© 1997, Educause
NLII Viewpoint, Fall/Winter 1997

Educause – National Learning Infrastructure Initiative

Time for Nationally Authorized Universities

John Sperling and Robert W. Tucker


Robert Tucker and John Sperling graciously agreed to write an article for the NLII Viewpoint that captures many of the key ideas from their recently published book For-Profit Higher Education: Developing a World-Class Workforce. In it, the authors make a vigorous case for creating for-profit universities aimed at working adults as an answer to the mismatch between society's needs for workforce development and the ability of traditional colleges and universities to respond. The advantages of for-profit institutions include their ability to expand to meet changing needs without burdening taxpayers--moreover, they pay federal, state, and local taxes; their access to private capital for start-up and/or expansion funds to respond rapidly to new demands; and their goals of growth and profit, which can be achieved only by producing high-quality service that satisfies customer needs at the least cost.

Many would agree with the criticisms of higher education advanced by Tucker and Sperling, but they would argue that American higher education is, in fact, changing in response to emerging societal needs. As you read, I urge you to set aside your views on that subject and consider Tucker and Sperling's very thoughtful ideas about what is needed to create a new higher education system to serve those currently unserved. For example, Tucker and Sperling point out that higher education's data-gathering entities have not kept up with changes in the higher education market. "They do not collect, analyze and report educational statistics that would help a progressive institution to understand and respond to its market. While we know that many consumers of higher education are working adults, there are no national data on students' current position in their career path or on their near- and long-term career goals." This is a point currently echoed by many of the traditional institutions as they seek to move aggressively into the distance-learning market but are stymied by the lack of market research that could assist them in being more responsive to societal needs.

Tucker and Sperling place strong emphasis on the importance of outputs, or learning outcomes; you will see this reflected in their suggestions about product metrics, in their support for a standardized curriculum as a quality control mechanism, and in their vehement objection to the input-oriented standards of accreditors and state and federal regulatory agencies. Indeed, they argue that emphasis on "capital- and labor-intensive 'input' standards" are major contributors to higher education's rising costs. The consequence of those input standards is that "programs that require little capital plant and have cost-effective operations will often be denied approval for lack of educational quality."

The thicket of input-oriented regulations, Tucker and Sperling assert, makes rapid change difficult or impossible. The authors make a strong case for deregulation of the higher education environment: "We need preemptive legislation to address the nation's interests in higher education in much the same way as we have addressed them in regulating railroads, airlines, electric power generation, securities exchange, telephonic communication, radio, television and banking. In each of these instances, technologically driven change in the social order created a national market that made state regulation anticompetitive, ineffective and often irrational." Whether or not such legislation is enacted may be irrelevant since, as they point out, "today, American institutions can offer electronically delivered education over the Internet to students living in every nation that has a telephone system. Neither the fifty states nor any nation can control this activity."

--Carol A. Twigg

For-Profit Higher Education: Developing a World-Class Workforce contributes to the criticism of U.S. higher education for its failure to adapt to the changing needs of its constituents; it also offers specific remedies to the portion of higher education's ills that our experiences qualify us to comment on. The substance of our recommendations comes from having created, led, and managed the nation's largest for-profit university for working adults, the University of Phoenix. Over its 20-year life, UOP has grown from eight students meeting under makeshift circumstances to more than 32,000 students meeting in classrooms in 45 communities in 11 states and Puerto Rico. UOP's Online campus enrolls more than 1,600 degree seeking working adults throughout the world via its asynchronous computer-mediated distance learning program. Projections have UOP enrollment at 100,000 by the year 2000. Unlike nearly all other institutions, UOP enrolls only working adults--the average student has been working in a career-oriented position for eleven years. About 80 percent of students study business or management and most others study nursing, education, counseling, or information systems. UOP's parent company, Apollo Group, took its stock public in 1994 and has become a major financial success. Working adults make up more than 40 percent* of the enrollment in U.S. higher education. Unlike the slow returns realized from education provided to youth, the education of working adults provides immediate benefits to the workforce and the economy.

