profit motive makes inroads in British education

An article entitled “Profit motive can spoil university sector” which appeared in the British newspaper, The Guardian, on July 31, 2010, reported on the opening of a “for-profit” university in Great Britain. According to the article, David Willetts, the cabinet minister in charge of universities, thinks that post-secondary for-profit schools are a good idea. He thinks they will make higher education less expensive and more efficient and that they have other advantages as well.

However, the author of the article, Matthew Partridge, casts doubt on David Willetts’ claims. In particular, he says that for-profit institutions may have a bad effect on educational standards: the people in charge of these schools, he writes, may be tempted to lower standards because by doing so they will be able to increase student enrollment and make more money. Matthew Partidge emphasizes that there is an important difference between for-profit institutions and private ones. Harvard and Princeton Universities in the US, for example, are private but not for profit. This means that, although they get most of their funding from non-government sources, they are not interested in making money. They are not businesses and, therefore, they can keep high standards both for entry and grading without worrying about whether this will mean they have lower enrolment and less revenue from fees.

In the second part of the article, Matthew Partridge discusses the growth of for-profit post-secondary education in the US where the trend is even more noticeable than it is in Great Britain. He mentions, as an example, the University of Phoenix, which is the largest for-profit post-secondary institution in the the country; there, he says, 85% of the students have still not finished their first degree six years after enrolling. He also notes that in the US a great deal of public money is given by the government to for-profit institutions. For example, even though only 10% of students attend for-profit universities and colleges, about 25% of government subsidies for poor students goes to those schools.

Malcom Partridge ends the article by saying that although for-profit universities could provide useful competition for non-profit schools, if they are not carefully regulated by governments, they will be “an expensive nightmare for students, employees and taxpayers alike.”