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Examining the For-Profit Sector Differently

Career Tools  |  by Kelly A. Cherwin
Tuesday, September 4, 2012
According to the Institute for Higher Education Policy 1 (IHEP), a nonprofit organization that promotes college access and success in higher education for all students, the for-profit sector needs to be examined differently than its non-profit counterpart.

As noted in its report, A New Classification Scheme for For-Profit Institutions, 2 non-profit organizations differ in many ways from the traditional for-profit universities. These institutions are more likely to be non-degree granting, be more concentrated in a metropolitan area and their students generally are older, female and first generation college students.

In a recent press release, the IHEP stated, "To truly understand the sector and differentiate it among other institutions, a classification scheme that focuses on for-profits must include criteria that are different than those used in existing schemes that moves beyond institutional characteristics to look at contextual factors." 3

The classification framework project, which was funded by the support of USA Funds, examined the growth of for-profit universities, the ideal position of these organizations in the higher education market, and the demographics of the students enrolled at for-profits.

According to Wendell D. Hall, Ph.D., the deputy director of the IHEP, "The Institute for Higher Education Policy's new report, A New Classification Scheme for For-Profit Institutions, examines how for-profit institutions serve a niche and a need. This report challenges us to think beyond the basic comparison of for-profit institutions vs. non-profit institutions, and provides a more nuanced perspective when comparing for-profit institutions. We also explored where for-profit institutions are most concentrated to examine whether they're filling a need in a particular market. Examining the for-profit sector in this way accurately captures who these institutions serve, where they serve them, and how well they serve them."

Now that classifications are created, benefits include the ability to create peer groups of institutions and students in order to offer comparative analyses. The classification allows the potential to examine issues of educational quality, competition, and appropriate policymaking. And now, through the framework, the for-profit sector can be viewed in a different light - as a highly differentiated set of institutions rather than a large homogeneous sector.