US traditional public and non-profit private tertiary institutions have frequently criticised their for-profit competitors for failing to ‘be like us’. The latter’s business plan does not complement the former’s self-anointed purity. If for-profits pursue an operating surplus or profit for their owners, it must be at the expense of academic quality, they surmise.
In recent years, as the for-profit’s aggregate enrolments have dramatically grown, so has the volume of criticism.
The public and non-profit private sectors through their professional organisations and lobbyists question the quality of for-profits’ academic programmes. Supporting the purists are data reported by the National Center for Educational Statistics. In 2010 for-profits spent far less than their competing sectors, $2,659 on average per student.
At the other extreme the purists point to the for-profits’ relatively high marketing expenditures. For example, in 2007 and 2008 the Apollo Group, owner of the University of Phoenix, spent over $800 million on sales and marketing, significantly more than the $675 million it spent on teaching and classroom expenses.
Moreover, the detractors assert that these high marketing expenditures are focused on misleading prospective students regarding their employability after they have graduated and the debt incurred by them to pay tuition fees.
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