More Consumer Protections Would Hold For-Profit Colleges Accountable

Report: “Perils in the Provision of Trust Goods: Consumer Protection and the Public Interest in Higher Education”

Author: Robert M. Shireman, executive director of California Competes

Organization: Center for American Progress

Summary: Frequent investor pressures prompt for-profit colleges to compromise student and public needs in order to maximize profits. And while all colleges seek revenue, nonprofit institutions are overseen by boards without an ownership interest. In such nonprofit organizations, there are no owners who can sell stock for personal gain, eliminating incentives to take advantage of customers. While the primary purpose of nonprofit status is to eliminate the potential hazards of investor-owners, the report argues, for-profit colleges’ rejection of so-called nondistribution constraint explains their generally worse outcomes. <Read more.>

Via Chronicle Staff, The Chronicle of Higher Education.