Running head: SOCIAL JUSTICE IN FOR-PROFIT HIGHER EDUCATION 1

Social Justice in For-Profit Higher Education Institutions

Amanda Mitchell

LDR 604

Siena Heights University

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Social Justice in For-Profit Higher Education Institutions

Higher education has seen a shift in focus in recent years and opened up a plethora of

possibilities for new institutions. While the initial thoughts on for-profit education may have

been less than positive, some institutions have shown their worth and remained credible

throughout the criticism. This paper will aim to explain the philosophy and purpose of for-profit

higher education issues, highlight a social justice issue relating to for-profit education, and

provide an analysis on how these two issues are entwined.

For-Profit Education Institutions

Traditional higher education institutions in the United States are generally non-profit, for-

profit, or public colleges and universities. In recent years, there has been a substantial increase in

the amount of for-profit institutions, or FPI’s, with mixed reviews from the public and experts on

the subject. There are a few main differences between public/non-profit institutions and FPI’s

including categories such as enrollment, staffing, cost, revenue, and student subsidies. Many

FPI’s are seeing rapid increases in enrollment which increases their profits, a necessary function

in for-profit education. Staffing challenges are often faced in FPI’s that limit full-time job

availability and replace these positions with adjunct or part-time faculty. Revenues are required

for FPI’s in order to please their shareholders, an aspect with which public institutions are not

concerned. The lack of subsidies as compared to public institutions raises the tuition at FPI’s;

higher tuition simultaneously increases profits and allows these schools to provide education that

is not affiliated with subsidy or government funding (Fox Garrity & Fielder, 2016).

A major difference between for-profit and non-profit higher education institutions that

was highlighted in the research is the difference in the type of students who generally attend one

school or the other. Enrolling in FPI’s is particularly attractive to students who are motivated to
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complete their degrees quickly and include adult learners, veterans, and students with obligations

outside of their education. These institutions attract such students due to the focused subject

material and ability to complete their education faster than they could in a traditional learning

setting. The availability of online-learning is another large draw for students when considering

where to attend college (Allen, 2013).

While the aforementioned facts about FPI’s may portray them in a negative light when

compared to public universities, they have many positive attributes and offer an alternative to

traditional educational settings. Although the bottom line for FPI’s remains unchanged, the

opportunities they afford to students can outweigh the negative connotations associated with for-

profit education. The inclusion of FPI’s in a student’s choice of schools creates a social benefit in

that it allows education that may be otherwise unattainable (Fox Garrity & Fielder, 2016).

Ethics in FPI’s

Operational strategies and ethical reasoning differ among boards of different schools,

more so between boards of public/non-profit institutions and FPI’s. It has been suggested that the

demands placed on the leadership of FPI’s often conflict with one another and make it difficult to

behave ethically; shareholder demands, community involvement, positive employee

relationships, and delivering on their promises are only a few of the conflicting demands faced

by FPI’s. Serving the purpose of one of these demands may mean that another suffers, adding to

the difficulty faced in making ethical decisions within the business. Ultimately, these FPI’s are

operated as a business and the shareholders must be considered when making decisions, but that

does not mean that board members are unable to act ethically when faced with dilemmas

(Brower & Shrader, 2000).

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Although the demands of an FPI are varied and often compete with each other, it has

been found that the board members of an FPI often demonstrate higher moral reasoning levels

than the members of a non-profit board. Furthermore, the demands of shareholders are often

outpaced by stewardship and a duty to do what is best for the others involved in the company.

Further research is limited, but the general outcome is that not all FPI’s are operated according to

profits over the other demands on a board (Brower & Shrader, 2016).

Social Justice Issue

While researching for-profit versus non-profit/public universities, the comparison articles

consistently mentioned the amount of government subsidies being utilized by the schools.

Congress enacted the Higher Education Act in 1992, then reauthorized the Act in 1998 to state

that for-profit institutions could not exceed a 90% threshold of revenue coming from government

funds. These funds include federal grants, loans, and work-study programs, but do not include

revenues from veterans’ benefits (Kelchen, 2017).

The social justice issue enters when one considers that for-profit institutions are not

giving a discounted tuition rate when compared to public institutions yet offer the same

educational outcomes. Tax dollars go toward federal loans and grants, but the recipients of these

loans may choose to take their business to for-profit institutions, which in turn lowers the

investment of the American taxpayer. The opposite can also be true, though, when it is

considered that an American taxpayer can choose to take loans and use them at any institution

they see fit. The main issue in both of these circumstances is whether the federal funds are being

applied in an ethical manner by contributing to the profits of a private institution (Fox Garrity &

Fielder, 2016).

Impact on Stakeholders
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Some of the main stakeholders involved in higher education are the members of the

faculty and staff. For-profit institutions often have less full-time employees than competing non-

profit or public institutions due to the budget concerns and need for profits. While for-profit

institutions often pay more per hour than public institutions, there is a trade off in the benefits

offered based upon full or part-time employment. In the study conducted by Fox Garrity and

Fielder, it was reported that only 27% of faculty at FPI’s were full-time compared to 69% full-

time faculty at a public institution; from the 27% of full-time faculty, only 4% were eligible for

tenure (2016). These figures raise questions about the ethics of decision making within for-profit

institutions especially where full-time faculty are concerned.

