Proprietary colleges are

for-profit 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." A business entity is not necessari ...

college A college (Latin: ''collegium'') may be a tertiary educational institution (sometimes awarding degrees), part of a collegiate university, an institution offering vocational education, a further education institution, or a secondary sc ...

s and

universities A university () is an educational institution, institution of tertiary education and research which awards academic degrees in several Discipline (academia), academic disciplines. ''University'' is derived from the Latin phrase , which roughly ...

generally operated by their owners, investors, or shareholders in a manner prioritizing

shareholder primacy Shareholder primacy is a theory in corporate governance holding that shareholder interests should be assigned first priority relative to all other stakeholders. A shareholder primacy approach often gives shareholders power to intercede directly a ...

as opposed to education provided by

non-profit institution A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...

(such as non-sectarian, religious, or governmental organization) that prioritize students as

project stakeholders Project stakeholders are persons or entities who have an interest in a specific project. According to the Project Management Institute (PMI), the term ''project stakeholder'' refers to "an individual, group, or organization, who may affect, be affe ...

. Because they are not funded by tax money, their long-term sustainability is dependent on the value they provide relative to the perceived value of a degree from a higher educational institution overall. The increased reliance on federal student aid funds by these "for-profit" schools is of growing concern. Since federal student loans are typically guaranteed by the government, for-profit colleges can reap a profit from taxpayers even if students drop out after enrolling, do not complete a degree, or the degree turns out to be nearly worthless for future employment. Students can be stuck with large and unmanageable debt loads, defaulting at a significantly higher rate than students at traditional non-profit institutions. Non-profit institutions generally depend in part on academic excellence and creating graduates that succeed in their fields, while for-profit schools are often based on attracting large numbers of students with few requirements in terms of academic qualifications for entry because federal loans are provided for good and bad students alike. Some institutions in this category are regionally accredited, while many others are not accredited by a government-recognized accreditation organization and resemble

diploma mills A diploma mill or degree mill is a business that sells illegitimate diplomas or academic degrees, respectively. The term ''diploma mill'' is also used pejoratively to describe any educational institution with low standards for admission and gradua ...

. Sometimes a proprietary college may also overlap with the sector of non-degree granting

business college A business college is a school that provides education above the high school level but could not be compared to that of a traditional university or college. Unlike universities and even junior and community colleges, business colleges typically ...

s. Traditionally, a common argument against for-profit universities has been that the science and theory behind the learning technique is more important than the profit or specific skills gained, thus profit or financial success should not be a motivational factor in education. The argument in favor of for-profit universities has been that a student learning from a professor who has never needed to produce their product or service for profit is ill-prepared for a free-enterprise system. However, as non-profit colleges and universities increasingly utilize professionals and former professionals in their teaching faculties, this distinction has become less significant.

History in the United States

While to some extent proprietary colleges have always existed, their numbers and ubiquitous nature exploded after 1992 when then-committee chairman

John Boehner John Andrew Boehner ( ; born , 1949) is an American politician who served as the 53rd speaker of the United States House of Representatives from 2011 to 2015. A member of the Republican Party, he served 13 terms as the U.S. representative ...

(R-Ohio) of the House of Representatives' Committee on Education and the Workforce killed a federal regulation known as the "90-10 rule", and by simplifying the definition of "institution of higher education" to place for-profit schools on par with nonprofit colleges regarding federal-aid eligibility. The idea behind the 90-10 rule was that if a proprietary school's offerings were truly valuable—for example, if they filled some niche that traditional state and private non-profit educational institutions did not—then surely 10% of their students would be willing to pay completely out-of-pocket, i.e., those who fell above federal guidelines for receiving taxpayer subsidies to attend college. Traditional educational institutions routinely met this bar without even paying attention.

Classification

Proprietary colleges are sometimes called ''

career college A vocational school (alternatively known as a trade school, or technical school), is a type of educational institution, which, depending on the country, may refer to either secondary education#List of tech ed skills, secondary or post-secondar ...

s'', ''

s'', ''proprietary schools'', ''institutes'', or ''for-profit colleges''. The term preferred by the New York State-based Association for Proprietary Colleges is Proprietary colleges. Kevin Kinser, assistant professor of

educational administration Academic administration is a branch of university or college employees responsible for the maintenance and supervision of the institution and separate from the faculty or academics, although some personnel may have joint responsibilities. Some ...

and policy at the

University at Albany The State University of New York at Albany (University at Albany, UAlbany, or SUNY Albany) is a Public university, public research university in Albany, New York, United States. Founded in 1844, it is one of four "university centers" of the St ...

, has proposed a "Multidimensional classification" scheme of for-profit higher education. Kinser's classes of proprietary colleges are organized by these criteria: 1. Geographic scope: * "Neighborhood" – close geographic proximity, in a single state * "Regional" – two or more campuses in neighboring states * "National" – including in states across the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

and virtual colleges 2. Ownership dimension: * "Publicly traded" corporations * Family-owned "enterprise institution(s)" * "Venture institutions" held by private

investor An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital the investor usually purchases some species of pr ...

s 3. Highest degree granted: * Schools that give non-degree certificates * Institutes that grant

associate's degree An associate degree or associate's degree is an undergraduate degree awarded after a course of post-secondary study lasting two to three years. It is a level of academic qualification above a high school diploma and below a bachelor's degree. ...

—such as L.P.N., A.O.S., or A.A.S. * Colleges that grant a

bachelor's degree A bachelor's degree (from Medieval Latin ''baccalaureus'') or baccalaureate (from Modern Latin ''baccalaureatus'') is an undergraduate degree awarded by colleges and universities upon completion of a course of study lasting three to six years ...

—usually a B.S. or BBA * Universities that grant graduate degrees – a master's or

doctorate A doctorate (from Latin ''doctor'', meaning "teacher") or doctoral degree is a postgraduate academic degree awarded by universities and some other educational institutions, derived from the ancient formalism '' licentia docendi'' ("licence to teach ...

References

External links

"College, Inc."
PBS FRONTLINE documentary, May 4, 2010

History in the United States

Classification

See also

References

Further reading

External links