Wednesday, October 23, 2013

More Bad News from the For-Profit Higher Ed Sector

I've written before (posts too numerous to list here, search under the "higher education" label) about the for-profit higher ed sector and its woes. When online education first became a thing some ten years ago, enthusiastic boosters predicted that the University of Phoenix would put traditional "brick and mortar" institutions out of business. Turns out that maybe that model isn't so robust:
Apollo Group Plans to Lay Off 500, as Does Education Management Corp.
A drop in your customer base of 18% in a year is enough to cripple almost any business, as is a 36% decline in revenue. These are not signs of a business model poised to take over the industry - they're signs of a dying flash in the pan. For all the jargon about "disruptive change" and "avalanches coming", the best efforts of the online-education sector have yet to demonstrate that they have the staying power to really force major change. In a few more years we may be writing their obituaries.

I could speculate as to why things have gone this way, but I would do so largely without data. It's tempting, from the point of view of traditional higher ed, to say that this is a failure of Phoenix and its brethren to manage to produce a quality product. There's some truth to that - by all known measures of quality and productivity (publications, grants, stature and reputation of faculty, patents, etc.) online "universities" can't begin to compete with even middle-tier traditional institutions, whose faculties are filled with PhDs from eminent institutions who don't just teach, but expand the frontiers of knowledge on a daily basis. Possibly that edge in quality of faculty - who are, in essence, the "product" that universities sell - has persuaded the market.

Whatever the underlying causes, I expect to see more news items like this one in coming months and years. Online universities won't disappear overnight - they may find a market niche and hang on for a very long time. But the chances of their dominating the higher education landscape in the future look increasingly remote.

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