Quality assurance in for-profit education: Tame risks, not growth

Sep 5, 2011


"If quality assurance is partly about risk, are for-profit institutions inherently more risky than public institutions?", asks a discussions paper released by Council for Higher Education Accreditation (CHEA) and UNESCO) based on a recent meeting on for-profit higher education.

The paper looks into the quality assurance challenges and needs with internationalization of for-profit higher education institutions supported by ambitious growth goals and technological advancements with e-learning models. It is becoming increasingly complex to assure quality in a multi-country delivery format. For example, there are 420,000 people outside the UK pursuing UK degrees through a range of models in 100 countries.

I agree with report at one level and disagree on another.
  • Agree: For-profit is indispensable in meeting global demand 
The report notes, "...taking an international perspective, it may be that distinguishing within the private sector between for-profit and not-for-profit institutions is unhelpful.  Public universities become profit-making enterprises when they operate outside their home jurisdictions." It adds, "The key question is what surpluses are spent on. All public institutions are engaged in making cross-subsidies among units. However, the private sector may be more disciplined about the way it reinvests surpluses."
Developing countries are anyways resource constrained and investing in fixed assets for meeting increasing demand is an inefficient way to grow. Private institutions have taken leap in exploiting and adopting online learning technologies and economies of scale which may better meet the needs developing countries. Of course, it does not apply to all level of programs and fields of studies, however, it does hold immense potential.
  • Disagree: "level playing" field for quality assurance and transparency 
The report argues for level playing field for public and for-profit institutions and states "The main plea is for a level playing field. Any good institution starts with the student and builds a business model from there in a transparent fashion." The responsibility of quality assurance is to define and allow only "good institutions", however, many bad institutions flourish. The experiences of aggressive recruitment practices at for-profit sector in the US and collapse of international students market in Australia show that for-profit should be held for much higher standards of transparency, disclosures and quality assurance. The information gap between students and institutions is very high and given the aggressive marketing tactics employed by for-profit, students are highly likely to be misled.

By definition, the primary focus of "for-profit" institutions is to maximize profits and the simple rule of profit maximization is to cut costs (technology) and raise revenues (enrollment). While for-profits have done a great job in bringing cost-efficiency they have also vitiated the confidence about their recruitment marketing practices. A strong quality assurance process is required to  enable growth of cross-border for-profit education, while managing the risks it poses to students.

Thoughts/comments?

Dr. Rahul Choudaha

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