How The Unleashing of Public Opinion Is More Damaging To The For-Profits Than Governmental Regulation
By now, you have heard about last week’s Senate hearings and the outrageous tactics caught on tape by Government Accountability Office secret-shoppers. The recordings were so egregious that they were universally condemned by the Career College Association (CCA), the for-profits who were involved, and officials that represent not-for-profit institutions. We can all agree that you seldom see such consensus on any issue in higher education.
The airing of these recordings certainly caused a significant amount of bloviating by several United States senators as well as other elected officials. Despite the uniform outrage and tough talk, however, did the disbelief create a real movement to pass emergency legislation or extraordinary regulatory action? The answer to both questions is NO! In fact, a week later, nothing has changed at least from a legislative or regulatory standpoint – which is obviously not a surprise. These things take time.
Other phenomena have taken place over the past week that have prompted significant response from key actors in the for-profit space – actions that would have never been imagined in the recent past without the enactment of aggressive regulatory or legislative actions. What has caused Kaplan College to suspend recruitment at two of its campuses, Westwood College to abandon its incentivized recruitment plans, the University of Phoenix to talk tough about deceptive practices, and CCA President Harris Miller to sharply demand “real change” from the organizations his group represents?
The answer is simple – the court of public opinion has accomplished more in the past week to effect change than any governmental action would. We have seen a “shock and awe” amount of negative press coverage on the for-profits. All for-profits have been lumped together and painted as the “big-oil” of education – organizations that are bilking their students and the taxpayer all in the name of making a profit. For the most part, the coverage has squarely focused on the for-profits and has not examined overall accountability in higher education.
The media coverage has begun to shape a general consensus across party lines that for-profit education needs to be reformed. Those from the left feel this way because of their general distrust of the private sector, while conservatives (who have generally been more supportive of the for-profits) are growing concerned because of their predisposition to financial austerity and the feeling that federal Title IV funds are being misused. Then there are the students themselves. At least two (2) for-profit institutions that I consult for have shared that their recruiters and student affairs staff have been spending a lot of time over the past week overcoming student concerns due to all the coverage. It should be noted these two (2) particular schools are shining examples of how all for-profits should operate both in practice and the real outcomes these specific organizations have delivered for decades.
We now find ourselves in a place where the general public is demanding action. This is compounded by the fact that the hundreds of thousands of students who attend for-profit institutions are a part of the general public. If current and prospective students alike are raising concerns about the integrity and/or fitness of for-profit institutions, that can have a real adverse impact on the bottom line of the for-profits. As successful business organizations, the for-profits understand this and realize a tarnished image with the general public is more threatening than most anything the Department of Education or Congress can or will do going forward.
As a result, the for-profits are doing everything they can to overcome the tsunami of negative public opinion that if left unchecked could radically impact their marketplace opportunities in the future. Leaders of the sector are also beginning to take transformative action to demonstrate they take public sentiment seriously and want to make things right. This will be an important step for the sector’s public rehabilitation as well as the reinvention of certain for-profit schools into more accountable entities with increased integrity.
No matter what the final Department of Education regulations look like or whether Congress attempts to deal with for-profit sector via legislative action, I would not be surprised if the events of the last week are viewed in the future as the true impetus for change. Time will tell.
How can individual for-profits turn the negative coverage into a positive?
What are three (3) key steps each tuition-dependant non-profit should take immediately to take advantage of this climate?
These are questions we will answer in future posts.
John Hall
Greenwood & Hall
jhall@greenwoodhall.com
