THE ENROLLMENT MANAGEMENT REVIEW
Volume 23, Issue 2
Winter, 2008
Editor: Don Hossler
Associate Editors: Larry Hoezee and Dan Rogalski
Indiana University Center for Postsecondary Research and Planning
Successful long-term enrollment management efforts require looking into the future to
anticipate how demographic shifts, changes in public policy, and new competitive threats
may affect the ability of enrollment management units to achieve their goals.
Anticipating these potential shifts and communicating with other senior campus policy
makers about the possible impacts of these changes on campus goals is one of the most
important roles of a senior enrollment officer.
This issue of the Enrollment Management Review examines the potential impact of
competition from for-profit proprietary postsecondary institutions. In recent years, the
number of associate and baccalaureate degrees and certificates awarded by proprietary
institutions has experienced noteworthy increases. The number of bachelor’s degrees
earned at proprietary institutions nearly doubled between 1970 and 2002. In some states,
the total number of degrees at all levels awarded by for-profit institutions increased by
more than 20% between 1995 and 2000 (Turner, 2006). The effects of institutions like
the University of Phoenix and DeVry Institute of Technology extend beyond their simple
enrollment growths. Nonprofit institutions often use a practice called creaming to lower
the cost of instruction in these programs to provide cross-subsidies for more expensive
undergraduate programs in the sciences and health-care fields as well as for
undersubscribed programs deemed to be important, such as the classics, music, and
philosophy. For-profit institutions typically offer degrees in fields that have lower
instructional costs, such as education, public administration, business, and engineeringrelated technologies. In doing so, proprietary schools put pressure on the ability of
nonprofit colleges and universities to continue to offer some of their more expensive or
degree programs.
In the near future it is unlikely that enrollment growth at two- and four-year proprietary
institutions will put pressure on residential institutions with solid applicant pools.
However, their success in increasing market share may have an impact on nonprofit, less
selective, commuter four-year institutions and possibly on some two-year colleges as
well. Competition from proprietary institutions not only affects the ability of institutions
to achieve their overall enrollment goals; it also can affect the organizational and funding
structures of two- and four-year institutions. Public and private nonprofit two- and fouryear institutions with comprehensive missions always have curricula where some degree
programs cost more to offer than tuition and state funding provide in income. They rely
on revenue in general education programs or heavily enrolled programs in areas like
education, business, and public administration for sufficient revenue for campus
administrators to provide internal subsidies. If proprietary institutions are able to increase
their enrollments in these program areas at the expense of nonprofit institutions in the
same region, nonprofit institutions will have no choice but to re-think their internal
subsidization strategies.
One competitive advantage of many proprietary institutions is the manner in which they
organize their degree programs. Rather than a traditional general education program that
offers many courses to fulfill degree requirements (offered at many different times of the
day), proprietary institutions often offer cohort-based programs which move students
through the curriculum in a more structured fashion. Thus students can plan their
personal lives and work schedules so as to move through a program of studies in a
planned and predictable manner. While many academics might criticize this approach for
limiting the breadth of a student’s education, it is likely more effective for many firstgeneration college students who are focused on their career goals and less familiar with
the intellectual terrain of traditional institutions. This kind of structure may provide what
many working students need to increase their odds of succeeding and earning a degree.
It behooves enrollment managers to have an understanding of enrollment and curricular
changes in the proprietary sector of postsecondary education. From a strategic
perspective, understanding the business models employed by this sector can assist
enrollment managers at public and private nonprofit colleges and universities to more
effectively craft strategies that enable them to achieve their enrollment goals. In this
issue of the Enrollment Management Review we look at the structure, strategies, and
student enrollment patterns at proprietary institutions.
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Breneman, D.; Pusser, B.; & Turner, S. E. (Eds.). (2006). Earnings from Learning:
The Rise of For-Profit Universities. Albany, NY: State University of New
York Press.
In their comprehensive look at for-profit proprietary institutions, Breneman, Pusser, and
Turner consider the mission of proprietary institutions, how the rise of for-profit
institutions fit within the American tradition of postsecondary education as a public good,
and how enrollments have evolved in this sector. This volume contains an interesting
examination of the internal organizational structure of the University of Phoenix and how
this affects that institution’s delivery of education. The authors also examine how the
lobbying efforts of for-profits have increased their political clout.