We do not mean to suggest that criticism should come only from those who have created or managed a successful university or have attempted to carry out their recommendations. We do say that our recommendations would be much different had we not had to survive under the harsh taskmaster of practical experience in a closed market that was openly hostile to competition. We believe that many criticisms of U.S. higher education are too simplistic to have constructive effects beyond those of the canary in the coal mine. We will review and summarize only those criticisms that we believe to be important and will recommend change in context.

Criticisms of Higher Education

The most common criticism of higher education is that its budgets are out of control. Although the growth in higher education spending has flattened slightly (and probably only temporarily) this past year, higher education budgets have grown at rates from two to six times that of the CPI for more than 20 years. We address this problem in our book, as does a recent article by Chester Finn and Bruno Manno.[1] Some critics suggest that the budgetary problem is much worse than it appears when one factors in the declining teaching load of the professorate. Nationwide, the faculties in four-year institutions are in the classroom half as much as they were 20 years ago. In the large public and some private institutions, undergraduate teaching has become the near-exclusive province of the TA and adjunct faculty. We will suggest new accounting metrics to address this issue below.[2]

A growing criticism of higher education is that it has failed to adapt to the changing needs of the society and its students. Given that a high proportion of higher education's students are working adults, one often overlooked constituent group is the employers, most of whom subvent the tuition of their employees/students.[3] Our research in employer impact assessment for colleges and universities puts us in regular contact with the nation's major employers. While we find that employer/university partnerships are growing in number and kind, most employers still comment on the large disparity between "corporate speed" and "college speed." Without exception, corporations want their local educational institutions to learn to move more quickly. With between $60 billion and $80 billion spent annually on corporate education, financially strapped colleges and universities are attempting to move more quickly and aggressively on this new market. As we will discuss below, the thicket of regulations makes rapid change difficult or impossible.

Nationally, the length of time to graduate a four-year program is approaching six years. At some institutions, working adults, most of whom attend part-time, require 10 years or more to complete a bachelors degree. Those criticisms are especially valid when applied to the large California State System and some large state institutions in the East. Many colleges and universities have responded to budget shortfalls not by increasing efficiency but by cutting classes--a decision that creates a downward spiral of inefficiency. Many institutions offer required classes once every four years--pity the student who is ill on the first day of registration or stands in line while learning that his class filled 10 minutes ago.

Irrespective of higher education's total budget, there is criticism regarding the taxpayer costs of higher education. Our calculations show that taxpayers subordinate $6,428 of the annual expenses for every student who attends a public institution of higher education. This figure is not likely to surprise most taxpayers. What may come as a surprise is the fact that taxpayers subordinate $5,773 per annum of each student's expenses for attending a private institution. Taxpayers provide greater levels of financial support for students attending elite private institutions. In 1995, taxpayers paid more than $1 billion to send 161,000 talented undergraduates to the nation's 50 most expensive private colleges and universities. Increasingly, the criticism of taxpayer costs for higher education rests on understanding these statistics. Governors, and members of state legislatures, say that they don't know what their institutions do with all of the money they receive. Largely because they hold those views, they welcome alternative forms of education that reduce taxpayer costs.

The New Universities

In economic terms, the mission-critical activity of higher education is the production of degrees to specified standards of quality, quantity, and cost. Other activities of higher education--such as research, sports, and joint ventures--should be accounted for separately. As principles of accounting and accountability, we should never commingle the costs of those activities with mission-critical activities. In our view, a root cause of higher education's current problems is that its organizational structures and information decision-support systems are wholly inadequate to meet modern needs or to adapt to new needs that will emerge in the future. Restructure those fundamental elements and everything else becomes possible; fail to change and no amount of effort will permit an incremental adaptation of higher education, as we know it, into the 21st century. If the first order of business is to define the mission-critical activity and all subordinate activities (for some institutions, research will be the mission-critical activity), the second order of business is to create organizational structures that manage all facets of this activity to desired standards of quality, quantity, and cost. The design of the new universities must be such that all of its functions (vision, human resource development, consumer relations, operations, production, accounting, evaluation, etc.) strive toward best-in-class status for the institution's products. We will review a few of these issues separately.

