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. For-profit education is common in many parts of the world, making up more than 70℅ of the higher education sector in India, Malaysia, Japan, South Korea, Indonesia and the Philippines.[1]

United States[edit]

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.[2]

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."[3]


In 2011 Australia had over 170 for-profit higher education institutions, taking in 6% of the total student population and expected to increase to 20% by 2020. Their qualifications are legally equivalent to those issued by the public universities, but there have been concerns raised by external audits about the quality assurance and standards in for-profit colleges.[1]

There are also concerns over the low representation of Indigenous students, students from low socio-economic status backgrounds nd students from non-English speaking backgrounds in for-profit colleges, which falls behind that in public universities. However, for-profit colleges do give a second chance to many students who would not otherwise have accessed to higher education. Partnerships between for-profit "pathway" colleges and public universities have also proven effective in recruiting overseas students. In this model students spend a year at the pathway college before transferring to the university for two years to complete their degree; 70% of students at the pathway colleges are foreign, going on to make up 45% of foreign students recruited by the partner universities.[1]

United Kingdom[edit]

The UK does not permit for-profit schools, but there are a number of for-profit institutions in higher education. In 2013 Michael Gove, then Secretary of State for Education, was said to have drawn up p!and to allow free schools and academies to become for-profit businesses, and in 2014 his successor, Nicky Morgan refused to rule out for-profit schools. However, the Conservative manifesto for the 2015 General Election committed the party to not introducing for-profit schools and, following the Conservative victory, Morgan ruled out any place for for-profit schools in the UK education system.[4]

In higher education, by contrast, there are a large number of for-profit providers. A study by the Department for Business, Innovation and Skills identified 674 privately-funded institutions and estimated that the majority were for-profit businesses (based on survey returns from 249 providers, of which 136 identified as for-profit). Most of the 136 for-profit colleges that returned the survey were either non-specialist (56) or specialised in business, management and accountancy (49).[5] There are three for-profit universities in the UK: the University of Law, BPP University and Arden University, which are the only for-profit institutions with degree-awarding powers.

See also[edit]


  1. ^ a b c Mahsood Shah; Sid Nair. "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. 
  2. ^ Kozol, Jonathan. The Shame of the Nation. Three Rivers Press, 2005. See chapter 4 "Preparing Minds for Markets" and others
  3. ^ Kevin Carey (July 25, 2010). "Why Do You Think They're Called For-Profit Colleges?". The Chronicle of Higher Education. 
  4. ^ Jon Stone (18 May 2015). "For-profit schools have no place in Britain, says Tory Education Secretary Nicky Morgan". The Independent. 
  5. ^ Tristram Hughes, Aaron Porter, Stephen Jones and Jonathan Sheen (June 2013). Privately funded providers of higher education in the UK (Report). Department for Business Innovation and Skills. 


  • 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
  • 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
  • Ruch, R. (2003). Higher Ed Inc.: The Rise of the For-Profit University