The first four chapters of Earnings from Learning are the most interesting for practicing
enrollment managers. One of the most important elements in the first chapter, which
describes various forms of for-profit education, is the authors’ efforts to disaggregate this
sector. Pointing out that analysts and reporters often overestimate the size of the
competition for two- and four-year degree offerings due to aggregating all forms of forprofit education including training and development, the authors note that proprietary
institutions account for only 2% of all bachelor’s degrees awarded and 3% of all master’s
degrees. However, the overall number of degrees awarded has increased by 30%
between 1982 and 2002. Thus, it is the potential for additional growth that makes this a
competitive sector that merits tracking in future years.
Next, Brian Pusser provides a thoughtful essay on the shifting views of policy makers on
the role of government in providing postsecondary education, observing that there has
been little speculation about what kind of education can be provided with limited
government subsidies. He asks the provocative question, “how higher education’s
contribution to the public good can be ensured if nonprofit public production gives way
to a for-profit market?” This if followed by Sarah Turner’s overview of enrollment
increases in the proprietary sector.
In the fourth chapter Breneman describes the organization of the University of Phoenix,
noting that, while the institution does not require SAT or ACT scores and does not look at
previous high school performance, once students enroll it does invest heavily in
assessment, including cognitive, critical thinking, and communication tests that use preand post-test models. Despite this focus on assessment, however, Breneman wonders
whether fewer class hours, a reliance on part-time faculty who are not paid well, often
limited access to libraries, and common course syllabi in all courses around the country to
achieve efficiencies may limit the quality of the education offered.
Chapters 5 and 6 of this volume may also be of interest to enrollment managers with
responsibilities for summer school and distance education programs. In total, Breneman,
Pusser, and Turner have authored a timely, substantive, and interesting look at for-profit
degree-granting postsecondary institutions.
Pusser, B. (Ed.). (2005). Arenas of Entrepreneurship: Where Nonprofit and Forprofit Institutions Compete. New Directions for Higher Education, No. 129.
San Francisco: Jossey-Bass.
This edited volume expands the analysis of for-profit higher education to include a
review of the entrepreneurial activities nonprofit institutions have employed in response
to the growing competitive threat of for-profits, as well as changing student
demographics and expectations. Many of the chapter authors utilized their work on the
Lumina-funded Emerging Pathways to Access and Success project as the basis for their
contributions. The result is an eclectic collection of materials that includes a foundational
chapter on the factors leading to the increase of entrepreneurial activities in higher
education; a discussion of the rise of the business culture in the administration of
community colleges; descriptive studies on continuing education programs, summer
session offerings, and noncredit course offerings; a solid analysis of accreditation
activities in for-profit institutions; and a final chapter positing that as institutions become
more market oriented they are moving away from their public missions.
A few nuggets in this volume address specific enrollment management strategies and
tactics and, in keeping with the theme of this issue, help to extend enrollment managers’
understanding of how for-profit institutions work and the nature of the competition they
present. Efforts to analyze the entrepreneurial activities of for-profit and nonprofit
institutions empirically are appreciated and much needed. The results are still
preliminary, however, and readers are cautioned not to accept all of them as well
established facts. Three of the seven chapters merit more detailed discussion here.
David Breneman opens this work by providing a valuable review of the environmental
factors that have led to the increase in institutional entrepreneurial activities. From
decreasing public financial support to changing student demographics and the
proliferation of new technologies, Breneman discusses the impact of these forces on
public, private, and for-profit institutions as well as on university schools of continuing
education. Breneman sets the foundation for the remainder of the volume, which shows
essentially that public and private institutions have been quite innovative and successful
in responding to these market forces.
At the end of the chapter, Breneman turns his attention to for-profit institutions and the
conclusions reached in his book reviewed above, Earnings from Learning: The Rise of
For-Profit Universities (with Brian Pusser and Sarah Turner). Those conclusions were:
(1) the for-profits are solidly entrenched in the education sector, and approval of such
education will only increase in the future; (2) for-profits do not currently pose a
significant threat for most traditional colleges and universities, as they extend the market
to students who would normally not enroll at all; (3) nonprofits can learn from the forprofits in how they serve students and tightly focus their academic programs; and (4)
distance learning and accreditation are not distinguishing features that can be exclusively
associated with for-profit or nonprofit institutions respectively.
