For-Profits Thrive while Universities Decline

As the university continues its struggle to improve declining enrollment, for-profit institutions are seeing increased numbers, but administrators say there is a clear difference in service.

Paul Sarvela, vice president for Academic Affairs, said at the Sept. 10 Board of Trustees meeting, a report from the Chronicle of Higher Education outlined how for-profit institutions, such as the University of Phoenix, are growing faster than community colleges, public four-year institutions and private not-for-profit institutions, such as DePaul University.

“For-profit institutions are an area of tremendous growth, not only in the United States, but in Illinois,” Sarvela said. “Many of the for-profit institutions are adding new programs and courses of study throughout the state.”

Sarvela said enrollment in four-year, for-profit programs has increased 14 percent in the past couple years, while the university has seen a 1.6 percent decline in enrollment this year.

According to the University of Phoenix Web site, there were 420,700 students enrolled by the end of May 2009, with an average student-age of 34 years old. The institution has a core faculty of 1,410 with an average of 19 years experience in their fields, according to the Web site. Sarvela said these institutions, especially in Illinois, are enrolling the working adult and focusing on marketplace demands.

Sarvela said the University of Phoenix and its parent company, the Apollo group, spent $228 million in the last quarter on marketing for prospective students.

“What (the University of Phoenix) spent last quarter on marketing, we get roughly the same amount in our general operations budget,” Sarvela said. “They are spending a tremendous amount of money in marketing.”

Chancellor Sam Goldman said for-profit institutions also have fewer expenses than traditional universities and colleges.

“They use everybody else’s space; they don’t pay for it,” Goldman said. “We have brick and mortar that we have to pay for, that we build and so on. They don’t. They don’t worry about that.”

The biggest challenge facing these institutions is to find qualified faculty, Sarvela said. Goldman said most often, for-profit institutions hire local teachers to instruct classes while they are earning a doctorate from the same institution.

Goldman said he doesn’t necessarily consider for-profit institutions to be comparable to traditional universities such as SIUC. It fills a niche, Goldman said, but does not provide the full experience and education of traditional four-year universities and colleges.

“We are not appropriately compared to a for-profit,” Goldman said. “We provide a value-added education and some people want that, many people don’t. It depends on where you go.”


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