The Underachieving Education Business
Capitalism has produced many high-quality products and services, from smart phones to high-speed transport and compelling entertainment. Yet the profit motive, essential in so many fields, seems to have disappointed in one crucial area: education.
NEW YORK – Capitalism has produced many high-quality products and services, from smartphones to high-speed transport and compelling entertainment. Yet the profit motive, essential in so many fields, seems to have disappointed in one crucial area: education.
In the United States, for-profit universities have a six-year graduation rate of 22%, far below the 60% achieved by not-for-profit institutions. The former spend 23% of their revenue on recruiting new students, compared with a mere 1% spent by non-profit institutions. At the primary and secondary levels, charter schools (publicly funded independent schools) run by for-profit companies are 20% less likely than non-profit institutions to meet proficiency standards, with some of the weakest results coming from the largest for-profit institutions. Even companies that provide textbooks, educational software, management systems, and student loans fail to achieve the level of excellence reached in other sectors.
For-profit education is not just a US phenomenon; it is part of a global trend. New for-profit universities are appearing wherever demand for higher education is strong. In developing Asia and Latin America, scores of new classroom and online English-language preparation programs are trying to meet demand, though it may be too early to judge their quality.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.
Already have an account or want to create one? Log in