The Commons

New legislation being considered by the U.S. Department of Education is squarely aimed at for-profit colleges, with the intent of linking a student’s debt with their post-graduate earnings.  Their concern is that students—lured by advertising—are investing in credentials or degrees that don’t actually deliver the earning power that the student expects, generating flotillas of “underwater” degrees that are as much a burden on American households as those unsupportable mortgages. (A recent New York Times article made waves around this issue—sourcing their critique primarily from a handful of disaffected students and former administrators of for-profit institutions.)

While one might argue about the philosophical underpinnings of this argument (is college really all about making more money?), my question is bigger: why stop with the nonprofit institutions? Make all higher ed institutions earmark their cost with the earning potential of their graduates.  I mean, the Ph.D. philosopher cab driver is a cliché because it actually happens, and next time you have a heavily-tattooed barista steam you a mocha skim latte, you could amuse yourself by asking if their MFA is in fine, performing, or written arts.

My point is simple: while there are, indeed, some suspicious players in the for-profit education sphere, the underlying tax status of an education provider does not predict whether or not a student derives value from the investment he or she makes.  Plenty of folks have walked out of nonprofit colleges and universities with a costly degree that doesn’t actually gain them much in the marketplace, and plenty of folks have walked out of for-profit providers and gotten decent jobs afterwards.  The issues that Congress should concern themselves with have to do with quality of programs, retention/graduation, accreditation, and the like.  We all know there are a lot of nonprofit institutions out there that generate income in excess of cost—it simply becomes a reserve fund or quasi endowment, rather than being paid out to shareholders.

And the bigger point may be that nonprofit education providers should perhaps spend their time developing more competitive offerings rather than worrying about the perceived advantages of the for-profit providers.  All of our research shows that students have a very strong brand preference for the nonprofits as opposed to the for-profits—so make the most of it.

- Rob Moore, Managing Partner

Tags: brand personality, earning power, for-profit education, higher education, legislation, media strategy, nonprofit communications, nonprofit marketing, resources, trends, U.S. Department of Education