Are Career Colleges Causing Universities to Become Obsolete?
December 19th, 2008
With unemployment on the rise and workers finding themselves facing the prospect of layoffs, many Utahans are turning to education to see them through the economic uncertainties.
by Rebecca Edwards
Enrollments at nine major publicly traded college companies have grown faster than average for the past three years, according to The Chronicle of Higher Education, and profit margins for the current year are projected to be the highest they've been since 2005. Locally, schools like Eagle Gate College and Neumont University are experiencing jumps in their enrollment and profits as well.
"We are finding that this year might be our largest enrollment year to date," Stacy Hughes, Communication Manager for Neumont University, said. "While I won't say that it's 100 percent because of the economy, I will say that right now people are interested in education that will pay off in a career."
Neumont University (www.neumont.edu) was founded in 2002 to "pioneer a more effective way of learning and a better way of educating people for technology related careers, especially software development." Neumont specializes in computer science education, and offers associate, bachelors and masters degrees. While Neumont is a for-profit university, they don't consider themselves a career college. Their particular brand of education fits better as a hybrid of sorts between the career college model and the traditional university.
"We do have more of a professional focus, but we also have strict admission standards, our graduates will receive a bachelor's degree, and we have the full complement of general education studies," Hughes said. She also cited their successful career services offerings as another element that sets them apart. The personalized career guidance and help that is offered to their students is similar to that offered at most career colleges, but well beyond what a larger, public school is able to offer.
Eagle Gate College (www.eaglegatecollege.edu) is a locally owned and operated school, offering diploma programs, associate degrees, and bachelor's degrees -- both residentially and online. Eagle Gate was founded in 1979, and has three locations across the Wasatch Front. They, too, are reaping the benefits of a difficult economy,
"2008 has been a very strong enrollment year for us," Dr. Larry Banks, Vice President of Academics for Eagle Gate College, said. "When the economy takes a downturn, and people are out of work, our industry sees an increase in the number of people looking to be re-trained in a different career."
Banks reports that Eagle Gate is seeing a 20% jump in total enrollment year-to-date. He feels that they are at an advantage because even their more advanced degree programs still focus on marketable skills that are in demand from local employers. Both Hughes and Banks agree that the personalized graduate placement services that they are able to provide their students make a huge impact when someone is shopping for a school.
"We have the luxury of being able to invest time to cultivate strong partnerships with the employers of our graduates," Banks said. "Our curriculum is constantly evolving to meet the immediate demands and changes of the marketplace."
Many of the negative trends impacting the economy -- state budget cuts, widespread layoffs, and a projected unemployment rate of 10 percent -- may mean for-profit institutions will see even greater growth as laid-off workers return to school to gain new job skills.
The for-profit career college industry is focused on skill and competency-based education that emphasizes hands-on experience and real-world skills that prepare students for immediate entry into the workforce. While this approach to education has always had its critics, the growth of these institutions and the success of their graduates can be hard to ignore.
While numerous public colleges have halted construction and are undergoing hiring freezes and other cutbacks due to the declining economy, career colleges are seeing higher enrollment numbers and higher profit margins ("Economic Downturn Is a Boon for For- Profit Colleges," The Chronicle of Higher Education, Dec. 10, 2008).
"One thing we are finding is that in spite of the economy our graduates are as in-demand as ever," Hughes said. "Their starting salaries remain in the $60,000 range. While the demand for people with Computer Science degrees is increasing, enrollment in Computer Science programs in public schools is decreasing. We are answering the demand of our industry partners, and our success is appealing to students." Hughes shared that most Neumont graduates have multiple job offers prior to graduation. They work on placing their graduates in technology positions throughout the nation.
There are those who believe that such a strong focus on specific skills produces a more one-dimensional graduate than does traditional university education that focuses on a broader academic experience that includes more theory and philosophy than practical experience.
According to published enrollment numbers, the University of Utah has seen a slight decline of approximately 400 students in total enrollment since 2006. While this is not a huge number, it does indicate that the educational market in Utah is following the same trends as the rest of the country. However, initial reports from both BYU and the University of Utah indicate that each school expects similar enrollment to previous years as application deadlines for next year approach.
In a letter to administration, staff, and faculty, Michael K. Young, University of Utah President, said, "These are challenging economic times. Downturns in global and national markets are reflected in a similarly struggling state economy. Diminished state tax revenues, in turn, affect the state's ability to provide adequate funding for all state services, including higher education, and budget cuts are the painful consequence.
"Despite these cuts in state funding, the University of Utah will continue to move forward. Fortunately, we remain on a sound, if diminished, financial footing which I believe will enable us to come through these challenging times well-positioned to emerge strongly competitive when better times return."
Young continued to explain that no plans are currently in the works to make cuts that will affect tenured faculty, to cut departments or colleges, or to impose a general hiring freeze. While the state legislature imposed a 4 percent base cut in funds to all Utah higher education institutions in November, the University remains cautious as they move forward with the knowledge that further cuts will likely be imposed in coming terms.
Hughes shared her perspective on why for-profit education is becoming a stronger choice in the current economic climate. "Our students are mostly young adults who didn't find a good fit after high school," she said. "Maybe they tried a big university and felt lost, and then just joined the workforce. With the economic downturn, a lot of those young adults are realizing that more and more jobs on all levels are going to people with degrees. They are thinking, 'I'm in a dead-end job' and they need to invest in education."
A puzzling piece of the for-profit boom is the fact that tuition at these institutions tends to be much higher than tuition at public universities. Tuition at Neumont University runs around $28,800 per year, but students are able to obtain their bachelors degree in only two-and-a-half years, compared to four or five years at a traditional school. Similarly, tuition at more standard career colleges, like Eagle Gate, is typically higher per credit hour than at SLCC or the U of U. However, students are able to tap into educational opportunities not available at most public schools and many programs can be completed in one year or less.
"Students aren't balking at the tuition," Hughes said. "Comparatively across the nation, our tuition isn't that much higher, and when you factor in that you can have your degree in 2.5 years, students see that the return on their investment will come quickly."
Eagle Gate College, which in addition to seeing an increase in enrollments for 2008, also boasts an 89% placement rate for their graduates. Career colleges are held to strict standards of performance for graduate placement, requiring schools to closely follow graduates throughout their first year after completion and to verify employment information reported to the school.
Occupational outlooks as reported by the US Department of Labor, Bureau of Labor Statistics show strong, sustainable growth trends for many of the training programs commonly offered only at career colleges. Training for occupations such as medical assistant, home health aide, massage therapist, and pharmacy technician show some of the best job growth in both the US and Utah. The appeal of these types of programs is the quick turnaround from student to working professional.
"We have programs in place that prepare people to enter the top-growing health care industries in the country," Banks said. "These are careers that offer the assurance of longevity and stability throughout hard economic times." One such program is their newly added Health Care Technology program that prepares students for work as patient care technicians, certified nursing assistants, occupational therapy assistants, and home health care aides. Banks said they have carefully researched and selected educational programs that will offer long-term career benefits to their students and graduates.
While the American workforce holds its breath to see how the economic climate will continue to evolve, one thing seems certain: the for-profit segment of the educational community is filling a need at this uncertain time.
