For-Profit Reinvents Itself By Taking Lead on K-12 Education Reform

Earlier this summer, we predicted that the governmental and media scrutiny that for-profit institutions have faced for much of the year would be relatively short-lived. We wrote that the for-profits exercised significant political influence and it was doubtful that Gainful Employment would be implemented as initially proposed if at all. We also predicted that the largest for-profits had the market power, expertise, and resources to “reinvent” themselves just as other large corporations have done throughout contemporary American history.
Well, light is beginning to appear at the end of the tunnel for these schools, although, it is happening much faster than we ever expected.

Last week, in the wake of receiving over 90,000 comments, the United States Department of Education (DOE), decided to postpone issuing final rules on Gainful Employment. This will delay enactment by at least a year and that is assuming the political environment in November will sustain continued effort at all by the Department. If the DOE does enact new rules on the issue, we will be very surprised if they are not much tamer than the proposed regulations that have been introduced.

Now that media scrutiny on for-profit schools has started to subside and the public’s attention is beginning to focus on the November elections and challenges of our public K-12 education system, the University of Phoenix has led the way in the effort to “reinvent” for-profit education. Some of its efforts have been subtle and others fairly bold.
The nation’s largest for-profit school and second largest university system, has been including significantly more testimonials of successful student outcomes in its advertising. These messages have been present in Phoenix advertising for a while, however, they seem much more present as of late. Ads are also trying to deliver the message that Phoenix is similar to a traditional university with individual schools. By way of example, ads touting Phoenix education degree programs now prominently include “College of Education” or “School of Business” for Phoenix’ MBA program.

In our view, the most significant move in the “reinvention” process came this week with University of Phoenix’ sponsorship of NBC’s Education Nation initiative. Not only is Phoenix’ name being prominently promoted by NBC but the school’s ads are actively promoting how Phoenix and its programs are playing an active role in improving student achievement.
No matter how one feels about the University of Phoenix or for-profit institutions, it is easy to acknowledge that these ads make viewers “feel good” and create a perception that the University of Phoenix is at the “forefront of education.” If we were one of the 30 Million adult learners who make up the non-traditional marketplace, we would see these ads and probably be tempted to strongly consider Phoenix. Even if we had heard the University of Phoenix was a for-profit, we would probably view the school as one of the “good” guys, simply based on messaging.

This is just one for-profit. In the coming weeks and months, we suspect we will see similar types of “reinvention” initiatives from many other for-profit schools especially the very large players. There are opportunities here for both for-profits and non-profits.

While the potential troubles for for-profits are far from over and certain changes are on the way no matter what occurs with Gainful Employment, there is a window of opportunity here for the for-profits. Rebranding and reinvention (hopefully more than just superficial) can strengthen their position and the public perception. For-profits can ride the coattails of Phoenix’ initiatives and position themselves in similar ways. For those for-profit schools that are niche providers, there is a great opportunity to not only take advantage of the subsiding negative attention and begin getting unique, positive messaging out to prospective markets/students.

Non-profit institutions perhaps still have the best opportunity in our view. We have heard a collective sigh of relief from many non-profits over the past several months. Many think that all the media and governmental scrutiny have permanently damaged the for-profits beyond repair and that there is no need to view for-profits as competitors any longer. Rightfully or not, many non-profit leaders feel vindicated – that all the scrutiny has “proven the point.” This is the farthest thing from the truth. In our view, for-profits will be stronger than ever in the next year or two. As the scrutiny concludes and many for-profits work on recasting themselves, there is a unique opportunity for many for non-profits to innovate and expand their presence, however, the clock is ticking to get ahead. The bear may be hibernating now but once the bear wakes up, it will be refreshed and ready to fight.

Higher Education Can Help Address Huge Risk in National Security

I was recently discussing the state of education with the President of a major urban university. Specifically, we were talking about America’s changing demographics and the significant disparity in college going (and completion) as it relates to students of color. The university president suggested that our nation’s failure to provide effective post-secondary education opportunities is a significant national security risk. I agree.

