Elite For-Profit Schools Chase a Growing Market

The New York Times ^ | 21 September 2010 | Jenny Anderson

[The Pack Knight]

The British International School of New York offers spacious waterfront classrooms, small computers encased in rubber for small people who tend to drop them, and a pool for the once-a-week swimming classes required for all students.

But there is nothing within its halls or on its Web site that indicates what differentiates British International from the teeming masses of expensive private schools in New York: It is run for profit.

It is one of a small number of large for-profit schools that have opened recently or plan to open in New York City next year. While they are a speck on the city’s private-school landscape, for-profit schools are practically the only significant primary and secondary institutions to have started up in the last decade, and may represent the future of private-school growth.

Parents and consultants have begun to take notice, and the Independent School Admission Association of Greater New York, the umbrella group for the city’s elite private schools, is contemplating withdrawing its requirement that members be nonprofit, two association members said.

James Williams, executive director of the National Independent Private School Association, whose members are for-profit schools, said that although private-school enrollment nationally had fallen because of the recession, he had seen a small upswing in applications for accreditation from for-profit schools, with significant growth in schools for children with special needs.

[The Pack Knight]

Interesting article and worth a read, even if it means going to the NY Times website.

Those of us who want to see more school choice ought to take interest in how this plays out. For-profit primary and secondary schools are a natural and perhaps desirable consequence of a free market in K-12 education.

So far this phenomenon seems mostly limited to truly elite schools. But lets say for-profit grade schools and high schools want to open up to serve middle-class and even lower-income markets. Should they be licensed differently than parochial schools or other non-profits? Should they qualify for vouchers in states that have them?

For-profit education does have a rather checkered history in this country, at least at the college level. Will competition and the profit motive push for-profit schools to provide a higher-quality education than their non-profit and government competitors? Or will they exist for the purpose of ripping off the government and its students like the University of Phoenix?

[Nat Turner]

The problem is not the pro-profit schools but the bloated government educrats in the Dept of Ed. Get rid of them and all those federal rules and $$ and the system will reset itself...

[GenXteacher]

It is interesting. I often mull over the notion of creating a private high school, that would be affordable to ordinary people. So far I really haven’t come up with a way to make it profitable though- I guess if you want to make a profit, then it has to be a school for the wealthy. Or, maybe you could sell stock... Education doesn’t really fit the business model......

[HereInTheHeartland]

There is a group in our area doing this on a Biblical model, and they are getting a lot of funding and things donated.

They don’t let the kids have any excuses for not doing well. It is mainly inner city kids that attend I think. I think it is working well.

[Cacique]

btt

[The Pack Knight]

The big problem I’ve seen with for-profit universities is that academic rigor is compromised by the need for retention. When you rely on turning over a high volume of tuition-paying students in order to maintain a positive cash flow, it’s hard to fail students for poor performance.

Of course, the other big problem is outright fraud in essentially selling worthless degrees on credit supplied by the taxpayers. Students at for-profit institutions are twice as likely to default on their student loans as those at public schools, and almost three times as likely as students at traditional private schools. I can only imagine the type of mischief that could be wrought with vouchers.

While I am not philosophically hostile to the idea of for-profit education, it’s hard to think of a business model that can be profitable while maintaining academic integrity.