Education as a business

Education has played a central role in shaping the abilities and attitudes of owners, managers, workers, and consumers. It also has become a major business, encompassing private schools at all levels, technical and trade institutes, and producers of educational supplies and books.

Education is a search for ways in which society can both benefit from as well as limit the variety of individual experience. Accordingly, American attitudes toward education have always been ambivalent. In America as a Civilization (1957), cultural historian Max Lerner made the following comment:

While most Americans value education as the road to “know-how” and business advance, they suspect it when carried into political action or expressed in social attitudes.

The early impetus to education in the United States derived from the practical needs of what was still a predominantly rural, agricultural society. The need for applied knowledge in areas such as agriculture was a central motivation in the establishment of land-grant institutions of higher learning in the nineteenth century, despite the earlier view that education ruined people for agricultural work. However, education was perceived as essential in producing the informed and intelligent voters democracy requires, the key to promoting social mobility, and a way for the country to assert its status among other nations.

Spiritual needs also encouraged educational development. Founded by immigrants who espoused a variety of religious viewpoints, the United States established a long tradition of valuing religious freedom. Many educational institutions in the United States began with religious missions, and religious values (such as family, patriotism, and professional ethics) for a long time provided a counterweight to strictly economic considerations. The proper relationship between private, especially religious, education and public education has been the subject of continuing debate. During the course of the twentieth century, the United States completed its transformation from a rural to an urban, and from an explicitly religious to a nominally secular society.

After World War II

The history of American education since World War II has been one of ever-greater federal concern over and involvement in local educational practice. The war brought home the importance of science and technology in national defense and made the ongoing development of expertise in those areas a national priority. In addition, the postwar G.I. Bill encouraged veterans to go back to school, building up the middle class and transforming American higher education in the process. A massive infusion of federal dollars into education during the 1940s effectively created the research university. As corporate-sponsored work came in later years to supplement or supplant government-funded research, universities gradually learned to recoup some of the profits of their breakthroughs by technology-transfer partnerships and other forms of participation in commercialization.

During the 1950s, educational policy became entangled with the debate about racial discrimination, as the U.S. Supreme Court in Brown v. Board of Education (1954) forsook its longtime contentment with the separate-but-equal provisions of Plessy v. Ferguson (1896). The slow implementation of the new requirements resulted in controversies over busing and, in some parts of the country, white students flocking to private rather than public schools. Residentially based mechanisms for educational support, such as property tax, were partially reformed, but real educational equality remained elusive. Debates about the merits of affirmative action programs proliferated, as immigration shifts and demographic patterns ensured that increased diversity would be sought in the worlds of both business and education. A controversial emphasis on multiculturalism drew on both concern about racial (and other) diversity and commitment to religious freedom.

At the same time, the emergence of the space race, subsequent to the launch of the Soviet satellite Sputnik in 1957, resulted in a frantic effort to beef up American education, especially in science and math. However, in the ensuing decade, increased governmental support of education was colored by student activism growing out of the Civil Rights movement and the anti-Vietnam War movement, new demands for educational relevance, and a series of student rebellions on college campuses during the late 1960s. The end of the Vietnam War and the subsequent abolition of the military draft seemed largely to quell middle-class student protest. The later 1970s and the 1980s saw the transformation of radical yippies (members of the Youth International Party) into ambitious yuppies (conservative young urban professionals), as social discontent came to be viewed by advertisers as merely another market segment (exemplified by Nike’s controversial use in 1987 of the Beatles’ song “Revolution” as a jingle in a commercial for athletic shoes).

In 1983, the U.S. Department of Education’s report A Nation at Risk renewed the critique of American educational practices and called for a return to fundamentals. Conservative pundits were soon arguing that the 1960s radicals had taken over the educational establishment, substituting social engineering and political correctness for teaching the skills required in the modern workplace. In 1992, the U.S. Department of Labor produced the Secretary’s Commission on Achieving Necessary Skills (SCANS) report, which sought to promote workforce development by aligning American secondary education with anticipated business needs for the coming century. In 2001, the No Child Left Behind Act gave schools across the country the mandate to develop and meet specific measures of educational outcomes. Whether these initiatives helped or hindered educational progress has not been definitively determined, though No Child Left Behind in particular has been highly criticized for putting too much emphasis on standardized testing.

