The UK government wants to bring market-based reform to the country’s universities. The idea is that higher education is like any other industry. There are inputs, such as students, subsidies, tuition revenue streams and philanthropic support. There are outputs, such as graduates, increased social mobility and higher standards of living. And there are external forces that regulate the industry’s behaviour, such as government agencies and accreditation groups.

If higher education is just another industry, the argument goes, then market forces would serve it well (or at least better than coddling from the state). We should open the industry to competition. Reduce the support universities receive from government. Increase the responsibility of the student, the customer, in paying for educational services.



This model might make sense if our goal was to produce cars, clothing, and some other commodity more efficiently. But a university education doesn’t fit into this paradigm. It isn’t just a commodity.

Things get complicated when we liken students to customers. As early as 400 BC, Socrates understood that doing so was a mistake. Establishing such a relationship creates “merchants of knowledge,” as he put it, who are willing to give students what they want rather than what they need in order to keep the money flowing. Introducing this market-based exchange, explained Socrates, had a corrupting effect on the teaching and learning process. If only we had listened.



History lesson

We’ve had this lesson again and again. In the 19th century for-profit business colleges in the US claimed to offer students the moon. But the British parliament blasted these institutions for “unprincipled exploitation” and called them a “disgrace and discredit” to an “honourable profession”.

A similar conclusion was reached by the medical (pdf) and legal professions of the late-19th and early-20th centuries. They too believed that for-profit, market-based strategies eroded professional, ethical and academic standards. The strategies, investigators concluded, produced shady institutions that were more interested in a quick return than anything else.



The future of marketisation looks bright for these companies but bleak for their students

Later on, the US saw a massive explosion of for-profit, market-oriented institutions following the GI bill of 1944 (which provided benefits such as college grants to war veterans) and the 1972 re-authorisation of the Higher Education Act, which extended the eligibility for student finance. This came with age-old tricks plied by higher education hucksters and shysters. The phrase “diploma mills” came into popular usage during the era.



By the late 20th century, Wall Street banks and investment firms got into the business of packaging, commodifying and selling degrees. With the help of politicians who promoted these ventures and cut regulatory red tape, we now have a well-entrenched $35bn (£27bn) for-profit higher education goliath in the US. Almost all of this cash comes directly from taxpayer-supported student financial aid programs. For-profits typically take those funds and spend way more on advertising and profit distribution than on teaching.



Little has changed in the long history of market-based reforms of the sector. For-profit institutions face inexorable pressure to water down standards in order to turn a profit. They fight regulation and transparency through aggressive lobbying campaigns. And they continue to do all of this despite the avalanche of whistleblower, class-action and shareholder lawsuits filed against them since the turn of the 21st century.



Learning power

With the presidential election cycle coming to a close in November, the issue of university marketisation is as important as ever. Both likely candidates for president of the US, Donald Trump and Hillary Clinton, have unprecedented links with the for-profit higher education industry. Trump has even owned one bearing his name and recent revelations claim the institution defrauded students out of millions of dollars.

Clinton’s husband, meanwhile, has travelled all over the world promoting another for-profit called Laureate International Universities. Students have sued a Laureate subsidiary, Walden University, for practices not unlike those of Trump University. The future of marketisation looks bright for such companies, but bleak for their students who leave with a mountain of debt and, if they graduate, a degree often dismissed by employers.

Some for-profits, like Apollo, claimed to have turned over a new leaf. Through a slick public relations campaign, they point to changes in organisational structure and promise that moving from being publicly traded to privately held will make them a better corporate citizen. If history is any guide, we shouldn’t hold our breath.

Changing those at the top does little to address the conflicts of interests that arise when profit motives privilege owners and shareholders, at the expense of students, faculty and long-term objectives.

If we can come to terms with the limitations of market motives – a tall order in today’s political and economic climate – there’s hope for achieving a future different from this past. It starts by rejecting the canard that a university education is just another commodity.



A J Angulo is the author of Diploma Mills: How For-Profit Colleges Stiffed Students, Taxpayers and the American Dream

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