“It’s cool to be a drop out these days.“ ... “It’s the dying companies that value college degrees. You have to think beyond that piece of paper.”

-> A College Education on the Cheap? Tech Start-Ups Take on Higher Ed is a short read from CNBC.com. The reporter speaks with Sebastian Thrun of Udacity (formerly of Stanford) and Eren Bali of Udemy. Toward the end of the interview, Thrun makes the point that—education aside—what these large, freely offered MOOC-type course offerings may do really well is act as a search engine for intellectual and creative talent that might otherwise never have a chance to be recognized:

“It’s not necessarily about educating, but discovering,” Thrun says, “We can reach and then develop talent that most universities cannot.”

Hmm. MITx may well be MIT’s way of doing the same thing. What do you think? 

Related opportunity. Note that the theme of the January–March 2013 issue of Planning for Higher Education will be Change-Disruption. If you know of someone who could write credibly about these topics throughout a campus’ integrated planning processes, or from a unique perspective, please suggest authors to Planning’s managing editor, claire.turcotte@scup.org. We’ll be looking for articles, planning stories, bloggers, and more. Insights as to what these MOOCs and new for-profit enterprises might do to our planning environment are welcome.

The BPP University College of Professional Studies, just created this week, is the first privately run university college in Britain in 30+ years and only the second in its history. A for-profit provider has been given the name and the institution. More.

So in steps the private sector, which can at least take those who can afford its significantly higher prices. BPP focuses on providing bankable qualifications such as law, accounting and business (the name refers to the initials of the three accountants who set it up). Students studying accounting at its business school in London, as well as those engaged in distance learning, reckon that its pricey courses are generally regarded by employers as being of higher quality than those in many public-sector universities.

BPP also competes in the lucrative market for postgraduate education. This is unregulated, so state-funded universities charge hefty fees for masters degrees and then use the money to help subsidise their loss-making undergraduate provision. BPP has no need for such cross-subsidies, so it can spend almost all of what postgraduate students pay on teaching them.

 

 Many years ago this writer was hired to do some computer training at a for-profit school. Arriving to teach one day, he discovered the local sheriff, locking the place up and was quick-talking enough to persuade the sheriff to let him take home his personal computer, which had been stored at the school. As for-profits move to fill the gap and be part of the push for more graduates, many criticize them - and many for-profits feel unfairly tarred by the brush of bad stories. Read more.

Government money, lightly supervised institutions, unchecked supervising bodies and debt-trapped students — it all sounds similar to the subprime-mortgage collapse that is still fresh in America's mind. "The analogies are unbelievable," said Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers, linking the for-profit education boom to the savings-and-loan crisis of the 1980s, the dotcom boom of the '90s and the recent mortgage bubble, which was helped along by lax credit-rating agencies and loose regulation.

For-profit school leaders deny the parallel. "It's silly and simplistic," responds Harris Miller, CEO and president of the Career College Association. "The analogy between the [for-profit college] accrediting bodies and the [credit] rating service is absolute nonsense." Corinthian Colleges Inc. downplays default numbers and cites an Office of Management and Budget figure showing that loan-repayment rates have actually risen in the past decade.

Peter S. Goodman, In Hard Times, Lured Into Trade School and Debt, The New York Times:

One fast-growing American industry has become a conspicuous beneficiary of the recession: for-profit colleges and trade schools . . . But the profits have come at substantial taxpayer expense while often delivering dubious benefits to students, according to academics and advocates for greater oversight of financial aid. Critics say many schools exaggerate the value of their degree programs, selling young people on dreams of middle-class wages while setting them up for default on untenable debts, low-wage work and a struggle to avoid poverty. And the schools are harvesting growing federal student aid dollars, including Pell grants awarded to low-income students.

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Kevin Carey, policy director of Education Sector, writes in the Washington Monthly about some new twists on for-profit higher ed and foresees our industry getting hit like the music industry has. He says we're lucky, in that we have more regulatory protection.

[A]n ad caught her eye: a company called StraighterLine was offering online courses in subjects like accounting, statistics, and math. This was hardly unusual—hundreds of institutions are online hawking degrees. But one thing about StraighterLine stood out: it offered as many courses as she wanted for a flat rate of $99 a month. “It sounds like a scam,” Solvig thought—she’d run into a lot of shady companies and hard-sell tactics on the Internet. But for $99, why not take a risk?

***

Smith’s struggle to establish StraighterLine suggests that higher education still has some time before the Internet bomb explodes in its basement. The fuse was only a couple of years long for the music and travel industries; for newspapers it was ten. Colleges may have another decade or two, particularly given their regulatory protections.

Elizabeth Redden has written a very nice summary of the current changes at Crichton College, as well as the further-down-the-road experiences of Grand Canyon Education, Inc. What happens when a faith-based institution decides to seek financial salvation by going commercial?

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New Players, Different Game: Understanding the Rise of For-Profit Colleges and Universities by William G. Tierney and Guilbert C. Hentschke. "[The authors] provide a reasonably thorough introduction to and analysis of that portion of the for-profit sector of greatest interest to most planners—large university systems that are regionally accredited degree-granting institutions owned and operated by publicly traded for-profit corporations." Reviewed in Planning for Higher Education by Carol Everly Floyd.

By Goldie Blumenstyk in The Chronicle of Higher Education's 'Buildings & Grounds Blog':

[T]he University of Phoenix has begun to develop new drop-in centers for its distance-education students. The specially-designed centers house tutoring services and double as social spaces. About 200,000 of the university’s 330,000 students take courses online.

U. of Phoenix

The first of the centers, conceived as “a cross between a library and a Starbucks,” opened about a year ago in Plano, Tex., says William J. Pepicello, the university’s president. University leaders determined that Plano would be a good site after analyzing ZIP codes of distance-education students and finding that the location was central to many of them.

So . . . "It's a unique non-profit business failure saved from closure in the nick of time by a special form of receivership." Significant Partners purchased Myers University in a 'distress sale' situation and intend to turn it into a for-profit. Now what? "The Higher Learning Commission has life or death power over the institution's future as its re-accreditor for the change of ownership. They have been incredibly helpful and receptive since our announcement last week, for which we're grateful. The Ohio Board of Regents have approval power. And because we're going to convert Myers into a for-profit entity, we'll need an approval from the State Board of Career Colleges and Schools. The U.S. Department of Education will also be involved when ownership changes. I feel like I'm putting seven socks on an octopus." Read about it in The Greentree Gazette.

Doug Lederman, in Inside Higher Ed, writes about a recent three-day meeting "sponsored by the International Finance Corporation, a World Bank agency that aims to build the private sector in developing countries." In the first day of the conference, sponsored by the International Finance Corporation, a World Bank agency that aims to build the private sector in developing countries, Doug Becker, who heads a $B company - Laureate Education, Inc. - which has 70 campuses in 17 countries, noted that he sees:

an international landscape in which demand for higher education among 18- to 24-year-olds is growing by 10 percent a year, drawing ever more institutions into the market seeking to meet the burgeoning demand that countries’ government cannot. Gone, he said, are the days when would-be providers of private higher education were satisfied creating vocational schools; and with the heightened ambition of those institutions has sometimes come more scrutiny and suspicion.