One element of education that affects all institutions is enrollment; for-profit institutions

in particular are concerned with enrollment because it is the surest way to increase their profits

and please their shareholders. This is an instance in which shareholder demands intersect with

stakeholder demands. Students who enroll in an FPI become stakeholders, but their presence is

necessary to keep the school operating; shareholders cannot make money on the institution if

there is not sufficient enrollment. Again, the ethics of an FPI are questioned because their

demands from shareholders may be impacting the kind of students they are enrolling, whether

they keep students enrolled for certain grades, and how many students they are accepting per

class based on employee ratios (Fox Garrity & Fielder, 2016).

Corporate Social Responsibility

According to Weiss (2014), corporate social responsibility “involves an organization’s

duty and obligation to respond to its stakeholders’ and stockholders’ economic, legal, ethical,

and philanthropic concerns and issues” (p. 185). When considering an FPI’s responsibilities,

corporate social responsibility, or CSR, encompasses the needs of their shareholders as well as
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stakeholders. As previously mentioned, the board members of FPI’s often have higher reasoning

levels and utilize ethics more in their decision making, so it would be safe to assume that FPI’s

also have an awareness of corporate social responsibility (Brower & Shrader, 2000). Higher

education institutions have been implementing CSR for some years as a marketing tool, but it

means much more than to look good for the community and prospective students. Some have

suggested that CSR is redundant for public institutions since they already prove their worth by

offering quality education, but as time goes by, more consumers expect to see such responsibility

above and beyond the obvious calling of a higher education institution (Othman & Othman,

2014).

The four main categories of corporate social responsibility include economic, legal,

ethical, and discretionary expectations, all of which derive from what a community or population

expects from a business (Othman & Othman, 2014). These functions of CSR serve to keep a

business operating as well as to put themselves in a good position with the community

surrounding them. To relate specifically to higher education, the purpose of CSR is to promote

the “the wellbeing of staff and students, and good relations with stakeholders” (Othman &

Othman 2016). One example of such a measure is community involvement; FPI’s can

demonstrate their commitment to corporate social responsibility by offering goods and/or

services to their community at a discounted price. They can also offer better pay and benefits for

their faculty as well as an above-average learning environment for their students.

Personal Applications

As an employee of a for-profit higher education institution, I spend a lot of time

defending our school and our purpose. The tuition and fees are markedly higher for our students

at Concorde Career College, but we offer a unique experience that many public/non-profit
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institutions do not offer. Our accelerated programs, competitive enrollment process, and plethora

of student support offered set us apart from other colleges in the area. We attract a different kind

of student, generally one who is more motivated and prepared for the rigorous program they are

enrolling in. While we do not exclude traditional students from our programs, we do see the

value in enrolling students outside of the traditional sense of the word; for example, we have

many adult learners, veterans, and students with families to care for.

It concerns me that most for-profit institutions, including the one I work for, accept so

much federal aid and roll it toward their profits. However, in the long run, our school specifically

offers extensive education on federal funding and how to repay loans to our students. We also

require our students to supply a resume prior to graduating and place them in jobs as soon as they

gain licensure in their respective fields. Many public institutions do not offer such extensive

career services, nor do they discuss the impact of federal loans with their students sufficiently.

As a faculty member of an FPI, I will say that we get paid more hourly, be we definitely

have less full-time positions available. Due to the nature of our program, I work on a PRN, or as

needed status, but during two of the three terms in our program I work close to 40 hours per

week. This balances out during the slower term when I do not have a regular schedule, only fill

in for the others who are full-time or part-time. This seems unfair at first glance, but it is perfect

for dental hygienists who prefer to continue working clinically. For every instance in which an

FPI is seen negatively, there is a positive detail at work.

At Concorde, we take corporate social responsibility very seriously. It is not a marketing

technique, but a commitment that we make and keep daily. Our dental hygiene clinic is a great

example of community involvement and CSR. Veterans and active military receive completely

free dental hygiene care while adults and children unassociated with the military receive
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significant discounts on their dental hygiene services. For example, a child can get all of their

routine x-rays, a cleaning, a dental exam by a doctor, and fluoride treatments for under $30. This

would be impossible in any dental office unless the patient had dental insurance. The clinic

operations are paid for partly by students’ tuition and fees, which covers supplies and overhead,

but also operates at a profit due to the volume of patients that the students see.

Overall, I feel as though FPI’s automatically get a bad reputation due to the institutions

that do not do right by their students, but they also have great aspects that often go ignored. The

governmental regulations placed on higher education institutions keep FPI’s from operating

unethically and set a limit for how much profit can be earned from government funding. After

conducting some research and seeing so many negative opinions of FPI’s, I still feel that the

good outweighs the bad and that for-profit institutions offer a unique experience that other

schools simply cannot offer.

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References

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