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 Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...

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

Malaysia Malaysia is a country in Southeast Asia. Featuring the Tanjung Piai, southernmost point of continental Eurasia, it is a federation, federal constitutional monarchy consisting of States and federal territories of Malaysia, 13 states and thre ...

Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...

and the

Philippines The Philippines, officially the Republic of the Philippines, is an Archipelagic state, archipelagic country in Southeast Asia. Located in the western Pacific Ocean, it consists of List of islands of the Philippines, 7,641 islands, with a tot ...

Australia

In 2011, Australia had over 170 for-profit

higher education Tertiary education (higher education, or post-secondary education) is the educational level following the completion of secondary education. The World Bank defines tertiary education as including universities, colleges, and vocational schools ...

institutions, representing 6% of the total student population. Their qualifications are legally equivalent to those issued by the public universities, but there have been concerns raised by external audits about the quality of education and standards in for-profit colleges. There are 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 lag public universities. However, for-profit colleges do provide 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 to complete their degree; 70% of students at pathway colleges are foreign, going on to make up 45% of foreign students recruited by 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

. In 2013,

Michael Gove Michael Andrew Gove, Baron Gove (; born Graeme Andrew Logan, 26 August 1967) is a British politician and journalist who served in various Cabinet of the United Kingdom, Cabinet positions under David Cameron, Theresa May, Boris Johnson and Rish ...

, then

secretary of state for education The secretary of state for education, also referred to as the education secretary, is a Secretary of State (United Kingdom), secretary of state in the Government of the United Kingdom, responsible for the work of the Department 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 tertiary education. The name traces back to Plato's school of philosophy, founded approximately 386 BC at Akademia, a sanctuary of Athena, the go ...

to become for-profit businesses, and in 2014, his successor

Nicky Morgan Nicola Ann Morgan, Baroness Morgan of Cotes, (; born 10 October 1972) is a British politician who served as Secretary of State for Education and Minister for Women and Equalities from 2014 to 2016 and Secretary of State for Digital, Culture, ...

refused to rule out for-profit schools. However, the

Conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...

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 The Department for Business, Innovation and Skills (BIS) was a ministerial department of the Government of the United Kingdom. It was created by the Gordon Brown premiership on 5 June 2009 by the merger of the Department for Innovation, Uni ...

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 The University of Law (founded in 1962 as The College of Law of England and Wales) is a Private university, private Proprietary college, for-profit university in the United Kingdom, providing undergraduate and postgraduate degrees in law, busi ...

BPP University BPP University is a Private university#United Kingdom, private university in the United Kingdom. Running courses in law, accountancy, business, nursing, and technology, the for-profit institution is currently a part of BPP Holdings, BPP Educ ...

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

United States

There are two types of for-profit

school A school is the educational institution (and, in the case of in-person learning, the Educational architecture, building) designed to provide learning environments for the teaching of students, usually under the direction of teachers. Most co ...

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

post-secondary Tertiary education (higher education, or post-secondary education) is the educational level following the completion of secondary education. The World Bank defines tertiary education as including universities, colleges, and vocational schools ...

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 A private school or independent school is a school not administered or funded by the government, unlike a public school. Private schools are schools that are not dependent upon national or local government to finance their financial endowme ...

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 for primary and secondary educational institutions. EMOs work with

school district A school district is a special-purpose district that operates local public Primary school, primary or Secondary school, secondary schools or both in various countries. It is not to be confused with an attendance zone, which is within a school dis ...

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 ...

. 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 ...

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 of the

New America Foundation New America, formerly the New America Foundation, is an American Modern liberalism in the United States, liberal think tank founded in 1999. It focuses on a range of public policy issues, including national security, technology, health, gender, ...

said in a 2010 column in ''

The Chronicle of Higher Education ''The Chronicle of Higher Education'' is an American newspaper and website that presents news, information, and jobs for college and university faculty and student affairs professionals, including staff members and administrators. A subscription ...

'' 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.Paul Krugman and Robin Wells Krugman, Robin Wells (2006 ...

s left by traditional institutions, and they profit by serving students that public and private nonprofit institutions too often ignore." He also said 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''; 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. The Journal of Business Ethics is one of the journals used by the Financial Times for in compiling the Business Schools research rank. The Journal of Bus ...