For-Profit Innovation Will Unravel Higher-Education Status Quo
EspañolWith college students back in classes and student debt continuing to top out US$1 trillion nationwide, the market for college appears to be at its peak. It’s easier than ever to get a student loan, and colleges frequently run commercials on television and radio stations informing listeners of the importance of getting a college degree.
Despite this rise in commercialization of schooling, however, more and more potential students are questioning whether or not the debt is really worth it.
For-profit education gets an ugly rap, a target of hit pieces, and rightfully so in many instances. These schools often aim to boost enrollment to take advantage of federal student aid, knowing that getting more students means getting more money from federal loans. Some of their tactics are questionable, and their graduates don’t perform as well as graduates from many nonprofit schools.
This opens up an opportunity for innovation. While some for-profit schools have been the targets of consumer ire, the need for an alternative option to the traditional college model, including the debt that comes with it, has led to some recent innovation in for-profit education. The Atlantic recently featured a story on the Minerva Project, for example, a version of MOOC (Massive Open Online Course). Other companies are also looking to substitute the traditional college model by reviving the apprenticeship.
One such organization is Praxis, a 10-month program that costs less than a semester at most colleges. Founded in 2013, Praxis connects students with small and medium-sized businesses and startups to show them what a career in the real world is all about.
Students in the program aren’t fixed to one geographical location, and can participate from wherever their business partner is located. If a student is going to college just to get a great paying job, he can save himself years of his life and thousands of dollars by participating in Praxis.
“The problem with non-profit schools is that the provider of the good [professors] and the consumers [students] are not in line. There are so many levels between the providers of education and how the university makes money that faculty are not held accountable directly to the students,” Praxis CEO Isaac Morehouse notes. “Between academic bureaucracy, government grants and loans, alumni donations, and other sources, universities don’t need to appease the needs of every student that walks in their doors.”
That’s why the for-profit model is so important to Morehouse. By providing a profit-and-loss signal, participants really get treated as consumers, rather than cogs in a machine. The “For-profit alternative gives [the] students direct accountability over the organization.” If a student isn’t satisfied with the return on investment, “[his] money will leave the organization and [he] tell [his] friends not to bother with them. The feedback loop is fast and ruthless. The accountability aspect of a for-profit is critical to the education.”
Praxis has already completed one class with all participants receiving full-time job offers at or above that at which most college graduates are offered. The program just launched its second class and is looking to grow over the coming years.
Minerva is another program that works on the for-profit model by following a four-year academic experience, much like a traditional college experience but with unique course design and world travel as part of its experience. At the cost of $28,000 a year, Minerva carries a price tag similar to traditional college but better equips students intellectually and culturally than any traditional college experience. Minerva offers future students the chance to experience a different educational experience if working or entrepreneurial pursuits isn’t what they want to learn right out of high school.
While for-profit colleges have reached a nadir in popular press, this doesn’t mean the for-profit educational model has to. It provides a potential reprieve for students who are too often treated as mere economic inputs by universities that are numb to their concerns and professors who are focused on academic research. Entrepreneurs may now be innovating a new solution to what is oftentimes seen as an immovable industry.
Edited by Fergus Hodgson.