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Ahead of the Curve: Three Competitive Advantages of For-Profit Colleges

—Co-written with Brian A. Rodriguez | Research Assistant at the Pullias Center for Higher Education, University of Southern California—

Ahead of the Curve: Three Competitive Advantages of For-Profit Colleges
Despite facing criticism in recent months over operating practices, for profit colleges and universities hold a number of advantages over their non-profit competitors.

Given past and current trends, signs point to the commonsensical notion that for-profit colleges and universities (FPCUs) will adapt to economic and market demands. Such an observation, however obvious, is not really what we have seen with regard to traditional postsecondary institutions. They are largely relying on business and pedagogical models from the 20th century. But what of the for-profits?

Below are three business advantages for-profit higher education institutions hold over most of their public and not-for-profit competitors:

1. Building partnerships

FPCUs are better able, and more willing, to build partnerships with employers. They build rapport with businesses and organizations not only because of the brouhaha surrounding gainful employment but also because, ultimately, if their product — education for a career — is not successful, the customer will not buy it. The result is that these sorts of relationships enable FPCU students to land internships and positions and get a leg up in a difficult economic environment.

By comparison, public and not-for-profit institutions, broadly defined, do not currently have the incentive, wherewithal or personnel to provide job assistance. With gainful employment regulations on the way, for-profit institutions will have to do a better job of helping their students land jobs — and so will all other postsecondary institutions. Ironically, however withering Congressional criticism has been over the last few years over gainful employment, it has forced the for-profits to adapt. In contrast, traditional institutions largely watched from the sidelines. But now all of higher education is under the microscope to see how well they do in terms of helping their graduates find work. With greater financial resources at their disposal, many for-profit institutions will be able to enhance their job assistance services to help graduates secure employment. In doing so, for-profits will be able to rest assured their graduates are steadily finding jobs and upholding their institution’s reputation.

2. Scaling up and scaling down

For-profit colleges have always kept tabs on the jobs of tomorrow. Expect this trend to continue. For-profits will expand into booming fields and eliminate fields the student-consumer no longer finds attractive. Traditional institutions will continue to adapt much more slowly; because of their dedicated workforce, traditional colleges and universities will continue to offer courses and degrees in low-demand fields. By keeping up with future economic and job trends, for-profits will remain a key provider in select fields by adding seats and availability of courses in flourishing fields. As a result, for-profits will be able to better market themselves as specialists in select fields and cater to potential applicants. A by-product of this adaptability if they expand in ethical and consumer-savvy ways is that state legislatures will look for ways to support the FPCUs.

3. It’s about who you know and what you know

For-profit colleges will not only focus on building close ties with potential employers, they will also pioneer and expand competency-based education. Moving away from a traditional education model that centers on a student’s seat time, for-profit colleges will adopt competency-based education models, which emphasize students’ knowledge, abilities and skills. For-profits will seek ways to become more efficient in teaching students what they need to know while also reducing the amount of time students need to spend inside the classroom. Students won’t necessarily graduate from a program because they’ve spent x number of hours in the program or taken x number of units in the program. Instead, they’ll graduate when they have demonstrated mastery of the subject matter and gained the ability and skills needed to get a job.

Moving toward a competency-based curriculum will create two foreseeable advantages for for-profit colleges. First, they will be better able to graduate students in a more timely fashion.  Second, having a greater level of measured learning in which students prove their competence will satisfy employers and increase the likelihood of a graduate landing a job. Further, as criticism of accreditation continues to increase, states will look to alternative models for determining the worth of a college degree — and for-profits could offer a viable alternative.


As always, the challenge for the for-profit sector is the action it takes with regard to these trends. If default rates remain high on student loans, if the justifiable scandal over veterans is not resolved and if students end up in low-paying jobs with sky-high loans, consumer confidence and state and federal regulatory patience will force the FPCUs into bit players in the postsecondary theater. It’s largely up to the for-profits to determine the role they want to have.

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