For-profit education (also known as the education services industry or proprietary education) refers to

educational institution An educational institution is a place where people of different ages gain an education, including preschools, childcare, primary-elementary schools, secondary-high schools, and universities. They provide a large variety of learning environments a ...

s operated by private,

profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...

-seeking

business Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." Having a business name does not separ ...

es. For-profit education is common in many parts of the world, making up more than 70% of the higher education sector in

Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federal constitutional monarchy consists of thirteen states and three federal territories, separated by the South China Sea into two regions: Peninsular Malaysia and Borneo's East Mal ...

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the n ...

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Gui ...

and the

Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...

Australia

In 2011, Australia had over 170 for-profit higher education institutions, taking in 6% of the total student population and expected to increase to 20% by 2020. Their qualifications are legally equivalent to those issued by the public universities, but there have been concerns raised by external audits about the quality assurance and standards in for-profit colleges. There are also concerns over the low representation of Indigenous students, students from low socio-economic status backgrounds and students from non-English speaking backgrounds in for-profit colleges, which falls behind that in public universities. However, for-profit colleges do give a second chance to many students who would not otherwise have access to higher education. Partnerships between for-profit "pathway" colleges and public universities have also proven effective in recruiting overseas students. In this model students spend a year at the pathway college before transferring to the university for two years to complete their degree; 70% of students at the pathway colleges are foreign, going on to make up 45% of foreign students recruited by the partner universities.

China

In 2021, China banned for-profit tutoring companies.

United Kingdom

The UK does not permit for-profit schools (independent schools are mostly non-profit making trusts), but there are a number of for-profit institutions in higher education. In 2013,

Michael Gove Michael Andrew Gove (; born Graeme Andrew Logan, 26 August 1967) is a British politician serving as Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations since 2021. He has been Member of Par ...

, then Secretary of State for Education, was said to have drawn up plans to allow free schools and

academies An academy (Attic Greek: Ἀκαδήμεια; Koine Greek Ἀκαδημία) is an institution of secondary or tertiary higher learning (and generally also research or honorary membership). The name traces back to Plato's school of philosop ...

to become for-profit businesses, and in 2014, his successor Nicky Morgan refused to rule out for-profit schools. However, the Conservative manifesto for the 2015 General Election committed the party not to introduce for-profit schools, and after the Conservative victory, Morgan ruled out any place for for-profit schools in the UK education system. In higher education, by contrast, there are a large number of for-profit providers. A study by the

Department for Business, Innovation and Skills , type = Department , logo = Department for Business, Innovation and Skills logo.svg , logo_width = 200px , logo_caption = , picture = File:Лондан. 2014. Жнівень 26.JPG , seal = , se ...

identified 674 privately funded institutions and estimated that the majority were for-profit businesses (based on survey returns from 249 providers, of which 136 identified as for-profit). Most of the 136 for-profit colleges that returned the survey were either non-specialist (56) or specialized in business, management and accountancy (49). There are three for-profit universities in the UK: the

University of Law , motto_lang = lat , mottoeng = Let us know the laws and rights , established = ,2012 (university status) , closed = , type = Private, for-profit , endowment ...

BPP University BPP University is a private university in the United Kingdom. History Name The university takes its name from the founders Alan Brierley, Richard Price and Charles Prior, who in 1975 set up Brierley Price Prior to train accountancy students. ...

and

Arden University Arden University is a private, for-profit teaching university in the United Kingdom. It offers a variety of undergraduate and post-graduate programmes with both blended and online distance learning delivery options. Its head office is in Co ...

, which are the only for-profit institutions with degree-awarding powers.

United States

There are two types of for-profit

school A school is an educational institution designed to provide learning spaces and learning environments for the teaching of students under the direction of teachers. Most countries have systems of formal education, which is sometimes co ...

s. The first major category of for-profit schools is

post-secondary Tertiary education, also referred to as third-level, third-stage or post-secondary education, is the educational level following the completion of secondary education. The World Bank, for example, defines tertiary education as including univers ...

institutions which operate as businesses, receiving fees from each student they enroll. The second type of for-profit schools, which is less prevalent in the United States, are K–12

private schools An independent school is independent in its finances and governance. Also known as private schools, non-governmental, privately funded, or non-state schools, they are not administered by local, state or national governments. In British En ...

which often operate as businesses. However, in many public schools, private and for-profit forces still exist. One such force is known as an

education management organization An education management organization (EMO) is a term of art describing a for-profit entity that manages schools. It provides a distinction from charter management organization which is a ''non-profit'' manager of charter schools. The terms are oft ...