During the 1990s and after, the effects of computerization came to be felt in both business and education. Computers began to be used by both school administrators and students. Computers could be used to write papers, perform complex statistical and mathematical functions, and to do research. Computer and technology savvy students and college administrators communicated through e-mail and cell phones. In addition, efficient communications, effective process control at a distance, and cheap transportation combined to free both business and educational activities from their traditional limitation to particular localities. This led to distance learning, from online courses at colleges and universities to online learning at the elementary level.

Education as a Business

The twentieth century saw much criticism of the influence of business practices and corporations on schools, colleges, and universities. The increasing emphasis on business models and methods in education after 1900 has been associated with the declining influence of classical (Greek and Roman) content, as well as with the increasing emergence of practical or technical courses of instruction. William H. Maxwell, superintendent of the New York City schools, complained in 1913 that manufacturers were no longer using the apprenticeship method of training workers and were finding it difficult to find skilled workers. Instead, he said, manufacturers were asking the public school system to assume the task of training workers.

Under the pressure of business and political concerns, educators have often learned to see their own activities in managerial terms. They were, some suggest, thereby capitulating to the sway of money. However, as many people have come to view education as primarily about increasing their earning power rather than enhancing personal discovery, social engagement, or civic responsibility, it is no surprise that business models of efficiency and effectiveness play an increasing role in education. Proponents view this change in education, like the similar transformation in medicine, as welcome and long overdue. To its supporters, the business model in education has not only been the harbinger of greater economic efficiency but also has led the way to greater concern with the actual needs of students, who, perhaps increasingly, do not fit traditional models and are instead working students, first-generation college students, and students from underrepresented populations. Critics charge that any such benefits come at a high cost, as the business model imposes its standards on what ought to be understood in terms of other, noneconomic values.

Some enthusiasts for the business model, however, believe that it alone can save educators from themselves by imposing discipline and returning power to the consumer. This is often associated with an argument that anything run by the government must go awry. Critics may concede this, while still insisting that private enterprise is also subject to distorting factors. Because this is one of the fundamental debates about the role of business in American society—and people often change their view depending on whether the latest scandal involves bureaucratic inefficiency or contractor fraud—the question of education’s role in a business society that is also a democracy will not be settled soon.

For-Profit Colleges

While business models can be applied to any form of education, perhaps the most blatant form of education as a business is the for-profit college or university. Throughout the history of the United States, higher education has traditionally been provided by non-profit entities, whether public universities or private colleges. While some specialty forms of education, such as culinary arts, have long operated on a for-profit basis, it was not until the second half of the twentieth century that for-profit businesses gained a notable foothold in the US higher education landscape. As in other cases of business models in education, the for-profit college system is held by advocates as a way to introduce competition and market efficiency. Proponents claim that benefits such as flexible schedules and focus on practical knowledge allow for-profit colleges to open higher education to nontraditional students. Major profit-seeking educational institutions that expanded throughout the country included Devry University, the University of Phoenix, and ITT Technical Institute.

Despite the rapid growth of for-profit colleges, the system has been extensively criticized, especially beginning in the 2010s. Criticisms leveled against such institutions by former students, government at state and federal levels, education advocates, and the mass media include reports of fraud, aggressive and misleading sales and recruitment methods, and other questionable business practices; exorbitantly high costs and student debt burdens; and, perhaps most importantly, poor educational outcomes. Many studies also showed that for-profit colleges exploit and worsen inequality by targeting lower-income students, many of whom are unable to afford the tuitions and fees and eventually drop out, leaving them in debt.

The administration of US president Barack Obama, along with state governments, cracked down on institutional fraud in the 2010s, and the number of for-profit colleges and enrolled students declined sharply in the middle part of that decade. Federal investigations by the Government Accountability Office, Consumer Financial Protection Bureau, and other agencies uncovered widespread fraud, including falsified financial aid applications intended to direct more federal money as profit to the schools. Several prominent lawsuits were filed against for-profit education organizations, and attempts were made to strictly regulate the industry. However, with the election of businessman Donald Trump to the presidency in 2016, new Secretary of Education Betsy DeVos assumed a more favorable position toward for-profit colleges, loosening regulations. Trump himself was the namesake and founder of a for-profit college, Trump University, which was investigated for illegal business practices after shutting down, resulting in multiple lawsuits eventually settled for $25 million.

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