Is There Still a Meaningful Difference Between For-Profit and Public Higher Ed?

The other day I was scrolling through Twitter when a message caught my eye. It came from George Siemens, a longtime leader in trying to understand the impact of technology on higher ed. He’s the guy who coined the term MOOC, short for Massive Open Online Course, which then was a reference to multiplayer video games.

But this tweet was a biting critique of where higher ed is heading.

He wrote:

“I no longer think there’s a huge difference between for-profit and public higher education. Sit in enough faculty meetings, meet with enough leadership, and it becomes clear that it’s all about money. The difference between for-profit and public is mainly about appearances. In public institutions, we claim the higher ground but almost everything is driven by student numbers, enrollment, and dollars. Education could be less expensive, it could be more engaging, it could have a bigger impact, but we are confined to a system that values dollars first.”

Keep in mind for context here that Siemens is a professor at a public university, the University of Texas at Arlington, and a champion of the values of public institutions. So we called him up to get beyond the tiny character limit of Twitter to hear out his critique.

Not surprisingly, this charge that public higher ed is no different than for-profit higher ed sparked a sharp reaction on Twitter, and plenty of pushback.

“With all deference to your core point, I feel you’ve grossly overstated the similarity,” wrote Shane Mares, a web content manager and market research analyst for the University of Northern Colorado’s Extended Campus. “There is a big difference between revenue and funding, and profit. The changing ecosystem is bound to change all entities that reside there.”

“Yeah, I quite disagree,” added Maria Andersen, CEO and co-founder of Coursetune, a company that makes software designed to help colleges redesign their curriculum. She has also taught courses at community colleges as an adjunct, and worked as director of learning design at an experimental ... nonprofit college called Western Governors University. “In for-profit, the institution typically owns 90 percent of the curriculum and pedagogy decisions and [at a] nonprofit I would say it’s exactly the opposite.”

So we also reached out to Mares and Andersen to hear their expanded thoughts as well.

Below are highlights of these three views on the issue, lightly edited for clarity. Or you can hear these higher-ed leaders in their own voices on a bonus episode of our podcast. You can follow the podcast on the Apple Podcast app, Spotify, Stitcher, Google Play Music or wherever you listen.

EdSurge: What led you to go to your computer and send that comment out into the ether that there’s no longer a big difference between for-profit and public higher education?

George Siemens: There’s a fair bit of change going on in the university sector, and I think you and your readers or listeners are well informed on that, because we see that with the amount of attempted new projects and innovations and so on in the learning process, more and more of those are driven from the corporate end.

Universities really haven’t identified that there are some structural changes happening with the profile of students entering the university, and there are some structural changes with how individuals access the learning opportunities that exist in society as a whole.

As a result of that, universities have been slow to catch on to things like online learning as a broad structure. They’ve been slow to catch on to the new profiles of students who have needs that go outside of the existing university model. The emerging population of students is very different than what we’re used to—meaning, it’s not the 17 to 22 year-old student population. As a backdrop, this is the first big thing that has been a simmering frustration, that higher education has largely failed to create a new teaching and learning pipeline that meets the needs of the [new] students that are emerging as a part of the population.

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As a result of that failure, it’s produced this huge opportunity for external organizations to step up that then provide capability that the university has failed to develop. Pure and simple, I see that as a failure of leadership. Leadership has not treated it like an opportunity that they need to embrace and that they need to prepare for. There’s been a lot of mindsets that the status quo will be the way that things go forward, even though the world around us has structurally and dramatically changed.

Can you give me an example of something that you wish colleges had built but didn’t?

One example is with the big OPM movement right now. [Online Program Managers, or OPMs, are outside companies that come in and help build online programs for colleges.] There’s no reason why universities shouldn’t have developed that capability themselves. There’s no reason why a university would outsource a core functionality.

Another illustration is MOOCs, [those large-scale online courses that were hyped a few years ago.] There was almost a sense [among faculty] that “these things are irrelevant, they don’t matter.” And yet now we’re starting to see that they’ve actually formed an enormous part of the innovation space for universities, and for individual employees that are trying to more rapidly get into the labor market.

The needs of society have become much more complex than what they’ve been in the past, and as a result of the growing complexity of those needs, and universities not addressing those needs broadly, students have turned to other venues and other providers. And even when there’s a chance to work with something like MOOCs that meet the needs of that population, we’ve seen universities step away from that. And now the fastest-growing segment of the learner population is the non-traditional population, and that’s the segment that MOOCs and other innovative programs and platforms target.

You say in your tweet that faculty meetings today are all about enrollment and money. Has that changed in the last 10 or 15 years?

Oh, I think absolutely. 2008 was a watershed moment with a decline in state funding. If you’re a student and you’re racking up debt, you are going to end up being cautious of the debt that you’re taking on. You don’t have that same freedom of exploration, because the idea of a university education has moved from being a public good where an educated population benefits the preservation of a healthy democratic society, to the idea of a university education benefits an individual and her ability to get employment.