Understanding the Consumer. Neither the U.S. Department of Education nor any of higher education's ancillary data gathering entities have kept up with changes in the higher education market. Among other things, they do not collect, analyze and report educational statistics that would help a progressive institution to understand and respond to its market. While we know that many consumers of higher educat ion are working adults, there are no national data on students' current position in their career path or on their near and long-term career goals. Having this kind of information makes little sense if one assumes that students are 18- to 24-years old, nonworking youth. We have asked these fundamental questions about student demographics and, in doing so, have found six distinct groups that make up most college and university populations.

  • Group 1 – 3.9 million traditional undergraduate students–ages 17 to 24, seeking a bachelors degree and enrolled full-time at a campus.
  • Group 2 – 650,000 traditional graduate students–ages 22 to 34, seeking either an academic or professional master's or doctoral degree and enrolled full-time at a campus.
  • Group 3 – 2.9 million semi-traditional undergraduate students–ages 17 to 24, seeking a bachelors degree and enrolled part-time at a campus, usually working part-time in a noncareer, entry-level job.
  • Group 4 – 487,000 semitraditional graduate students–ages 22 to 34, seeking an academic master's or doctoral degree and enrolled part-time at a campus. (Employment varies among this population. Some have part-time work in a variety of campus and off-campus noncareer jobs. Others work in full-time careers, e.g., school teachers, principals and superintendents or college teachers completing their doctoral degree.)
  • Group 5 – 5.3 million non-traditional undergraduate students–ages 25 and up, they are career-oriented members of the labor force, usually seeking a first degree in an on-campus or off-campus program, enrolled full- or part-time.
  • Group 6 – 880,000 non-traditional graduate students--ages 25 and up, working full-time in a chosen career, enrolled full- or part-time, seeking a professional master's or doctoral degree in an on-campus or off-campus program.

Students in Groups 1 through 4 are those typically thought of as the consumers of higher education, although they make up only 56 percent of the higher education student population. The remaining 44 percent (Groups 5 and 6) are adults, mostly working, whose numbers are growing and who, by the 21st century, will make up half the higher education student population. Groups 1 through 4 are served by traditional colleges and universities, i.e., institutions with a tenured, full-time faculty, a comprehensively equipped main campus and, often, residential facilities for students. Those institutions provide the desired educational services and have adequate capacity to meet the needs of traditional students for the future. They do not provide the educational systems and services needed and wanted by working adult students, nor do they have the capacity to satisfy this growing segment of the student population. The mismatch between the needs of working adult students and youth-centered institutions extends beyond missing components; many of the same facilities put in place to serve youth--e.g., dormitories, gyms, and extensive commons--impede the efficient access of working adult students.

Product Metrics. Only a few college administrators can provide cost-per-unit-of-service statistics for each of their educational programs. Virtually no administrator can account for the other metrics that should be in place and informing decisions at any responsible educational institution. Here is a sparse set of the metrics to create, gather and distribute on each institution's information systems:

Measures of Inputs to the Education System

  • institutional resources
  • faculty resources
  • student capabilities
  • student goals
  • baseline measures on student knowledge, skill, affect, etc.
  • stakeholder needs (students, instructors, employers, the institution)
  • cost per seat (including virtual "seats")

Measures of Education Process

  • instructional quality (including fidelity to standards)
  • consumer satisfaction
  • cost per unit of instruction

Measures of Education Outcome (reported in metrics of value added)

  • major field achievement (cognitive knowledge and affective disposition)
  • skills assessment
  • goal fulfillment

Measures of Impact Attributable to Education

  • workplace effects
  • employer satisfaction
  • referral rates back to the educational institution
  • cost per unit of impact (some measures require a partnership with employers)

Contrary to the assessment naysayers, not one of those metrics commits an institution to a particular ideological or pedagogical perspective. Institutions can frame educationally relevant goals and outcomes in any way that meets the needs of their constituents. In our view, avoiding assessment is avoiding accountability and those who do so should not enjoy the privileges or benefits of having the public trust.

