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The University Of Adam Smith


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In the scramble for money and prestige, colleges lose their focus on education. A business executive thinks he has a solution.

Naomi Schaefer Riley



About halfway through "Change.edu," Andrew Rosen relates a story from a consultant who was hired by a small private college to help it implement the once-trendy concept of Total Quality Management. The consultant began by asking the school's administrators and staff a question: "Who is your customer?" The provost said that "basically everyone is our customer." Two of the school's deans named "the faculty" as their main customer. The college president picked "the trustees." The faculty itself found the word "customer" offensive. The consultant was eventually fired.




Mr. Rosen's answer to all this is for-profit education. He believes that for-profits are the rightful inheritors of America's abiding mission to expand access to higher education. But unlike public and private not-for-profit schools, for-profits can be single-minded: The student is the customer. Tuition makes up almost all the revenue of a for-profit school. At private not-for-profits, tuition accounts for only 29% of revenues and at public colleges as little as 13%.


The accusations of misconduct that have been leveled at some for-profit schools in recent years, Mr. Rosen concedes, are not unfounded—pushing unaffordable loans on students, recruiting students who are not able to do the work, etc. He merely says that, in the for-profit world, companies that cheat their customers or that aim at only short-term profits will not survive. Meanwhile public and private not-for-profits can remain in business regardless of how badly they behave.




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