Kevin Kinser’s chapter, “A Profile of Regionally Accredited For-Profit Institutions of
Higher Education,” is the strongest contribution to this monograph and one that
enrollment managers will find particularly beneficial. Kinser undertakes the challenge of
trying to determine the number of regionally accredited, for-profit institutions and the
characteristics of these institutions. It was interesting to learn what a difficult task that
turned out to be, given the lack of consistent national data, as well as the incorrect
information maintained by the accreditation associations themselves. In his final tally,
Kinser determined the number of regionally-accredited for-profit institutions totaled 65
(382 separate campuses), about 2% of all institutions accredited by the eight regional
commissions. More interesting was the fact that the North Central Association accredits
68% of all for-profit campuses. Given that North Central accredits a wider variety of
nontraditional institutions and academic models, Kinser posits that accreditationshopping does take place as for-profit institutions continue to seek regional accreditation
as a business objective. According to Kinser, the value of accreditation takes three forms
for for-profit institutions: (1) regional accreditation aids in credit transfer for students; (2)
accreditation serves as a mark of distinction differentiating institutions from one another;
and (3) it provides a useful association with more traditional, well-known nonprofit
institutions. While accreditation shopping does take place and the number of regionally
accredited for-profit institutions has increased, Kinser effectively makes the case that the
number of for-profit institutions seeking regional accreditation is not likely to grow
dramatically in the future.
Ruch, R. S. (2001). Higher Ed, Inc. The rise of the For-Profit University. Baltimore,
MD: Johns Hopkins University Press.
Richard Ruch is uniquely situated to provide insights on the similarities and differences
between for-profit and nonprofit institutions of higher education. Over the course of his
career, Ruch served as a tenured faculty member and academic dean at traditional
universities before becoming the chief academic officer at a DeVry Institute of
Technology campus. While the insights Ruch shares in this book will prove valuable for
those new to enrollment management or new to the competitive threat posed by the large,
corporate, for-profit institutions, the text is disappointingly light in detailing the
admission and retention strategies, academic support services, and other policies and
practices the for-profits employ to serve students. The book does, however, provide
insights into the ways this sector successfully competes with the nonprofit sector for
students. It is also worth noting that the literature on for-profit institutions has grown
considerably since Ruch’s text was published in 2001, so some of the evidence used to
support and explain the advantages of for-profit institutions will seem antiquated to
enrollment managers that have spent time doing any homework on this growing
competitive force.
Ruch focuses his discussion and analysis on several education corporations that have
taken a more prominent role in the for-profit higher education sector. The highlighted
companies include the Apollo Group (University of Phoenix), Argosy Education Group
(American Schools of Professional Psychology), DeVry, Inc. (DeVry Institutes of
Technology), Education Management Corporation (Art Institutes International), and
Strayer Education, Inc. (Strayer University). Ruch dedicates an entire chapter to
providing a brief sketch of each company, its academic programs, and its
student/enrollment profiles. Much of Ruch’s analysis is grounded in dispelling the notion
that “for-profit” and “nonprofit” are accurate labels to differentiate between proprietary
and independent institutions, preferring to use the terms “tax-paying” and “tax-exempt.”
The following table outlines these and further distinctions Ruch makes between
independent and proprietary institutions:
Nonprofit
Tax-exempt
Donors
Endowment
Stakeholders
Shared governance
Prestige motive
For-profit
Tax-paying
Investors
Private investment capital
Stockholders
Traditional management
Profit motive
Cultivation of knowledge
Discipline-driven
Quality of inputs
Faculty power
Application of learning
Market-driven
Quality of outcomes
Customer power
Ruch posits that for-profit institutions succeed because their business management model
allows them to be more nimble and flexible in adjusting to the demands of the
marketplace. Citing the 2000 HERI Freshman Survey, Ruch points out that today’s
freshmen list “to be able to get a better job” and “to get training for a specific career” as
the top reasons they go to college and “being very well off financially” as the top goal
they hope to achieve by going to college. By focusing on high-demand academic
programs and investing significant resources in career placement and employment
services, for-profit institutions capitalize on student motivations for pursuing
postsecondary education and structure the entire operation in meeting this demand. Ruch
challenges the notion that for-profit institutions succeed at the expense of students and the
quality of the academic program, noting that many corporate institutions have pursued
and have successfully attained regional accreditation for their academic programs.
