While browsing through the Association of Private Sector Colleges and University’s fall magazine, The Link, I was struck by the advertisements. To be clear, a “Private Sector College” is a euphemism for a proprietary institution, and the bulk of their quarterly magazine’s content, at least for the last year or two, is devoted to criticism of gainful employment legislation, and to an extent, whining about public and not-for-profit privates. As you can imagine, their magazine is chocked full of marketing for various companies which offer services that the for-profit sector can use to maximize their profits—things like lead generation companies, website analytic tools that promise to give you more insight about the prospective students checking out your website, and online career tools that allude to higher placement rates. None of this was surprising to me—after all, it is only natural that for-profit educational institutions are going to be viable marketing targets for companies looking to make money in a new area.
What struck me most however, were the ads that were offering service in the area of compliance. For example, Compliance Point is a company that is offering their ACE program, an ‘online compliance portal’, to colleges and universities. Their services include everything from ‘secret shoppers’ to snoop on Admissions Representatives to job placement verification/compliance, and even general “gainful employment compliance”. In this one magazine, I counted no fewer than 5 ads which offered compliance-related services—offering to be “your source for default prevention services” and using terminology such as “compliance driven”, “default preventative”, and event the classic fear-tactic: “are you protected?” to lure the institutions to their compliance-management product.
In my naiveté, I was imagining gainful compliance being handled by the institutions directly, perhaps with the assistance of outsourced services for certain components. I was picturing concerned professionals thinking strategically about how practices might need to change in order to comply with regulations, and discussing strategies with faculty and administrators at various levels of the institution. In the early stages of the development of gainful employment legislation, when I was working at a for-profit, I was not imagining gainful employment compliance as the type of thing that we could simply hand off to an outsourced company to manage. Although I was concerned about the work-load and transitional pains that we might experience, completely outsourcing this responsibility seemed… well, irresponsible. It appears that since that time (I left the for-profit sector just over a year ago), compliance management for gainful employment regulations has blossomed into a full industry itself… and, I imagine, a potentially quite profitable industry too.
Although the various compliance management products are offering to take the burden of compliance management off the shoulders of the institution, I have to wonder about where the buck will stop when inevitably a client of one of these companies is found to be non-compliant. Since the Dept. of Ed. will come after the institution, will the institution attempt to turn around and go after the compliance management company? The compliance management companies are surely aware of this possibility, and they are likely writing their contracts with the institutions to protect themselves (note: I tried to find more information on the websites that I visited, but they were all mysteriously vague…). In short, it is unlikely that they are actually taking on the full responsibility, as their websites and marketing would have you believe.
In any case, here we have profits to be made off the for-profits. This is just one example of further commercialization of higher education—perhaps amplified because it is (mostly) focused on the already for-profit sector. What’s next?
Braelin, I had to chuckle in reading your very informative article here, because it reminded me of how incestuous the go-go mortgage industry was during my immersion in it from 1997-2006. As both a direct loan salesperson and eventual area account manager for some of the biggest companies in the nation, I witnessed daily the intense pressure that mortgage officials directly and indirectly placed upon property appraisers and inspectors to approve their loans. Stories of improper and even illegal collusion between sales departments and their regulators to get deals done were common.
ReplyDeleteYour article also reminds me of how one of the most prestigious business analysis companies in the world during the 80s, 90s and early 2000s -Arthur Anderson- essentially imploded after being caught red-handed in helping the infamous Enron Corp. to cook their books in order to keep their very lucrative business account.
Your article also makes me think of how even many of our public and not-for-profit universities and colleges are increasingly run by well-connected business people and politicians who know how to play the fund-raising game with aplomb, and of course how we are increasingly commodifying pieces of our intellectual communities and their output in order to increase profitability.
Seen in this general light, the use of outside compliance experts by for-profits makes perfect sense, in the same way that corporations have legal counsel paid to help them avoid taxes as much as possible.
As long as we as a society deem such co-operative activities between outside consultants and higher education as legal, the best we can do is provide enough competent oversight in order to ensure such cooperation is in fact not counterproductive to the overall objectives and missions of our higher ed. institutions (which in fact, may be easier to prove than not, if we were to seriously critique the matter from a variety of perspectives, I think).
For me it is hard to say what is next but, I did find myself thinking of CAS standards (Council for the Advancement of Standards in Higher Education) when I was reading this. I found myself thinking are we using CAS standards as a form of protecting ourselves in public education.
ReplyDeleteCould we turn and say we followed the standard similarly to how a for profit could turn to their compliance company and say we were in compliance?
I am not sure how I fall on the compliance companies. They are making profits off of for profit institutions but how different is this from our CAS standards making money off public institutions with new versions and encouraging institutions to follow the standards. I do not generally think I am for the making profits based on the somewhat fear mantra of "are you protected?" but I do appreciate some oversight.
It would be interesting to me to see who some of the parent companies are of these compliance management companies are. It wouldn't surprise me in the least if some of them are owned by the same companies running some of the for-profit institutions.
ReplyDeleteI too worked for a proprietary institution, but it's been almost 10 years ago now, and it was so surprising to me how very differently they viewed higher education and students...it was all a business and they were always looking for ways to maximize their profits.
If some of the compliance management companies aren't owned by organizations that own and operate some of the for-profit institutions, I would be surprised there is some other existing connection to the world of education (a subsidiary of Blackboard...or who knows...maybe Sungard owns one of them).