Educa&on  For-­‐Profits  Don’t  Have  to  Suck  

John  Katzman  Founder  &  CEO  

Capitalism  has  produced  some  great  things.  

So  why  not  in  educa&on?  

For-­‐Profit  Schools  Under-­‐perform  •  For-­‐profit  universi&es  have  a  6-­‐year  gradua&on  rate  of  22%  (it’s  60%  at  non-­‐profits).    

•  K-­‐12  charter  schools  run  by  for-­‐profit  companies  are  20%  less  likely  than  those  run  by  non-­‐profits  to  meet  proficiency  standards.  

Financial  Goals  above  Academic  Goals  

•  Educa&onal  results  take  many  years  to  measure,  but  profits  and  bonuses  are  realized  immediately.  

•  For-­‐profits  can  respond  nimbly  to  changing  condi&ons  and  raise  the  capital  needed  to  scale.  

•  There  are  even  a  few  good  ones.  

How  can  we  balance  quality  and  financial  returns?  

•  Benefit  corpora&ons  (or  B  Corps)  are  businesses  that  promise  to  consider  more  than  just  shareholder  value  when  making  decisions.    

•  B  Corps  are  expected  to  act  in  the  public  interest.  

The  E  Corp  

•  What  if  we  applied  that  idea  to  educa&on  companies?  Let’s  call  it  the  E  Corp.  

•  An  educa&on  company  could  a\ain  E  Corp  status  by  becoming  transparent  about  its  values  and  outcomes.    

•  Colleges  owned  by  E  Corps  should  tell  every  prospec&ve  student  the  gradua&on  rate,  average  student  debt,  and  star&ng  salaries  of  similar  students.  

•  Students  would  sign  a  form  describing  their  instruc&onal,  marke&ng,  and  execu&ve  compensa&on  costs-­‐-­‐and  their  profits-­‐-­‐per  student.    

Leveraging  Federal  Dollars  

•  We  could  even  require  that  ins&tu&ons  elect  E  Corp  status  in  order  to  receive  federal  funds:  – Title  I  (K-­‐12)  – Title  IV  (higher  ed)  

How  many  students  would  choose  a  for-­‐profit  college  if  they  knew  the  

about  the  outcomes?