For-profit education

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For-profit education (also known as the education services industry or proprietary education) refers to educational institutions operated by private, profit-seeking businesses.

There are three types of for-profit schools. One type is known as an educational management organization (EMO), which are primary and secondary educational institutions. EMOs work with school districts or charter schools, using public funds to finance operations. The majority of for-profit schools in the K–12 sector in America function as EMOs, and have grown in number in the mid-2000s. The other major category of for-profit schools are post-secondary institutions which operate as businesses, receiving fees from each student they enroll. A third type of for-profit schools, which is less prevalent in the United States, are K–12 schools which operate as businesses.

EMOs function differently from charter schools created in order to carry out a particular teaching pedagogy; most charter schools are mission-oriented, while EMOs and other for-profit institutions are market-oriented. While supporters argue that the profit motive encourages efficiency, this arrangement has also drawn controversy and criticism.[1]

Kevin Carey of the New America Foundation said in a 2010 column in The Chronicle of Higher Education that "For-profits exist in large part to fix educational market failures left by traditional institutions, and they profit by serving students that public and private nonprofit institutions too often ignore." He also noted that "There's no doubt that the worst for-profits are ruthlessly exploiting the commodified college degree. But they didn't commodify it in the first place."[2]

For-profit education in Australia[edit]

Private for-profit higher education has developed hastily in numerous parts of the world. This growth is accredited to many influences, including an enlargement of the student population and the acknowledgement that wider access to higher education will be economically valuable to individuals, governments and society as a whole. In Australia, the number of students in private for-profit higher education is rising, with melodramatic forecasts for the next 10 years (Shah, Mahsood, Nair and Chenicheri, 2013). The Australian tertiary education sector encompasses 36 public Universities, three private and one foreign University. The sector contains four self-accrediting organizations and more than 170 private for-profit higher education institutions which compromise and discuss credentials at all levels in the Australian Qualifications Framework (Shah, Mahsood, Nair and Chenicheri, 2013). The Australian experience, based on the outcomes of external quality audits of all universities and private for-profit higher education, shows alarming issues related to quality in the private sector” (Shah, Mahsood, Nair and Chenicheri, 2013).


“Private for-profit higher education in Australia will continue to grow. Based on the current trend, it is projected that by 2020 private for-profit higher education will account for 20% of all higher education enrolments. This offers both opportunities and threats within the sector, but the growth is also dependent on future government policies related to quality assurance, accreditation and migration. The role of private for-profit higher education is unclear from the government’s higher education review” (Shah, Mahsood, Nair and Chenicheri, 2013, p.829).

See also[edit]


  1. ^ Kozol, Jonathan. The Shame of the Nation. Three Rivers Press, 2005. See chapter 4 "Preparing Minds for Markets" and others
  2. ^ Kevin Carey (July 25, 2010). "Why Do You Think They're Called For-Profit Colleges?". The Chronicle of Higher Education. 

Natale, S., Libertella, A., & Doran, C. (2015;2013;). For-profit education: The sleep of ethical reason. Journal of Business Ethics, 126(3), 415-421. doi:10.1007/s10551-013-1938-1

Shah, M., & Sid Nair, C. (2013). Private for-profit higher education in Australia: Widening access, participation and opportunities for public-private collaboration. Higher Education Research and Development, 32(5), 820-832. doi:10.1080/07294360.2013.777030


  • Brown, H.; Henig, J.; Holyoke, T.; Lacireno-Paquet, N. (2004). "Scale of Operations and Locus of Control in Market- Versus Mission-Oriented Charter Schools" Social Science Quarterly; 85 (5) Special Issue Dec, 2004. pp. 1035–1077
  • Halperin, D. (2014). Stealing America's Future: How For-Profit Colleges Scam Taxpayers and Ruin Students' Lives
  • Hentschke, G. et al. (2010). For-Profit Colleges and Universities: Their Markets, Regulation, Performance, and Place in Higher Education
  • Mettler, S. (2014). "Degrees of Inequality"
  • Blumenstyk, G. (2014). American Higher Education in Crisis?: What Everyone Needs to Know
  • Breneman, D. et al. (2006). Earnings from Learning: The Rise of For-profit Universities
  • Halperin, D. (2014). Stealing America's Future: How For-Profit Colleges Scam Taxpayers and Ruin Students' Lives
  • Hentschke, G. et al. (2010). For-Profit Colleges and Universities: Their Markets, Regulation, Performance, and Place in Higher Education
  • Kinser, K. (2006). From Main Street to Wall Street: The Transformation of For-Profit Higher Education
  • McGuire, M. (2012). Subprime Education: For-profit Colleges and the Problem with Title IV Student Aid Duke Law Journal, 62 (1): 119-160
  • Morey, A. (2004). Globalization and the Emergence of For-profit Education
  • Murphy, J. (2013). Mission Forsaken—The University of Phoenix Affair With Wall Street
  • Ruch, R. (2003). Higher Ed Inc.: The Rise of the For-Profit University