The role of the proprietaries in higher education

One of the things which I had a hand in early in my career, which I continue to think was ultimately a bad idea was the recharacterization of higher education to postsecondary education. In the 1972 amendments to the higher education act there was a long discussion about how to assure the dignity of anything post high school could be accomplished. The idea was to generalize and make the absurd recasting that all things post high school are the same - therefore we now talked about postsecondary education. Part of the push for that came from the proprietary (for profit) sector which at that time was mostly in the vocational market.

But since that law was adopted the proprietary institutions have moved more agressively into the traditional markets of higher education. The University of Phoenix is a good example of that - offering classes and programs in a narrow band of areas but by most accounts doing a pretty good job at what they try to accomplish. In the discussions in the traditional higher education - both public and independent - there is a lot of concern that the proprietaries will come into the more traditional areas and degree programs and clean the public and independents lunch. Afterall, Phoenix has done an impressive job in going after business education and teachers.

This afternoon as I was working out I saw two advertisements for programs of proprietaries. While I think they will go into a lot of areas - I have been a skeptic about how successful they will be in many of the traditional areas of higher education. The ads were for a pharmaceutical technician and for people who want to go into digital animation. One is a bit more than a traditional vocational program - created in part to solve the extreme shortage of pharmacists. The other is a set of specific skills.

As I have thought about where the proprietaries are most likely to be successful it is likely to be in these kinds of areas - course areas where there is a slight increase in skills and those where specific technical skills can be taught. I realize that competition in traditional undergraduate programs will also be there - but for the vast majority of programs and the vast majority of institutions - the competition will not be fierce. Proprietaries satisfy their shareholders. The good public and independent institutions work a lot to satisfy their customers. Peter Drucker wrote, in a book on non-profit management, that the first job for a non profit was to identify what the customer values and then figure out how to achieve that. So long as the non-profit and public institutions remember the Drucker maxim - they will be just fine. Families, in the undergraduate arena, choose a college for a lot more than just the required courses or the degree. A lot of those values are what one would call ambience issues. The proprietaries don't pay as much attention to those sets of issues. They are really working in a different market. Not a better or worse one - but simply different. But if the traditional institutions forget the lessons of ambience - then the proprietaries will always be able to compete with them with great success.