By definition, a proprietary college or university is one which operates as a private, profit-seeking business.
Some popular examples of proprietary schools in the United States are the University of Phoenix, DeVry University, Kaplan University, Strayer University, and ITT Technical Institute.
I had a conversation recently with a colleague of mine, about whether or not all colleges and universities in the U.S. should truly be considered proprietary schools. Is the goal at all colleges to make a profit?
While this may certainly seem true based on the rapidly rising costs of tuition, let’s take a closer look at the heart of the issue.
Proprietary Schools vs. Non-Profit Schools
There is a definite stigma associated with a proprietary school. This is partly based on the fact that many proprietary schools are not accredited by the same governing bodies that accredit most major non-profit colleges and universities. Therefore, a degree from a proprietary school will likely not transfer into a non-profit college. Some employers also may not accept a degree from a proprietary college or university.
For example, I work as a staff member on a college campus. My employer would not accept my academic credentials, had they been awarded through a proprietary school. That is not unique.
When I have reviewed resumes for numerous positions we have hired in the past few years, my mind instantly places a non-profit university degree above that of a proprietary school. Valid or not, the stigma is very real.
Proprietary schools exist to reach a subsection of our educational system that for a number of reasons, cannot, or will not, ever attend a traditional non-profit school. This is often due to finances, but is quite often due to flexibility. Proprietary schools often bend over backwards to accommodate their students and offer classes at flexible times, as well as in flexible formats. Great examples of this are second degree nursing programs. They have done a masterful job, in my opinion, of reaching their intended market.
At their core, proprietary schools exist to make a profit. They are run as businesses, and therefore excess, waste, and redundant processes are highly scrutinized. Expenses common on every non-profit college campus simply do not exist with a proprietary school. They don’t have residential housing, they don’t have a gym facility, no student center, no museums, no chapels, no grassy commons areas, no history, no tradition, and no athletics.
Should non-profit colleges take a cue from the proprietary college playbook, or are “non-profit” colleges already heading down that road in a different vehicle?
The Non-Profit, Profit Machine
We are all aware that college costs are rising. College revenues, from tuition and fees, sponsored research, and fundraising, are also growing at unprecedented levels.
Flush with cash, where is all of this money going? A CFO on a major college campus will likely tell you that the evolving college landscape requires a college or university to invest heavily in their infrastructure to be relevant heading toward 2020. This requires major investments in facilities, faculty/staff, technology, and research. Without these expenses, a college cannot hope to complete for the best and brightest students of our future.
The question becomes, however: Even though this profit may not be lining the pockets of an overpaid CEO, could this money be put to a better use? Is a non-profit university that spends student dollars on new gym facilities and higher faculty wages any better than a proprietary school that pays its CEO tens of millions each year?
One can certainly argue that the education received at a traditional non-profit college is far superior to that of a proprietary school. However, are proprietary schools doing a better job of teaching the “real world” skills that employers are looking for in the job market? Are liberal arts schools a thing of the past?
In the U.K. education system there is no stigma for proprietary schools. Why? Because the U.K. government places a premium on job placement and ensuring graduates land well-paying jobs. I’m not saying that is the answer to our educational system, but it could sure radically change the lives of many college graduates in the U.S. who flounder after college because they have no employable skills.
This begs the bigger question: What is the real goal of education? I can’t purport to answer that here, but I think it is important to understand how similar many non-profit schools are to their blackballed proprietary school neighbors down the road.
Do you have any experience in a proprietary school or would you send your children there?
DJ works in financial services at a large public university. He lives in the Southeast with his wife and young daughter.