The recent growth of for-profit educational providers has been one of the most watched trends in higher education (Blumenstyk, 2000; Burd, 1998; Selingo, 1999; Strosnider, 1998). Despite the widespread attention, surprisingly little concrete information exists about the for-profit phenomenon. Although the for-profit sector is not the only source of new competition in higher education, the highly publicized growth of some forprofit institutions has generated increasing anxiety among both private non-profit and public colleges and universities.
To develop a better understanding of how these institutions compare to public community colleges with respect to their students and programs, the Community College Research Center joined with the National Center for Postsecondary Improvement (NCPI) to conduct a two-year study. The objective was to determine whether these two types of institutions are competitive or complementary and how community colleges have responded to the growth of the for-profits.
The study contrasted national data on for-profits with national data on private non-profit and public postsecondary institutions, and examined case study data comparing a high-quality for-profit chain - which we call Tech College - to three public community colleges located near branches of the chain.
Overall, the study identified two significant conclusions. Our analysis of available data indicates that although for-profit enrollments are growing, the market share remains small. The for-profits are not likely to become a major competitive threat to overall community college enrollments in the foreseeable future. The increase in community college enrollments in the mid- to late-1990s exceeded the total for-profit enrollment in the two-year sector. But our case study suggests that the for-profit experience has important lessons for community colleges, especially with respect to student services, program flexibility, the use of data for program improvement, curriculum development, and a focus on outcomes.
Three Principal Questions about the For-Profits
Our study addressed three main questions: (1) Does the growth of for-profits threaten the enrollment base of community colleges and other sectors of higher education? (2) Have for-profits developed a more flexible and responsive system of delivering postsecondary educational services, especially to adult students? (3) Compared to public community colleges, what is the quality of education provided by for-profits?
The growth of for-profits as a competitive threat.
A 2001 report by the Education Commission of the States (ECS) points to a 78 percent growth in the number of for-profit two-year degree-granting institutions between 1989 and 1999. In the same period, the number of for-profit four-year institutions grew by an impressive 266 percent (Kelly, 2001). According to the National Center for Education Statistics (NCES), 28 percent of all two-year degree granting institutions were for-profits by the end of the 1990s (U.S. Department of Education, 1999). In our opinion, an examination of enrollment patterns presents a more meaningful picture.
Thus, we considered national data from the Integrated Postsecondary Educational Data System (IPEDS) (U.S. Department of Education, 1999), which provides some baseline comparison among three sectors: public, private not-for-profit, and for-profit institutions. Each sector is in turn divided among two- and four-year institutions. Community colleges are in the two-year public category.
Student Populations: First, minorities, especially blacks and Hispanics, account for a larger share of for-profit enrollments than they do in either of the other two sectors. second, women are concentrated among the two-year for-profits. This may reflect the large number of cosmetology programs in this sector, although the accuracy of these data may be suspect since many for-profits did not report data on gender. …