For Profit or Unions?

The American Enterprise Institute (AEI) held an online discussion via Google Plus on the role of for-profit colleges and universities such as DeVry University or University of Phoenix.

Michael Horn of the Clayton Christensen Institute said that “a lot of literature that has been out there…has tended to being very biased” and therefore limits American’s understanding of for-profits and their roles in education. He said that for-profits “just do what they’re incentivized to do” and are responding to market pressures of enrollment, investors’ concerns and government regulations. Horn admitted that “they aren’t always virtuous” because of their business structure and having to rely on government loans for a majority of their revenue.

However, because of the availability of capital via investors, for-profits have “significantly more ability to attract capital” and “high quality talent” to their firms and continue to play “a significant role in the emergence of online learning” because of their propensity to respond quickly to market pressures such as supply and demand.

AEI resident scholar on education Andrew Kelly said that a majority of Americans of 75-80% are fine with contracting services to for-profits but “people start getting uncomfortable” when school management is discussed with relation to for-profits taking over schools. The majority becomes a minority of about 25% of Americans who want for-profits to take over management of schools.

Kelly went on to say that for-profits are comparable to most schools and continue to increase access for those who typically would not have this kind of access to education. Also, he mentioned how there are some “rumblings from progressives about privatization” as education policy has come to the forefront. Yet, “these politics are not as simple as they seem or as simple as the op-eds in the Washington Post and The New York Times lead you to believe.”

Kelly said that “Democrats are willing to take compromise that wouldn’t, that doesn’t cost you a head-on collision with union interests.” The reason behind the lack of support of school management run by for-profits is that unions are afraid of the jobs and public money not being diverted to “our teachers, our membership,” Kelly argued.

 

Spencer Irvine is a staff writer at Accuracy in Academia.
If you would like to comment on this article, e-mail contact@academia.org.