For-Profits Serve Poor, Get Better Results Than Government Schools

[Winston Smith]

'Non-profit' Colleges Can Be Quite Profitable
Saturday, 27 Aug 2011 09:56 PM

So-called "non-profit" colleges actually rake in profits by spending less on students than they reap in revenue, according to a new report.

"If we define profit as 'charging consumers more for a service than it costs to provide that service,' then both government and officially non-profit institutions" are profitable, the report from the John Williams Pope Center for Higher Education Policy discloses.

The report cites a book by Oklahoma State professor Vance Fried, "Better/Cheaper College." He calculates that a quality liberal arts education at a residential college needs to cost only around $8,000 per year, but most colleges charge far more.

"Based on tuition revenues alone, the average private undergraduate school makes about $5,500 per student per year," Fried writes in a recent paper.

"When donations and endowment income are added, profits jump to $12,800 per student," which is twice the profit margin earned by for-profit University of Phoenix, he points out.

Schools like Harvard, a private university, and the University of North Carolina, a public institution, "do not show profits on their books, but instead take their profits in the form of spending on some combination of research, graduate education, low-demand majors, low faculty teaching loads, excess compensation, and featherbedding," Fried writes.

Public universities are also profitable because they receive large amounts of support from the state. Fried calculates that profit at these schools is around $11,000 per student. The "profits are spent on items like low teaching loads and excessive compensation," he adds.

Fried regards faculty research as an unnecessary expense. And he suggests that professors should have a teaching load of 12 hours per semester even if they are engaged in research.

He also argues that a reduction in government support for higher education would lead to higher college productivity — and lower government spending.

So, for example, some fat, bald, underachieving prof stuck at a backwater government university, one with a low teaching load (such as one course per semester), and excessive compensation (such as >$100,000 per year) would be the epitome of the huge hypocritical ripoff that is the "non-profit" higher ed cartel.

Can anyone think of someone who fits that profile? Someone who spends his spare time stalking small Christian schools and start ups so he can try to drive them out of business? Because he wants integrity and quality in higher ed? NO! Because he wants to eliminate competition and keep ripping off students and taxpayers by collecting his fat perks while providing little or no productivity!!