The upstart college founded in the 1970s by John Sperling aimed to provide higher education aimed specifically at working adults. In the late early 2000s, the University of Phoenix expanded its offerings to more directly compete with traditional higher education institutions, offering masters and PhD degrees, for example, all the while continuing to cater to working adults.
Phoenix became the darling of investors, and soon grew in size and scope. At its height, it numbered perhaps 600,000 students, one of the largest universities in the world. U of Phoenix and other for-profit education companies ran afoul of the Obama administration and a Democratically-controlled Congress, which developed a series of regulations to curb the worst excesses of the sector. For-profit sector students defaulted on student loans at rates significantly higher than traditional higher education institutions, and many of these students did not graduate, saddled with student debt nevertheless.
Most notable among these regulations was the gainful employment rule, which requires that, as a condition for accepting federally-funded student loans, these colleges have to demonstrate that 90% of their graduates were employed in those careers for which they trained. Enrollment at The University of Phoenix has plummeted although it still remains in business, something that cannot be said of many other once-thriving for-profit education companies.
There is every reason to assume that The University of Phoenix and other for-profits will see their enrollments rise again. The sector is not going away, although the new competitors that will emerge will not look anything like Phoenix. The Georgetown Center on Education and the Workforce reports that traditional colleges and universities represent $407 billion of the $1.1 trillion spent on postsecondary education and training, or only 37 percent of the total.
The expectation is that percentage will shrink over the next ten years, or stated another way, the share of the postsecondary education and training market provided by non-traditional competitors will grow. With the assumption that Republicans will hold the White House and both houses of Congress over the next eight years, regulations and policies that weakened the for-profit sector will be relaxed, and we can expect to see intuitions such as the University of Phoenix once again see increases in their enrollments.
But there is a new kind of for-profit institution to watch. So-called “pre-hire training companies” such as Galvanize.com and Revature.com will proliferate. These are companies that train people in marketable skills such as coding and big data analytics. Training typically takes between 12-26 weeks, after which graduates are awarded a certificate. What sets these companies apart is not only the speed and concentration of their curriculums (there are no general education requirements) but that these companies are aligned with employers who will hire graduates upon completion. Such training companies will draw students who might otherwise attend lower-tier colleges and universities or community colleges.
We are also seeing a renewed interest in skilled trades, interest which declined over the past generation. Over the next ten years, there will be increased interest in pursuing training in these areas, either as an alternative to traditional higher education or with colleges and universities developing new programs to attract these students. The “maker movement” signals a renewed interest in things and objects, in making and manufacture, and this may influence some traditional higher education institutions to turn toward advanced manufacturing as an undergraduate concentration.
The Massachusetts Department of Higher Education is already looking ahead to the workforce development needs for advanced manufacturing: “accelerating advances in materials, technologies and supply chain processes will require a workforce with substantially new and different knowledge, skills and abilities to build the products of the future. The public higher education system must consider and address these trends well in advance of employer demand as there is a lead-time to develop academic programs and in the 21st century economy; market opportunities will not wait.”
It is possible that such programs will be developed by traditional higher education institutions, but I anticipate that non-traditional providers such as for-profits and pre-hire training companies will seize upon the market opportunities and lead in educating for advanced manufacturing and the skilled trades.
David Staley is president of Columbus Futurists and a professor of history, design and educational studies at The Ohio State University. He is the host of CreativeMornings Columbus.