As our economy becomes more globalized and dependent on highly skilled labor, failure to educate large growing segments of our population, will relegate many to a permanent underclass. Further, the lack of a large qualified workforce will prevent us from generating the economic output and innovation that is necessary to keep the United States relevant globally. Both scenarios threaten the social order as well as our ability to maintain our superpower status.

A recent report by Ed Week found an over 26-point percentage gap between high school graduation rates of Latino and White Students. The divide for African-Americans is even greater. Unfortunately, these disturbing gaps do not end with high school completion. Huge disparities also exist between the college completion rates of White students compared to African American and Latino students. These gaps are a social travesty but they are much more than that.

In 2007, Latinos and African Americans accounted for nearly 40% of all births in the United States. If we fail to educate a significant portion of this many Americans over the next two (2) decades, what will our nation become? As our population ages, who will our future scientists, doctors, educators, leaders, and business innovators be? Who will grow our economy so we can afford our government or meet our obligations to our retirees? Who will keep us safe and free? Who will come to America to pursue the “American Dream?” Who will ensure that our nation continues to grow and prosper just as it has for much of its 234 year history?

We have a choice to make. We can take steps to address these gaps not incrementally but powerfully and with urgency, or we can do nothing and put our nation at risk. If we make the right decision, we can put ourselves on an unprecedented trajectory for the greatest success America has ever enjoyed.

Many of us in post-secondary education might believe that most of the challenges and solutions are inherent in the nation’s K-12 public education system. To be clear, our K-12 system has tremendous issues to overcome. On the other hand, America’s higher education system certainly has its own challenges as it relates to the achievement gap and delivering outcomes that prepare students to be competitive in today’s workforce. I would also argue that post-secondary institutions also have a responsibility and opportunity to help our K-12 system in educating our youth.

Both non-profit and for-profit schools of higher education have a responsibility to help address this most serious national security priority. Our non-profits have missions focused on providing educational opportunities and the historical expertise in educating so many of our nation’s leaders and innovators. I would argue our for-profit institutions have an even greater obligation (and opportunity). Our largest for-profits have resources that many of our non-profit schools do not. They can make impacts in terms of funding, innovation, and business expertise. For-profit schools also have unique experience attracting and serving our non-traditional students as well as individuals who otherwise might be ignored by traditional higher education.

Here are 10 ways our over 6,700 post-secondary institutions can take bold steps in both the K-12 system and their own schools to address this potential national security crisis:

1. Adopt a local secondary school for the long-term. Beautification, clean-up and used computers are nice but what are truly needed are resources, technology, expertise, specialists, and an on-going commitment. A miniscule fraction of what many for-profit schools spend on recruitment can outfit a high school with high-speed WIFI service while instructors and professors with specialized knowledge can provide lower-achieving students with intense reading or math instruction.

2. Set-up mentoring teams of students and faculty that counsel high school students on post-secondary options, applying to school, and obtaining financial aid.

3. Help provide tutoring, extended instruction, and other types of after school program support for secondary students.

4. Provide students in Grades 7-12 with opportunities to experience higher education and earn college credit.

5. Introduce secondary students to hands-on experiences with careers and professions.

6. Provide high school students with summertime internships and jobs.

7. Work with key industries, large local/regional employers, economic development officials, chambers of commerce, and labor officials to develop program offerings (and curriculums) that best meet the demands of business while incorporating industries into the educational delivery process.

8. Utilize available assessment systems to pinpoint post-secondary students who are at most-risk, focusing scarce academic advising and other support services on these students.

9. Reallocate resources to make proactive career advising services that start at matriculation and last through graduation – a significant institutional priority.

10. Update curriculum so it is more interactive, engaging, and adaptive to different learning styles. Instruction also needs to be flexible as it relates to delivery and the utilization of technology including mobile devices.

There are many examples of many post-secondary institutions working to address this crisis. If all our post-secondary schools begin taking bold steps, we could be well on our way to overcoming this national security risk and guaranteeing America a future of unprecedented success and prosperity. Taking action now provides all our institutions, specifically our for-profit schools with the opportunity to demonstrate that substantially increasing access for all, enhancing outcomes, and strengthening the fabric of our education system – are truly priorities.