The Chronicle of Higher Education: For-Profit Colleges’ Winter Meeting Focuses on Employment

December 9, 2013 

by Scott Carlson

In the winter months of years past, the Association of Private Sector Colleges and Universities has held swanky meetings at resort destinations like Lake Tahoe or Beaver Creek, Colo., and its annual symposium in Washington was more inwardly focused. As policy makers and the public began to scrutinize the debt, default rates, and poor employment prospects of students coming out of some prominent colleges in the for-profit sector, however, the setting and the tone of the meetings didn’t play well in some news outlets.

The meetings have been “sort of half investor conference and half cheerleading,” with the cheers led by politicians aligned with the for-profit education industry, said Trace A. Urdan, a managing director at Wells Fargo Securities who follows the education sector. This year, he added, “it sounds like maybe they wanted to get into a little more substance.”

For this winter’s symposium, starting on Monday in Washington, the association holds its inaugural “State of the Workforce Symposium,” focused on employment trends, the “skills gap,” and how colleges (and not just for-profit ones) can prepare the work force. Speakers include economists from George Washington University and the RAND Corporation, a former president of the Service Employees International Union, advocates for veterans, chief executive officers from employers like Siemens, and representatives of nonprofit education associations. The theme is likely to return for years to come.

“This is really the next chapter in the evolution in what APSCU should be doing as a voice and vision for the sector that we serve and represent,” said Steve Gunderson, a former Republican congressman who became the association’s president and chief executive last year. “The absolute message is that postsecondary education should lead to employment in [students'] field of study, with a skill that is productive for both the employee and the employer. What all of us in higher education need to do is see us as part of the employment chain.”

Observers say it is a sensible shift in focus, and savvy on a number of levels. Stock prices among the big-name colleges have flagged in recent years, and the sector appears to be facing renewed pressure with revisions to the Education Department’s “gainful employment” rule, which may be imposed in more stringent form. (The concluding session at the symposium will be a briefing about the rule, closed to outsiders, Tuesday afternoon.) Vocational training is one area where the public looks at for-profit colleges more favorably, and it’s a business that nonprofits want to horn in on.

So if the industry is going to address concerns publicly, those observers say, a good place to do it is in Washington—with an audience. The symposium features a special three-for-one registration deal, but the association tells registrants that, “instead of members from your organization, we ask you to bring employer partners, work-force professionals in your industry, state or local policy makers.”

Mr. Gunderson said the association had never tried that tactic before. Partnerships with industry—tailoring programs to specific needs outlined by employers—needs to be the trend for the future. “We cannot and should not just say, ‘OK, you pursue whatever kind of course you want, and good luck in the job world,’” he said. “That day is sort of gone for everyone in higher ed.”

But in Washington, said Mr. Urdan, the symposium may also be a way to “collect stories and fans” that speak to the industry’s ability to train a certain segment of the work force in selected skills. To have local employers and local officials standing with the for-profit colleges just blocks from the U.S. Capitol—that could send a message to Washington policy makers. “Politics is all about the anecdote,” he said. Among politicians who are sympathetic with for-profit colleges, “what the politicians always complain about is that they are not sufficiently armed by the industry with positive examples.”

The industry is trying to tie itself to vocation, rather than compare itself to traditional institutions. “They are not trying to hide under Harvard’s skirts anymore,” Mr. Urdan said. “They are saying that we are all about employment, and we do a good job of it, and we are investing resources in doing a better job of it.”

Kevin Kinser, an associate professor of education at the State University of New York at Albany who studies the for-profit industry and blogs regularly for The Chronicle, said the focus on work-force education may be a way of “localizing” the debate about graduation rates and value of the industry.

“What has happened to the for-profits is that the question of value has been nationalized, so people look at these large data sets and see how poorly the for-profits in the aggregate, across states, are performing,” he said. But at the local level, there are a number of institutions that do a good job—”and in fact are almost models of success and access for low-income populations,” he said.

The symposium’s emphasis on ties between employer and college “might be a way to recapture that local connection that many for-profits had in the past, trying to re-establish the local benefits to the local economy that for-profits can provide,” he said.

Jobs, in fact, are intimately tied to the fate of the for-profit sector. Mr. Urdan pointed out that last week’s unemployment report, which showed the unemployment rate dropping to a five-year low, echoed a more positive message he has heard from for-profit colleges. While enrollment at some online colleges, like the University of Phoenix, is “still in freefall,” among more vocationally oriented colleges “the declines have leveled off.”

For example, Universal Technical Institute, a for-profit institution specializing in automotive and mechanic training, reported that its graduates were having more success in the job market. “They are seeing all the manufacturers that were running away from them during the recessions coming back,” Mr. Urdan said.

The problem is that this hasn’t quite shown up in enrollments yet, he said. The “show rate” is down—students are signing up but bailing out before classes start.

“They get cold feet around the money,” Mr. Urdan said. “Students remain apprehensive about whether going to school is a good investment and whether there is going to be a job at the other end of the program.” As an investment, he said, the for-profit industry won’t turn around until that trend turns.