Many education stakeholders have voiced concerns that for-profit education providers are more interested in making money than in serving students. As AEI's Rick Hess pointed out at an AEI Google+ Hangout this Wednesday, some of this suspicion and skepticism is well deserved. For-profit providers are not always virtuous, admitted Michael Horn of the Clayton Christensen Institute, but this is also true of numerous nonprofit and public providers. Digital Learning Now's John Bailey argued that there are profit-seeking motives among nonprofit and public institutions, pointing to Harvard University's endowment, which currently exceeds $30 billion, as an example.
Panelists largely agreed that today's policies do not incentivize the right things in K–12 or higher education. Current rules and regulations limit opportunities for for-profit providers, excluding them from competitive grant programs and creating additional barriers to market entry. But AEI’s Andrew Kelly was optimistic that we can create policy solutions that would help change the incentives without excluding the entire private sector. He noted that the private sector has been recognized for delivering education to traditionally underserved students, readily attracting capital and talent and scaling more rapidly than many nonprofits.
Horn concluded that while for profits do have weaknesses, education -- an industry currently dominated by nonprofits -- does not work that well. He encouraged policymakers to overcome the for-profit and nonprofit divide and to focus on how they can best serve students.
--Lauren Blair Aronson
Can an institution be for profit and for students? In education, for-profits have long been regarded as an evil imposition. But at a time when the educational status quo is defined by tight budgets, disappointing outcomes, high remediation rates, and rising expectations, it would serve the American education system well to relax the reflexive criticism of for-profits and to instead ask whether, when, and how for-profit providers can promote quality and cost-effectiveness to better serve more students.
Tune in for a Google Hangout discussion about how policymakers can create an environment where the power of for-profit innovation and investment is leveraged to better serve students.
If you do not have a Google+ account, we invite you to watch the livestream on this page on July 24 at 2:00 PM ET.