Phoenix crumbling into ashes

by John Q on February 7, 2023

While we are on the subject of universities, it’s worth noting the likely acquisition of the so-called University of Phoenix by the University of Arkansas System.

After a string of similar acquisitions, closures and conversion to non-profit status, this is pretty much the end of explicitly for-profit university education in the US. It’s a striking development given the strong support the sector got from Betsy de Vos in the Trump Administration, which turns out to have merely staved off the inevitable. The boom in online education during the lockdown phase of the pandemic seems only to have increased the marketability of for-profits to public universities looking to expand their options.

In retrospect, the whole for-profit boom was not an upsurge in enthusiasm for the free-market but a straightforward regulatory scam, exploiting public aid to low-income students. Australia had an almost identical experience with for-profit vocational education. As Richard Mulgan observed, this is a predictable outcome of introducing the profit motive into a system built largely on assumptions of professionalism and trust.

That’s true of contracting out of public services in general. Without tight regulation (which may or not be feasible) contracts will go to those who’ve worked out clever ways to rort the system[1], not those able to provide a better service at lower costs.

fn1. This Australianism roughly translates as “game the system”.