Rewarding Desired Outcomes. For the most part, organizations produce the very things they reward and pay attention to. Policy analysts have spoken at length about the misalignment between higher education's needs and the rewards of its employees, especially its faculty. However well intended, current policy analysis on higher education does not contain the above system of measures and information. Without such information there is absolutely no way to assign rewards intelligently. One might, for example, reward teaching behavior (many institutions punish it and few reward it now). This is a good start, but it is analogous to compensating auto workers on the sheer number of cars produced without regard for how well they run, the defect rate, the level of consumer satisfaction, etc.

Leveraging Intellectual Resources. Like most organizations, most of higher education's budget goes to compensate its employees, especially production employees (i.e., faculty). Any change in the way of doing business that increases the ratio of production employees to production affects the efficiency of the organization. Unlike most knowledge-based organizations, higher education has failed to exploit new organizational structures and, especially, new technologies for leveraging its intellectual resources. Often, it has opposed such intellect-leveraging strategies, citing its concern for academic quality. This resistance or, at the least, passivity should not come as a surprise. What incentives do institutions of higher education have to leverage their intellectual talent and become more competitive? Innovation is common at some institutions of higher education but there is little leveraging of innovation at the institutional level. The most common form of innovation applies a technologically based system, such as the Internet, to increase quality or access to education. Most of those innovations are boutique-like; often they involve one instructor, a handful of students and have a life span of less than one year. The taxpayer funds most of those innovations and we do not require them to prove cost-effectiveness. Real-time, satellite-linked distance learning is one example of a technology in which few innovations can produce a cost-effective financial model. Our guess is that the cost-per-unit-of-learning-outcome statistics for most satellite education models would make it a poor choice in most situations. To determine the benefits of higher education's exploitation of technology, we must project innovations to a larger scale and subject them to full cost and outcome accounting. Distance learning is a market of enormous, largely uncharted potential that can provide a source of income to financially ailing colleges and universities. One can only wonder why we do not mine this deep vein to the fullest extent.

Creating a Permanent Educational System for Working Adults

Currently, higher education is a youth-centered system in which we train a professional class of teachers and professors to impart knowledge, on a college campus, to students of all ages. Students have little opportunity to apply to the world of work what they learn in the classroom. Effective education for working adults requires instructors who bring their knowledge and skills from the workplace to enable those who are less knowledgeable and less skilled to make immediate improvements in their work performance. An adult-centered university is based on a rationally designed teaching/learning system, the goal of which is to enable the students to achieve a given set of learning outcomes in the most efficient way possible. Following are characteristics of a well designed adult-centered university.

  • A professionally developed curriculum for each course standardized for all courses taught in any location by any instructor. It gives equal weight to theory and practice and requires students to apply in the workplace what they have learned in the classroom, and to bring to the classroom what they have learned in the workplace.
  • An educational structure that requires students to work in groups where they learn and practice the skills of leadership and followership and the values of cooperation, to name a few.
  • A faculty of academically qualified working professionals who can bring the professional and practical realities of the workplace into the classroom.
  • Time-efficient instruction offered at times, places and ways convenient to the students.
  • Management that embraces the student as an intelligent and informed consumer of educational services and strives constantly to improve the efficiency and quality of those services.

Cost Differentials Between Youth-Centered and For-Profit, Adult-Centered Universities

The California Postsecondary Education Commission calculates that the cost of acquiring, developing, constructing, and equipping facilities over the 30-year life of a campus in 1995 dollars is $1,658 per full-time equivalent (FTE) student. Excluding costs for athletic and physical education facilities drops the figure to $1,577. Neither figure includes the cost of acquiring land for the facilities. Adding a likely least cost for land raises the per-student build-out cost to $1,628. The average lead time for planning new campuses is eight to 10 years and construction times average two to five years. Yet much of the time and cost of planning and building a traditional campus plus the cost of operating it arise from the need to provide facilities and services that are neither used by, nor are useful to working adult students.

