The investment community is still scrutinizing for-profit institutions as they face increased operating costs, the prospect of lower enrollment as students find other alternatives, and the potential of increased regulation (Analysis on Apollo Group here).
Meanwhile Marc Bousquet blogs that these problems are not unique to for-profit environments and were first created by the non-profit sector (link to his post Fix Nonprofit Higher Ed First).
All of these tactics–what I’ve called the tuition gold rush–were pioneered by the nonprofit sector.
1) We nonprofits have been teaching students with underqualified faculty, graduate students, and even undergraduates for the past 40 years (all while braying inanely about an “oversupply” of persons with doctorates).
2) We charge outrageous tuition for degrees which will not lead to employment, while putting students to work at super-exploitative wage discounts.
3) By overcharging students and underpaying faculty, we have been accumulating capital–not in shareholders’ pockets, but capital nonetheless, in buildings and grounds, endowments, in tech infrastructure. We also spend down a lot of the dollars that an enterprise institution captures as profit and sends along to its shareholders. Sometimes those dollars are spent on valid public non-education goods. Just as often, though, they’re blown by the million on administrator initiatives like big-time sports, social engineering, business ventures, and the pet projects of influential campus or community actors.
He places emphasis on the troubles in recruiting and assessing faculty:
Across the country, management-dominated hiring and evaluation of the majority of faculty and student instructors is capricious, ill-informed, and aimed at hiring the cheapest and most docile faculty, not the best. Fixing higher ed will inevitably mean either reinstating the rigors of peer assessment (the tenure system) or finding a credible substitute–which, so far, 40 years of management innovation has failed to provide.