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July 10, 2013

Honours without profits? A business school's link-up with a private firm is an interesting case study

The Economist:

THE sort of people who go through business school, one might think, would have no problem with the idea of education being provided for a profit. But when Thunderbird, a struggling school based in Arizona, announced three months ago that it was planning a partnership with Laureate, an education company, there was uproar among its alumni and students. A petition calling for the deal to be halted has won almost 2,000 signatures. By "selling out", Thunderbird's management is diluting the school's brand and cheapening its degrees, it says.

Thunderbird insists that the school itself, founded on a former air-force base after the second world war, will remain a non-profit. The partnership will be used to create foreign campuses, to expand the school's online teaching and courses for executives, and to introduce undergraduate degrees. But a damning report on America's for-profit higher-education firms, issued last year by a Senate committee, helps to explain the suspicions about the deal. It found that such institutions got $32 billion of student aid from the government in the 2009-10 academic year. They charge higher fees than state universities but spend less on teaching. Their drop-out rates are alarming: in 2008-09 the median student lasted just four months.

Posted by Jim Zellmer at July 10, 2013 12:47 AM
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