The for-profit, adult-centered educational model has a build-out cost of $432 per FTE student calculated over the same 30 year period, and the build-out of adult-centered universities is accomplished in less than six months. Three months are required for planning and site selection and an additional three months are required for construction (building out leased space). Facilities are placed in leased office space that is attractive and within easy commute distance for students; the only capital costs are for building out classrooms and labs and for furniture and equipment--computers, audio/visual equipment, etc.

In short, an educational facility able to accommodate 500 to 1,500 students can be planned, constructed, staffed, and readied for operation in scarcely more time than the first group of students will require to rearrange their personal and professional lives to adapt to returning to school. The corporate world is appreciative of this kind of responsiveness because it corresponds with their typical time lines. This six-month process can be replicated simultaneously in any location where a sufficient concentration of students exists. In areas of insufficient population concentration to support a 500-student facility, distance education is the preferred alternative. Thus, even before it begins its operations and no matter who is paying the costs, the for-profit adult-centered university is designed to be more sparing of capital resources.

Benefits of For-Profit, Adult-Centered Universities

Although adult-centered universities can be either nonprofit or for-profit, our experiences have convinced us of the dramatic advantages associated to the for-profit university. Those advantages extend to all stakeholders in the education enterprise. Among the advantages of for-profit universities are the following.

  • They pay federal and state income taxes and local property taxes.
  • They have access to private capital for funds needed for start-up and/or expansion and therefore can respond rapidly to changing and growing needs.
  • Two of their goals are growth and profit--goals that, over time, can only be achieved by producing a high quality service that meets the needs of the customer.
  • They are managed to deliver a service at a given level of quality at the least cost, and a system of faculty governance and close links to external stakeholders helps to ensure that they meet the advertised quality standards.

Regulatory Reform Needed

Why is the pace of innovation so slow in higher education? Why is there so little leveraging of higher education's intellectual and material resources to gain productivity? Why is there not wholesale exploitation of the new information technologies to produce more efficient educational models--including the for-profit adult-centered model? Why are the same technologies not exploited to assess the processes and learning outcomes of education and, ultimately, to assess their impact on the workplace and the economy? The most under-explored answer to those questions relates to excessive regulation and state control of the structure and processes of higher education.

Because of the development and expansion of state regulatory agencies and private accrediting associations, we have a fragmented market in higher education consisting of approximately 11,000 recognized postsecondary institutions, including 3,700 small, medium and large public and private colleges and universities operating in a welter of overlapping local state and national markets. These institutions operate under the rules of more than 65 accrediting associations, 50 state licensing agencies and, increasingly, the U.S. Department of Education, the U.S. Department of Defense and the Veterans Administration.

Regulatory Constraints on For-Profit, Adult-Centered Universities

Few needed reforms will be initiated without removing the existing barriers that protect higher education from the natural consequences of its actions, consequences it would experience were it to operate fully or even largely in the marketplace. It is regulation that keeps higher education out of the learning experiences of the marketplace and allows it to develop unrealistic, often counterproductive standards and practices. The regulators of this fragmented market--accreditors, state agency officials and a variety of federal officials--have constructed capital- and labor-intensive "input" standards that they believe, usually with little justification, will ensure that the education offered by institutions they license or accredit will have value. Those input standards include not only specifications on physical plant, faculty, and seat time per credit, but a prohibition on paying anyone based on their success in recruiting or retaining students. Enrolling and retaining working adult students is vital to the future of our economy and monetary incentives are essential to this process. Although monetary incentives for performance are now accepted as the primary engine that will improve productivity in business and, increasingly, in progressive not-for-profit and governmental organizations, we have banned these incentives from higher education. This is bad public policy.

