The Business of Schools

On my drive to and from school each day, I typically listen to NPR. My commute is only about 10-15 minutes, even with traffic, so I generally only hear a handful of stories. Even so, in the last couple of weeks, I’ve heard a number of stories about the recent decision by ITT Technical Institute, a for profit college, to shut down virtually overnight.

If you’re not familiar with the situation, the U.S. Department of Education announced in August that ITT Tech wold not be permitted to enroll students who use federal financial aid. This came after a number of investigations which alleged fraud and a number of other questionable business practices.

As I was driving in this morning, I heard this story, produced by our local NPR affiliate (WUSF). The gist is that ITT students—some of whom were only months from graduation—are basically left high and dry, and they now face a difficult decision: They can transfer some (though likely not all) of their credits to another institution and continue holding their debt in full, or they can discharge most (though likely not all) of their debt and start over from scratch at another institution. It’s a lose-lose situation.

The story quotes an ITT administrator in Fort Lauderdale as saying, “If I had a magic wand, I would have said, ‘If you’re closing, you teach them out, [show] that there’s a plan in place to teach out anyone who’s currently enrolled and that you don’t just shut the doors, you don’t just do that to people.”

To me, this story gets at the heart of my concerns about for-profit education ventures. I’ll be the first to admit that I am no expert on this issue, and I’m sure there are some valid arguments in favor of for-profit education. Still, I believe that educational institutions (even private, for-profit ones) have a fiduciary responsibility* to their students—a responsibility to act in their students’ interest that goes beyond their obvious responsibility to provide a quality educational experience. Unfortunately, in a for-profit school (or college, in this case), the motives and responsibilities become blurry.

Is the institution’s motive to education—or to make a profit, come what may? Is its responsibility to its students—or to its shareholders/stakeholders?  Of course, those don’t have to be mutually exclusive, but when push comes to shove, which will it be? We now know the answer for ITT Tech.

* I am not a lawyer and thus don’t use this term in a strictly legal sense. Rather, I use to suggest that institutions (or, more precisely, the administrators who guide those institutions) must consider students’ interests when making decisions about the company. They must honor the trust that students place in them when they enroll.

Read education journals or blogs for any length of time, and one thing quickly becomes apparent: educators are obsessed with the idea of “innovation.” And rightly so. But the ways in which we conceive of innovation tend to be confined to the classroom. One reason I so enjoy Steve Taffee’s blog, Blogg-ed Indetermination, is because he frequently offers an innovative perspective on the more mundane practicalities of school life–everything from classroom architecture to lab safety.

In today’s post, he offers a terrific take on why a relatively old idea–teachers’ unions–might be a crucial innovation for independent schools in the 21st century.

As Taffee correctly points out, there are very real concerns about the economic sustainability of the independent school model over the long-term. Particularly if we hope to make our schools more–not less–diverse, we must find new ways of keeping costs down while still providing a high-quality educational experience.

When you’re talking about someone’s kids, though, slash-and-burn accounting is unacceptable. As I’ve said before on this blog, in education–even private education–the bottom line shouldn’t be the bottom line.

Taffee puts it like this:

Financial pressures in independent schools, coupled with the need to demonstrate curricular leadership, may lead to the expectation for teachers to adopt new practices despite diminished support for professional development activities. Sabbatical programs, educational travel to conferences, released time for course development and collaboration may be compromised. Who is going to protect the ongoing investment in faculty and staff to guarantee that the quality of teaching and learning is maintained?

I encourage all independent school educators to read this terrific post.