Even though we give lip service and say, “No, universities are about transforming lives, too,” the funding mechanisms that are in place with reduced state funding essentially validate the idea that it’s a private good, not a public good. Once you have an individual paying like they’re a customer, they’re going to start acting like they’re a customer. That I think has been underpinning pressure that all universities face.

EdSurge: Shane, why did you decide to chime in and push back against this argument that public higher ed is now basically the same as for-profit college?

Shane Mares: I felt that the implication of the point [George Siemens] was trying to make was a lot stronger than what was implied, so it just felt like making that distinction would be valuable for audiences to see.

How would you describe the difference between public higher education and for-profit higher education?

Mares: The entrance of for-profit universities into the market and the ways they approached students has seen some good and some bad policies and processes come out. There were things that the for-profits were doing on student services and helping people continue through their education that I think traditional universities weren’t doing enough of. So I think there are things that could be learned and a lot of universities are implementing those now.

But as you have to be beholden to someone else’s profit or shareholders, then you’re setting aside money for other people rather, than having revenue be something that you’re drawing in for your employees, your students, your alumni and making sure that you’re offering a good experience. I think it fundamentally changes when you have to make decisions that are going to benefit outside people.

So you’re working in this area of trying to serve students who may also be looking at for-profits in some cases?

Mares: Absolutely. We’ve been doing online for more than 20 years. But when for-profits entered higher education, a lot of that was in distance and online education. Just by the nature of it, our department competes for the same type of students, the ones who will probably be working full-time or part-time while they attend the program, and who are looking for services and support in a different way than the on campus.

EdSurge: Maria, what was your reaction to this charge that public and for-profit education are indistinguishable?

Maria Andersen: There’s still a huge difference between for-profit institutions and nonprofit institutions, sometimes for the better and sometimes for the worse. I think that in nonprofit institutions, they have a very hard time moving on anything quickly because of the fact that 90 percent of the curriculum and pedagogy decisions are owned by faculty, and what that means is that the institution as a whole cannot make quick moves, right? When you have 100 people wanting to steer the ship in different directions, it doesn’t make for a quick move when there’s something that needs to happen.

I don’t even think that public institutions are driven by student numbers, enrollment and money, because the faculty aren’t driven by student numbers, enrollment, and money. I mean, the biggest problem in nonprofit institutions is that you have to get faculty onboard for anything you do, and that turns out to be the hardest thing.

There are some nonprofits that do it and have that kind of control over their faculty, but they were typically started with a completely different model, like Western Governors University. They hired all of their faculty from the beginning with the understanding that they were not traditional faculty. If you didn’t like that, don’t take the job. But in general, I think that for-profits do have a lot more control over their curriculum, and so while they are also driven by student numbers, enrollments, and money, they can make rapid changes to their curriculum because they’re using primarily a large staff of adjuncts to teach their classes, and the control of what’s going into the curriculum is happening centrally in some design office instead of individually in every classroom separately.

When I talked to George Siemens, it sounded like part of what he was frustrated by was that colleges have failed to invest in systems and to control their own destiny Now they’re forced into a situation where they have to work with so many of these for-profit companies that they’re giving up control. I’m curious what you think about that?

Andersen: That comes back to faculty too, actually. I am consistently amazed at the difference between how online courses are developed at community colleges and how online courses are developed at four-year colleges.

A lot of the four-year nonprofit colleges are hiring OPMs to do the work for them, and the development costs are like $20,000-$50,000 a course. Whereas, if you want to teach an online course at a community college, the faculty member is expected to do all the work of development, maybe with a stipend of $1,000 if they’re lucky. That’s a pretty vast difference between what it “costs” a community college and what it costs a four-year college. That’s not to say that the quality isn’t different. It’s just that that’s an expected part of the job for a community college faculty member who wants to teach online—that you’re going to do all the work. At a four-year college, somehow, that isn’t part of the job.

A lot of times the decision to go OPM is because [administrators] don’t think they can get the faculty members to do the work involved for the money that they probably can pay, or the release time [from teaching] they would have to give. The models aren’t set up for that.

But then at the for-profits, they can just make the decision. They essentially know what the cost is already for developing a high-quality online course, and they just decide, “Do we want to do it internally or do we want to hire out for it?” It’s often just a matter of staffing and time, how fast they need to get the course to the market, and things like that.

All of this feels like it’s just the growing pains of the transition to online education, and serving new groups of students.

Andersen: I think a lot of institutions have realized that if they don’t get into this market soon, that they might be in trouble. So they need to just quickly staff up [or add online courses], and that has caused them to go and look for ways to almost bypass [faculty processes.] The beauty of going OPM for some of these schools is that once that decision has been made by leadership, there’s not much the faculty can do to argue about it. They’re there to be the subject matter experts on the design, and the decision to build the online course with an OPM has been made. It’s done.

Correction: This article originally stated that Western Governor's University is a public university. Though it was created by a group of governors in western states, it is a private institution.