Excessive Regulation Stifles Innovation

The excess of regulation in higher education makes it difficult, often impossible, for institutions to innovate and thus they are unresponsive to the rapidly changing needs of the society and the economy. Among the more harmful regulations are the substantive change rules enforced by regional accrediting commissions. These rules make meaningful innovation time consuming, tedious, and costly, and almost ensure that a college or university cannot respond to rapidly changing economic and social conditions. Substantive change is the Catch-22 of accreditation: Any institution that wants to meet the changing needs of society through innovation is viewed by the accreditors as showing symptoms of instability. The rhetoric of regional accreditation urges institutions to change to meet new needs, but we reward institutions for their stability. We view innovation as suspect because almost any change will endanger the prerogatives of the faculty and call into question the capital-intensive input standards and operationally inefficient structures that protect those prerogatives. Systems of education that require less capital and offer more efficiency are viewed as serious threats and elicit vigorous opposition. The stewards of those standards are also the regulators that grant state licenses and award accreditation, without which no legitimate institution of higher education can survive. Only national legislation that supports the development and operation of more cost-effective and educationally effective institutions can bring needed change to the higher education enterprise.

State Regulation and Restraint of Trade in Higher Education

Most laws and regulations governing the operation of private higher education institutions are written and administered so that decisions remain discretionary and it is almost impossible for an institution to challenge a negative decision success-fully. In all but a few states, the administrative and academic standards of capital-intensive traditional institutions are the basis of licensing requirements for private institutions, despite their educational missions. Consequently, programs that require little capital plant and have cost-effective operations will often be denied approval for lack of educational "quality."

Most state agencies are more concerned with protecting local institutions through restraint of trade than they are in consumer protection. This is evidenced by the small number of institutions of higher education operating outside the state in which they are incorporated. In 1993, only 34 institutions of higher education operated in more than one state and only nine of them operated in more than two states. Out-of-state programs had a combined enrollment of 47,000 which represented 0.3 percent of total higher education enrollment. Twenty-six states had no students enrolled in programs operated by out-of-state regionally accredited institutions; twenty states had less than 1 percent in out-of-state enrollments and four had less than 2 percent. Largely through the efforts of the University of Phoenix, these statutory barriers are being interpreted differently in some states but we have a long way to go. In 11 states, including the industrial states of Connecticut, Pennsylvania, New York, and Ohio, no out-of-state institution can be licensed to operate.

Federal Regulation

The Higher Education Act of 1992 was a watershed legislation in that it altered the power relationships of the Triad (federal and state governments and private accrediting associations). The 1992 Act gave the U.S. Department of Education authority to mandate standards and procedures for both the accrediting associations and the state higher education agencies. From this came broadly based prescriptive regulation that created yet another barrier to the changes that higher education needs to make if it is to play a significant role in economic renewal. The best that we can say for these massive federal regulations is that they are so detailed and prescriptive that they will be more honored in the breach than in the observance. A testament to the unworkable nature of parts of this legislation is the fact that they have already abandoned a key provision to involve states in additional regulations.

Federal Action is Needed to Free Interstate Commerce in Higher Education

State regulating entities appeal to the sanctity of the 10th Amendment as evidence of their rights to chart fifty different courses for higher education. The arguments made for state and even local control of education at the K-12 level fails when extended to the global market in which the products of higher education compete. We need preemptive legislation to address the nation's interests in higher education in much the same way as we have addressed them in regulating the railroads, airlines, electric power generation, securities exchange, telephonic communication, radio, television and banking. In each of those instances, technologically driven change in the social order created a national market that made state regulation anti-competitive, ineffective and often irrational. As communications technology increases in its scope and effectiveness, we are knitting the U.S. economy ever more closely together. As those changes take place, state regulation of what is clearly national interest, increase the costs of doing business at every step and seldom return value to that which they regulate.

Distance Education: A Window of Opportunity for Regulatory Reform

Communications technology is creating a national and global market for the production and sale of education delivered across state lines by a variety of electronic modalities. Today, a few progressive adult-centered universities are operating interstate, not only in their distance education programs, but also with their campus-based education in states where they can obtain a license. Beyond the desire of these institutions to exploit the profit potential of new markets, for-profit universities have usually invested their capital in standardized programs and computer information systems that are only financially viable if they can spread their costs over a large student population. The only thing that keeps for-profit universities from entering every state with large urban markets is state constructed barriers to entry. Fortunately, the development of ever more effective electronic modes of delivering education at a distance has challenged the tradition of unfettered state control over education. This confluence of events presents an opportunity for the federal government to rationalize the higher education market by making it possible for colleges and universities to operate interstate without having to meet 50 different licensing requirements and six sets of regional accreditation criteria. Today, American institutions can offer electronically delivered education over the Internet to students living in every nation that has a telephone system. Neither the 50 states nor any nation can control this activity.

