Is For-Profit College Model Viable?

Posted: Updated:
(photo courtesy of Harrison College) (photo courtesy of Harrison College)
INDIANAPOLIS -

A professor in Indiana University's Educational Leadership and Policy Studies Department says he's not surprised another for-profit college has closed, given the "enormous pressure" they are feeling on enrollment growth. Vic Borden says near-full employment and demographic factors like Midwest population loss are making it hard for for-profit and small nonprofit schools to sustain enrollment. Borden says, while he does not expect the for-profit model to go away entirely, he believes it will contract over the coming years. Harrison College confirmed its closure last week, about two years after Carmel-based ITT Educational Services Inc. did the same. Last month, the Pittsburgh-based parent of the Art Institute of Indiana announced the closing of the Indianapolis campus by year's end.

Borden says for-profit universities are more tuition revenue-dependent than more traditional nonprofit and public institutions. He says many schools are struggling for enrollment because Baby Boomers and their kids are beyond college age, and a growing percentage of the 18-22-year-old population is minorities, immigrants and other demographic groups that have lower college-going rates.

In its statement last week, Harrison College called the closure a "difficult business decision," and said it was working with students to help them complete their education. When ITT shut down in 2016, it cited mounting pressure and sanctions from federal regulators and consumer agencies as well as a ban from receiving federal financial aid by the U.S. Department of Education for failing to meet accreditation standards.

Multiple schools, including WGU Indiana, the University of Saint Francis and Indiana Tech have offered assistance to displaced Harrison students. WGU Indiana Chancellor Allison Barber expressed her sadness about the situation from former Harrison College students. She also advised students looking to attend or return to college to carefully look at the accreditation of schools and the potential debt load that comes with their decision. In an interview with Inside INdiana Business, Barber added that WGU has unfortunately had practice at dealing with this type of situation. "The good thing about WGU is that we're online, so we provide access to students no matter where they live. We have students in all 92 counties in Indiana. And the second thing is that we can surge. We enroll students every month, so students don't have to wait and we don't have to worry about headcount, because we can handle growth quickly at WGU. So, we're ready, we're sad for these students," she said.

WGU Indiana Chancellor Allison Barber, whose university is offering to work with displaced Harrison students on their future, says WGU has unfortunately had practice from other recent closings.
Borden says, while he does not expect the for-profit model to go away entirely, he believes it will contract over the coming years.
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