As chief executive of Kaplan, Inc., a for-profit educational services company, Rosen offers a prescription that will rankle some traditionalists in academia. But I find his insights truly important for the debate on what needs to be done to improve the success of post-secondary education in America. (Full disclosure: Kaplan is a subsidiary of The Washington Post Company, where my wife, Melinda, served on the board from 2004 to 2010.)
The United States used to lead the world in the percentage of adults with college degrees, but has now fallen to 10th place. That’s partly because we have such a high dropout rate. While more than two-thirds of students who graduate from U.S. high schools attend college or pursue postsecondary training, barely one-third of those will end up getting a degree. Something is clearly broken.
This is especially worrisome because more than half of jobs today require a college education, and that trend will continue. By 2018, the demand for workers with college degrees will exceed the supply of college graduates by an estimated 3 million. Meanwhile, dropouts and workers with only a high school diploma will have an ever harder time finding fulfilling work.
Rosen believes for-profit institutions, such as his own, are part of the solution because they meet the needs of a wide range of students. They do this, Rosen notes, by offering flexible course schedules in the evening and online, and by focusing their curriculum on the classes that students need to graduate and the knowledge and skills that employers value.
Over three decades, for-profit schools added students at more than six times the rate of traditional colleges and universities. However, that growth also sparked controversy over their marketing techniques to attract students and led recently to tougher regulations. The new rules require for-profit education companies to offer programs that prepare students for “gainful employment” so they can pay down their school loans and reduce their ratio of debt to income. Those changes have slowed new enrollments significantly, so it is unclear whether for-profit schools will continue to outpace more traditional institutions of higher education in the future.
Rosen starts his fairly brief and highly readable book with a quick history of post-secondary education in colonial times, when only the sons of wealthy Free Protestant families attended college. Then he describes the country’s embrace of universal secondary education and the benefits of the GI Bill after World War II, which allowed millions of returning veterans to attend college tuition-free.
To accommodate the country’s growing and increasingly educated population, a fledging collection of two-year colleges rapidly evolved in the second half of the 20th century into the current system of more than 1,000 community colleges. Rosen rounds off the historical survey with a look at the growth of for-profit colleges, including schools like the University of Phoenix, and several run by his own company, Kaplan.
Rosen notes that it is much easier for some students to get through college. He calls these students the “automatics” — they include the most talented and reasonably talented students who went to strong suburban or private schools. But they are not the norm.
To better meet the needs of all students, Rosen suggests creating a common yardstick based on seven risk factors identified by the U.S. Department of Education that make students less likely to graduate. Among these are delayed enrollment, no high school diploma, single-parent status and full-time employment while enrolled. Rosen maintains that these risk factors could be used to reasonably compare schools with similar populations and identify those that are doing the best job of helping students graduate and secure good jobs. This approach doesn’t capture all the key elements, in my view, because it leaves out one important factor — whether or not a student has a clear career goal in mind. But more transparency is a good thing.
Many of the four-year public and non-profit institutions are following what Rosen calls the Ivory Tower Playbook. They add expensive non-academic incentives — such as money-losing sports programs and better living facilities — to attract better students, rather than using that money to increase capacity and improve a student’s education.
He is quite pointed about how the competition to have the best resort-like atmosphere has diverted funds away from the classroom in many schools. And he says these colleges know more about how many kids attend basketball games and which alumni give money than how many students showed up for economics class during the week and which alumni are having a hard time meeting their career goals because of shortcomings in their education.
For Rosen, community colleges follow an All Access Playbook, which is commendable in principle because it allows almost anyone to attend college. But without stronger state support (which is unlikely due to the struggling economy), this broad-access approach is not sustainable and has distracted these colleges from focusing on the quality of learning and reducing dropout rates.
Rosen believes the for-profit postsecondary sector is demonstrating a number of promising approaches in measuring results and improving efficiency in teaching large numbers of students. But he acknowledges that some for-profit schools following what he terms the Private Sector Playbook can fall victim to a short-term focus and, in some cases, fail to exercise adequate oversight.
Rosen has compared criticism of for-profit institutions — which he calls “disruptive innovators” — to the resistance encountered over a century ago by land grant universities, including Cornell and Purdue. Some critics will say that, because Rosen runs one of the for-profit companies, he isn’t as tough on the for-profit sector as he should be. However, I think he does an effective job of explaining what the critics have said about the shortcomings of the sector and how these issues can be handled without overly constraining these institutions.
Yet, there is more than a little irony in the fact that students from better-off families tend to go to private non-profit schools subsidized by endowments or to public institutions subsidized by taxpayers, while many low-income students end up attending for-profit schools with the least subsidy, which means they must assume proportionately higher burdens of student loan debt. Without question, for-profit schools must do better at graduating students with a degree that is valuable in the marketplace.
For all institutions — public, non-profit and for-profit — better measurement is essential to increasing graduation rates and success in the workplace. I am in radical agreement with Rosen that data can and should be used to motivate schools to improve, and that greater transparency and accountability will encourage students and government funders to support the institutions that demonstrate the best outcomes. We should hold all institutions of higher learning accountable for results, and find easier ways to identify and support the best among them.
is the co-founder and chairman of Microsoft and the co-chair of the Bill & Melinda Gates Foundation. His other book reviews and essays may be found at TheGatesNotes.com.