Legislation to Create a National Market in Higher Education

In a small step in what will undoubtedly be a long journey toward the achievement of a national market in private higher education services, we have drafted proposed legislation that would create a national market in private higher education services while maintaining state licensure and regional accreditation. To reduce the opposition of traditional institutions and state licensing officials, we have chosen to limit the sphere of federal action to private institutions that seek authorization to operate interstate and, to have consistent accreditation standards, these institutions would agree to be evaluated by standards driven primarily by learning outcomes and impact rather than inputs. Traditional, campus-based institutions that wished to restrict their operations to the state in which they are chartered would remain under current state regulations and, apart from the growth of a new form of competition, would be unaffected by this proposed legislation. A Nationally Authorized University would be one whose mission is to provide education to members of the workforce and one that embraced learning outcomes assessment as the basis upon which the institution would be evaluated by the appropriate state licensing agency and accrediting association, and would be under the continuing oversight of the USDOE.

The Efficient Path

The $1,600 per student capital cost of buildings and equipment and the $7,500 it costs the taxpayer for each student each year makes the cost of expanding the present system of higher education prohibitive. Only for-profit institutions can be expanded to meet the demand without a burden on the taxpayers. Even if the present system--full-time faculty teaching full-time students--could be expanded to meet the educational needs of millions of workers, the workers could not afford to attend. Half the cost of attending a traditional college or university is foregone income and the higher the income, the higher the cost of education. The cost to a person who leaves a $40,000 a year job to attend a two-year MBA program is $80,000 plus the $80,000 and up it costs for tuition, books, and living expenses. Not many workers are willing to spend $160,000 for a degree because it is not likely to be a good investment. When foregone income and the expense of supporting a large campus are removed, the cost of a two-, three-, or four-year degree drops into the $5,000-15,000 a year range and becomes a good investment for millions of workers.

Although politicians recognize the need for workforce higher education and bemoan its prohibitive costs, they are so locked into traditional assumptions they cannot recognize the tested solution that lies at hand. All they need to do is recognize this new model for higher education and understand that this model cannot grow to a capacity that can meet the nation's higher education needs until it is free of the constraints of state-by-state regulation.


* This figure varies from 40 to nearly 50 percent, depending on whether the distinction is based more on age or on holding a career-oriented job.

1. Finn, C. & Manno, B. (1996). Beyond the Emerald City's Curtain, Adult Assessment Forum, (VI),2.

2. Educationally speaking, turning the classroom over to the adjuncts may not be a bad thing. Many adjunct professors are skilled practitioners who teach occasionally, for pleasure and for a second source of income. Our research has shown without doubt that practitioner faculty are superior teachers of adults and even many non-working younger students. The reason? Working adult students prefer to learn from someone who has both academic credentials and current workplace experience that will broaden their own understanding of the workplace.

3. Extrapolating from employer impact studies conducted by InterEd, Inc., more than two-thirds of medium and large companies subvent all or some of the tuition expenses of their employees who attend local colleges and universities.

John Sperling, Ph.D. is founder of the University of Phoenix and the Institute for Professional Development and chairman and CEO of Apollo Group, Inc.

Robert W. Tucker, Ph.D. is president of InterEd, Inc., a research firm that guides innovation in higher education, former senior vice president of the University of Phoenix, and founder and editor of Accountability and Assessment Forum, a journal on Innovation and Quality Management in Adult-centered Higher Education.

This article was written expressly for the NLII Viewpoint. These ideas are further elaborated in the book, For-Profit Higher Education: Developing a World-Class Workforce, by John Sperling and Robert W. Tucker. New Brunswick: Transaction Publishers, published October 1996. ISBN: 1560003065. The book may be ordered from Transaction Publishers, Rutgers-the State University, New Brunswick, New Jersey 08903.