A Unique Classification Framework for For-Profit Institutions Helps Bring Clarity to the Differences Within the Sector
Published May 13, 2014
Washington, D.C., June 29, 2012—Classifying postsecondary institutions for descriptive and comparative purposes has a long history. Unfortunately, most attempts to classify for-profit institutions focus only on institutional characteristics that are useful for understanding the public and private not-for-profit sectors but do not adequately capture the diversity of for-profit institutions. Now there is a new offering of a “classification framework”—specifically for for-profits that uses different lenses to describe the institutions and their students—that is being introduced today through a report released by the Institute for Higher Education Policy (IHEP) entitled, A New Classification Scheme for For-Profit Institutions.
To truly understand the sector and differentiate it among other institutions, a classification scheme that focuses on for-profits must include criteria that are different than those used in existing schemes that moves beyond institutional characteristics to look at contextual factors. The IHEP report therefore describes a three-level classification framework based on the following criteria: (1) Market-Level Dimension: Measures the growth of for-profit institutions in selected educational markets; (2) Institutional-Level Dimension: Captures the institutional orientation, or niche, of for-profits; and (3) Individual-Level Dimension: Focuses on the enrollment behavior of students attending for-profits. The dimensions can be combined to categorize both institutions and students into peer groups for more effective analysis. As a call-to-action for future research, this classification system attempts to offer a framework within which outcomes, policy interventions, and/or program supports can be better targeted.
A Closer Look at the Classification Framework for For-profit Institutions
- The for-profit sector comprises 43 percent of all postsecondary institutions and serves nearly 10 percent of undergraduates;
- For-profits are different from other sectors in many ways; they are more likely to be non-degree granting (62 percent), they are concentrated in metropolitan areas (86 percent), and their students tend to be older, female, and first-generation college students;
- Nearly one-third of metropolitan areas have experienced above average growth in the for-profit sector;
- Seventy (70) percent of students who ever attended a for-profit stay only in the for-profit sector; the remainder have attended other types of institutions; and
- Slightly more than a third of for-profits are specialized institutions with only full-time students, largely focused on relatively few degree or certificate programs.
“Our report, A New Classification Scheme for For-Profit Institutions, presents a new way of thinking about the entire for-profit sector and the students these institutions serve," said IHEP President Michelle Asha Cooper, Ph.D. "With the for-profit sector being the fastest growing sector in higher education, it is critically important that everyone has an accurate framework to compare these institutions—among themselves as well as with all nonprofit institutions—particularly as it relates to a variety of postsecondary outcomes such as quality, affordability, and competition.”
Support for A New Classification Scheme for For-Profit Institutions was provided by USA Funds, a nonprofit corporation that works to enhance postsecondary education preparedness, access, and success by providing and supporting financial and other valued services.
For more information or to download a free copy of A New Classification Scheme for For-Profit Institutions, visit IHEP’s Web site at www.ihep.org.
