviews, 11(8), 676-
685.
Iloh, C. (2016). Exploring the For-Profit Experience: An Ethnography of a For-Profit College.
American Educational Research Journal, 53(3), 427-455.
Kirkham, C. (2012, June 04). For-Profit College Students Most Likely To End Up in Debt With
No Diploma, Report Shows. Retrieved May 01, 2017, from
http://www.huffingtonpost.com/2012/06/04/for-profit-colleges-student-debt-
dropout_n_1567607.html
Kiara AshantiKiara Ashanti is a former financial advisor, securities trader, and writer in Central
Florida. He has written for Black Enterprise Magazine, Active Trader Magazine, and
Atlanta Post, and has even appeared on The Oprah Winfrey Show. Kiara covers the areas
of business, investments, and personal finance. (n.d.). Topics. Retrieved May 01, 2017,
from http://www.moneycrashers.com/for-profit-online-colleges/
Ramlo, S. E. (2016). Students’s Views about Potentially Offering Physics Courses Online.
Journal Of Science Edication And Technology, 25(3), 489-496.
Surowiecki, J. (2015, October 25). The For-Profit-School Scandal. Retrieved May 01, 2017,
from http://www.newyorker.com/magazine/2015/11/02/the-rise-and-fall-of-for-profit-
schools