The secrets behind their success: attracting and graduating minorities in large numbers, for-profit universities offer access, convenience and some risk

Diverse Issues in Higher Education, August 23, 2007 by Paul Ruffins

In June, Robert L. Johnson, the billionaire founder of Black Entertainment Television, gave the commencement address for one of the largest predominantly Black colleges in the greater Washington, D.C., area. Johnson told his overwhelmingly minority audience that they had accomplished more than the average graduate.

"You've done everything every student has done, but you did it while working, while taking care of your kids, while going to church programs, while being part of the community, serving in the military, being a single parent, having to deal with elderly parents, having to take care of extended family," he said.

Johnson's message concerned the virtues of entrepreneurship--that people work harder when they are working for themselves. But he wasn't speaking to graduates of Howard University or the University of the District of Columbia. His words were directed towards graduates of Strayer University. Founded in 1892, it is a for-profit university experiencing fast growth, and Johnson sits on the Strayer Education Inc.'s board of directors.

For-profit schools have a long history of embracing new technologies and underserved populations. In the 1850s, they opened doors to women--who were largely banned from traditional colleges--and taught the use of newly developed writing devices called typewriters.

In Chicago in 1931, Dr. Herman DeVry opened a trade school focused on electronics, motion pictures and radio. During World War II, the Army Air Corps sent students to DeVry to learn the new skills critical for national defense. It became one of the first schools approved for government aid under the G.I. Bill.

Between WWII and the 1980s, for-profit colleges made up a small but stable segment of postsecondary education. Thousands of local, family-owned institutions taught skills like cosmetology, photography and truck driving. National chains like ITT Tech and Lincoln Tech offered electronics, heating and refrigeration and automotive repair.

However, in the 1990s, for-profits were revolutionized by the mounting demand for computer skills and a massive infusion of investment capital. Today, approximately 400,000 students attend for-profit schools in California alone, and about 2 million are enrolled nationwide.

The Benefits

Strayer's tuition of around $12,000 a year is about half that of a private university. But other educational options are cheaper still. For example, in the nation's capital region, students can attend UDC, Northern Virginia Community College or Prince George's Community College for about a third of Strayer's cost.

But for the graduate students in Dr. Elile G. Awa's required class on introductory research methodology, Strayer is a perfect fit. The university's Washington, D.C., campus is an office building convenient to several Metro stations. Many classes start at 5:45 p.m., right after work.

Awa is warm, lively and engaging, but she did not write any of the course materials. Many for-profits use software packages, curriculums and accompanying textbooks created by major publishers. This allows proven educational materials to be presented in a uniform (and economical) manner. Awa discusses the same materials a student would use taking the class online, and students can turn in assignments and take tests over the Internet.

The class is small--about 14 students--all Black or Asian. They actively participate, and none indicated that the quality seemed any different than what they had experienced at schools like UDC, West Virginia State University or the University of Maryland.

According to Margaret Weusi, who is pursuing a master's degree in public administration while working for the federal government, what Strayer really offers her is access, convenience and a minimum of administrative hassles.

"I took classes at UDC, and I spent a lot of time standing in lines," she says. Another woman in the class agreed.

"I applied to another master's program, but they required taking the GRE, which wasn't being given for three more months" she said. "At Strayer, I could start right away."

To understand the ramifications of for-profits' success, consider the educational and financial situations in New York City and Washington. New York's public universities have traditionally been famous for meeting the needs of working-class students and working adults. However, demand for degrees has far outstripped the space available in public institutions.

"Public colleges are in a slow-growth holding pattern," says Dr. Sam Johnson, a psychology professor and former vice president of student affairs at the City University of New York's Bernard M. Baruch College. "The number of seats in community colleges has been stagnant for decades. CUNY's undergraduate colleges have dropped open admissions, and getting into a four-year college now requires SATs and advanced courses in high school. As a result, many Black and Latino students are literally being forced into for-profit schools."

How could for-profit colleges expand when traditional universities faced lagging state and federal support? The current gold standard is the University of Phoenix, founded in 1976 by economist John Sperling. Unlike Strayer and DeVry, which spent decades evolving from being trade or secretarial schools, U of P was specifically created to deliver academic degrees. Sperling understood the powerful advantage of becoming a publicly traded corporation to attract expansion capital. U of P became a Wall Street phenomenon, consistently returning 20 percent to 30 percent while becoming America's largest university. During the 2005-2006 academic year, U of P's more than 300,000 students received more than $2 billion in federal student aid.