Despite these claims, it is clear that for-profits attain their economies of scale at the
expense of traditional faculty roles and structures. Most for-profit faculty members are
not eligible for tenure, receive no sabbatical or release time for disciplinary research, and
play a limited role in the development of curricula and the assignment of class times. In
for-profit institutions the faculty are there to teach and little more. In fact, the more
practical they are with their teaching, the better. By employing a business management
model that limits the power of the faculty, for-profit institutions are able to add and drop
academic programs quickly, target academic financial investments solely on the
classroom experience, and fully utilize the physical plant by offering a greater number
and greater array of class options. These advantages will come as no surprise to
enrollment managers at comprehensive institutions that have a for-profit provider in their
market.
Ruch notes that for-profit institutions tend to draw a high number of students from
traditionally disadvantaged populations (i.e., women, minority, working adults, and lowincome). While he acknowledges that degree completion rates are lower at for-profit
institutions, he dismisses these differences as insignificant. Such an analysis would be
strengthened if information regarding graduation performance relative to the
demographic characteristics of the student populations served was included. In addition,
there seems to be a heavy emphasis on student retention and grade distribution data in
driving accountability measures in the for-profit environment. For example, when
discussing the dean’s role in faculty supervision, Ruch states, “Grade distributions and
student retention data are also reviewed each semester. Wide deviations from the norm
for similar courses are discussed with the faculty member and changes are expected as a
result (p.128).” No elaboration is given regarding the expected “changes,” feeding the
perception that academic rigor is compromised for the sake of keeping students happy
and enrolled. Future editions of the text would be enhanced if Ruch provided greater
depth of understanding regarding the various roles data plays in institutional decision
making.
Briefly Noted:
Green, M.; Eckel, P, D.; Calderon, L.; & Luu, D. T. (2007). Venturing Abroad:
Delivering US Degrees Through Overseas Branch Campuses and Programs.
Washington, DC: American Council on Education.
Enrollment managers are often asked to be part of deliberations regarding the possibility
of adding branch campuses for two- and four-year colleges and universities. In most
instances the locations for these proposed campuses are in nearby communities.
Increasingly, however, universities in the U.S. are adding campuses or offering programs
in other countries. This new ACE monograph provides a very useful overview of issues
for colleges or universities considering opening a branch campus in another country and
includes sections on opportunities for cross-border education; descriptions of the types of
providers, curricula, students, and faculty involved; global hot-spots; and key issues that
institutional leaders should consider. It also contains a list of institutions and countries
where cross-border U.S. institutions are currently located.
Tucciarone, K. (2007). Vying for Attention: How Does Advertising Affect Search
and College Choice. College and University, 83(1), 26-35.
A variety of forms of advertising are now standard in admissions marketing, but we know
little about their efficacy. Tucciarone’s qualitative study sheds some light on this
question and reinforces the conclusions of some other studies of the factors that influence
the college decision-making process. The author interviewed 69 undergraduates enrolled
in advertising classes enrolled at a public university. Because of the small sample caution
should be exercised in attributing too much certainty to its findings.
The types of marketing the author categorizes as advertising include radio, TV, direct
mail, the Web, billboards, and high school visits. Tucciarone found that none of the
students identified advertising as a direct influence on either the search or choice stages of
the college decision-making process. Indeed, until they were prompted by the researcher,
none of these forms of advertising were mentioned as factors in their decisions. The
students had to be reminded of the marketing material before they remembered their
exposure to it. The author found that parents, siblings, friends, cost, and location were
considerably more influential in both the search and choice stages. Although she does not
provide much evidence to support her assertions, the author concludes that advertising,
when targeted to specific audiences, and integrated with a holistic admissions recruitment
effort can influence the enrollment decisions of students.