(EMO); these are

Management Organizations Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities ...

for primary and secondary educational institutions. EMOs work with

school district A school district is a special-purpose district that operates local public primary and secondary schools in various nations. North America United States In the U.S, most K–12 public schools function as units of local school districts, w ...

s or

charter school A charter school is a school that receives government funding but operates independently of the established state school system in which it is located. It is independent in the sense that it operates according to the basic principle of autono ...

s, using public funds to finance their operations. They typically offer schools back-office services, but may also provide teacher training, facility support, and other management related services. In the 2018-19 school year, roughly 10% of charter schools contracted with a for-profit EMO, while about 30% contracted with a non-profit

charter management organization A charter management organization (CMO) is an educational organization that operates charter schools in the United States. Charter schools are public schools that operate independently of the local government school district. A CMO contracts with ...

(CMO). While supporters of EMOs argue that the

profit motive In economics, the profit motive is the motivation of firms that operate so as to maximize their profits. Mainstream microeconomic theory posits that the ultimate goal of a business is "to make money" - not in the sense of increasing the firm's ...

encourages efficiency, this arrangement has also drawn controversy and criticism.Kozol, Jonathan. ''The Shame of the Nation''. Three Rivers Press, 2005. See chapter 4 "Preparing Minds for Markets" and others.

Kevin Carey Kevin Carey (born October 6, 1970) is an American higher education writer and policy analyst. He serves as Director of the Education Policy Program at New America, a non-profit, non-partisan research organization based in Washington, D.C. He wr ...

of the

New America Foundation New America, formerly the New America Foundation, is a think tank in the United States founded in 1999. It focuses on a range of public policy issues, including national security studies, technology, asset building, health, gender, energy, educ ...

said in a 2010 column in ''

The Chronicle of Higher Education ''The Chronicle of Higher Education'' is a newspaper and website that presents news, information, and jobs for college and university faculty and student affairs professionals (staff members and administrators). A subscription is required to re ...

'' that "For-profits exist in large part to fix educational

market failure In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. Market failures can be viewed as scenarios where indiv ...

s left by traditional institutions, and they profit by serving students that public and private nonprofit institutions too often ignore." He also noted that "There's no doubt that the worst for-profits are ruthlessly exploiting the commodified college degree. But they didn't commodify it in the first place."

References

Bibliography

* Brown, H.; Henig, J.; Holyoke, T.; Lacireno-Paquet, N. (2004). "Scale of Operations and Locus of Control in Market- Versus Mission-Oriented Charter Schools" ''

Social Science Quarterly ''Social Science Quarterly'' is a quarterly peer-reviewed academic journal published by Wiley-Blackwell on behalf of the Southwestern Social Science Association. The journal covers political science, sociology, economics, history, social wo ...

''; 85 (5) Special Issue Dec 2004. pp. 1035–1077 * Halperin, D. (2014). ''Stealing America's Future: How For-Profit Colleges Scam Taxpayers and Ruin Students' Lives'' * Hentschke, G. et al. (2010). ''For-Profit Colleges and Universities: Their Markets, Regulation, Performance, and Place in Higher Education'' * Mettler, S. (2014). "Degrees of Inequality" * Blumenstyk, G. (2014). ''American Higher Education in Crisis?: What Everyone Needs to Know'' * Breneman, D. et al. (2006). ''Earnings from Learning: The Rise of For-profit Universities'' * Halperin, D. (2014). ''Stealing America's Future: How For-Profit Colleges Scam Taxpayers and Ruin Students' Lives'' * Hentschke, G. et al. (2010). ''For-Profit Colleges and Universities: Their Markets, Regulation, Performance, and Place in Higher Education'' * Kinser, K. (2006). ''From Main Street to Wall Street: The Transformation of For-Profit Higher Education'' * McGuire, M. (2012). ''Subprime Education: For-profit Colleges and the Problem with Title IV Student Aid'' Duke Law Journal, 62 (1): 119-160 * Morey, A. (2004). ''Globalization and the Emergence of For-profit Education'' * Murphy, J. (2013). ''Mission Forsaken—The University of Phoenix Affair With Wall Street'' * Natale, S., Libertella, A., & Doran, C. (2015;2013). "For-profit education: The sleep of ethical reason." ''

Journal of Business Ethics The ''Journal of Business Ethics'' is a peer-reviewed academic journal published by Springer Nature B.V. The Journal of Business Ethics is one of th50 top business journals used by the Financial Times (FT)in compiling the prestigious Business Sch ...