Non-Profit Education Challenges: For-Profit Competition

One of the potential challenges faced by private higher education is competition from the for-profit sector. Stewart, Kane and Scruggs raise the issue of distance e-learning programs as an alternative for “nontraditional” students, ie: part-time, working adult students (the most notable example is the ubiquitous University of Phoenix). The authors note that less than 2 percent of nontraditional students are involved in a for-profit “cyber learning” experience. Additionally, many of these “universities” came to a cyber pop with the tech bubble of the late 1990s. Yet, despite their general financial instability, I think they bear further consideration in lieu of our interest in non-profit education challenges.

Western Governors University (WGU) and the California Virtual University (CVU) are two failed online university ventures noted in Ch 3. A more detailed analysis of the issues facing these organizations can be found with Berg (1998), who cites both WGU and CVU as “revealing examples of the complex issues involved in implementing distance learning.” Below is an excerpt from Berg’s Public Policy on Distance Learning in Higher Education.

"Distance learning has become the focus of a great deal of attention in higher education circles in the past few years. While a fascination with the technology has led to enthusiasm from many, it has met with equally intense opposition from others. On the policy level, the Western Governors University (WGU) and the California Virtual University (CVU) are revealing examples of the complex issues involved in implementing distance learning. Although the technology is certainly important, it has masked the fact that the WGU and CVU initiatives mark the rise of learner-centered higher education and the increased role of business in the academy.”

In comparing and contrasting these two policy efforts the following key issues emerge:

* private industry in higher education
* competency-based vs. seat time credit
* university governance/faculty labor issues
* accreditation
* education vs. training
* state residency and funding
* consumerism in education

Of the key issues identified by Berg, a few stand out as especially important for our discussion.
Consumerism in education is one:

“For many critics of the use of distance learning in higher education, the issue is not the use of technology but the perceived commercialization of the academy. The strong reaction to The California Educational Technology Initiative (CETI) proposed by CSU to contract with four large technology corporations (Microsoft, GTE, Fujitsu, and Hughes Electronics Corp.) to provide technology and networking to CSU campuses is a current example of this reaction. The deal was put on hold at the end of 1997 when faced with widespread criticism from students and non-participating companies with complaints about the privatization of CSU as a whole. The agreement has now been delayed until the May, 1998 Board of Trustees meeting. However, the state’s legislative counsel, Bion M. Gregory, released a 27- page review of the plan at the end of January, 1998, with the opinion that the deal was illegal because it would put the university in the role of a profit-making entity (Young, 1998). Contrary to this opinion, others defend the agreement because it provides much needed funding for technology infrastructure and allows for open bidding for services and equipment. Furthermore, it is argued that the agreement does allow CSU to go to other providers for a lower price if necessary (Wilson & David, 1998, p. B15).”

We can tie this all back to our non-profit private education sisters; should they try to reach out to nontraditional students and lure them away from the siren’s song of for-profit cyber learning? Or is 2 percent such a puny market share of nontraditional students interested in online learning that resources could be better spent elsewhere than bolstering their outreach for continuing education programs?

Berg, G.A. (1998). "Public Policy on Distance Learning in Higher Education: California State and Western Governors Association Initiatives." Education Policy Analysis Archives, 6 (11). http://epaa.asu.edu/epaa/v6n11.html