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Private education lacking in accountability, CGHE report charges

A new report looking at private for-profit universities in six countries has concluded that while these providers might serve to massify education, transparency on value for money and student protection plans are inadequate.

The report says students have a lack of information about private provision beyond marketing material. The University of Phoenix spent more than $665m on marketing in 2012, representing 15% of its revenues. Photo: Ryan McKnight

In Poland, Japan and Chile, private universities have been integral in the massification of higher education nationally and “demand absorption”

The study carried out by researchers at the UK’s Centre for Global Higher Education looked at private for-profit provision in the US, Germany, Australia, Poland, Japan and Chile.

The report argues that the quality of education at private providers tends to be lower than at their public counterparts and the institutions’ reliance on tuition fees makes them more vulnerable to shifts in demand that could have “serious education and financial consequences” for students at failing institutions “who are often left in limbo”.

Despite carrying a heftier price tag than public institutions, student tuition protection schemes were found to be significantly lacking among private providers across the six countries. “There aren’t enough safeguards in place necessarily for students when an institution has to close, for whatever reason,” said Claire Callender, one of the report’s authors.

“What’s important here is protecting students and their interests, whoever they are.”

“What’s important here is protecting students and their interests, whoever they are”

Data on graduation rates, employability and student retention is also not released by many private providers compared to the rigorous reporting government-funded institutions are required to do.

“That sort of information is terribly important, especially for students who want to study at private institutions. How do they judge whether or not the provision is good quality unless they have reliable information about what happens to students attending private institutions?” said Callender.

The study was carried out in part to inform the development of the UK’s higher education sector in light of the Higher Education Bill and the recently released White Paper that will open the door to private providers gaining degree awarding powers in a bid to increase competition and drive up quality in the sector.

However, the study found that in none of the countries it examined, did competition from private providers improve overall higher education provision in the country.

“There is very limited evidence to suggest that the presence of the private sector…has improved the quality of provision or driven down prices in either the public or private sectors,” it states. “Indeed, relative to the public sector, the quality of provision in the private sector is often found wanting, while tuition fees usually are higher.”

Entry requirements also tend to be lower at private institutions which Callender said raises the question of student support services at private providers.

“There’s a question about the extent to which private providers can give the support that is required for people with lower entry qualifications to succeed,” she commented.

The study highlights the varying function private education has in higher education systems. In Germany, Australia and the US, it tends to play an auxiliary role, supplementing an already robustly regulated publicly-funded sector. And in the case of the US, that group would also include private, non-profit universities.

In Poland, Japan and Chile, private universities have been integral in the massification of higher education nationally and “demand absorption”, the report says, “fulfilling the rise in demand for higher education, which national or local governments have been unwilling or unable to fund for ideological, economic, social or political reasons”.

Across all six countries studied private institutions have helped expand higher education, especially to students who are disadvantaged or have lower income backgrounds. Students at these institutions tend to be older, employed, and enrolling to upskill in an effort to find better paid employment.

“Private institutions must provide assurance that they represent value for money”

Australia, however, was the exception. The growth of the private sector in Australia was mostly fuelled by international enrolments, the study found, with international students accounting for over 80% of the student population at some providers.

“This is because private for-profit providers are more expensive than public sector providers, concentrate on recruiting international students paying full fees, and lack the resources and infrastructure to support disadvantaged and academically weak students.”

The report calls for a robust accreditation system for private universities. “Given that marketing campaigns focus almost exclusively on increasing enrolments, prospective students need an effective means by which to assess the worth of an institution and the quality of provision on offer,” said Callender.

“Private institutions must provide assurance that they not only represent value for money – both to students and the general public – but that they have a strong financial foundation and will not ‘fail’ should the demands of the market change.”

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