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Higher Education Providers challenge Universities

Private higher education threatens publicly funded higher education—simply because it’s superior in many ways. Though we will be the first to admit it—at first glance—is a pricier ticket to success. As we will discover, however, many programs to assist private university students more than make up for that factor.

The best example of private higher education’s stellar success comes from the United States, where their thriving private university sector traces its origins to long before the United States was an independent nation. Harvard was the first, established in the mid-1600s, followed by William and Mary, then Yale at the turn of the following century.

At this time there are only three private universities in Australia. There are also two private foreign-based universities. Of the remaining 38 public universities, 29 of them have begun to specialise in certain areas, such as research or technology, following the lead of private universities in the United States.

These groups include:

  • The Group of Eight, some of which are the oldest and most prestigious in the country.
  • The Australian Technology Network, which grew from the former Institutes of Technology in the late 1980s – early 1990s.
  • The Innovative Research Universities, established in the 1960s and 1970s.
  • The Regional Universities Network, which is also as the name implies, but does include campuses in the Australian capital cities and some that are international.
  • The NUW Alliance, a group of three universities in New South Wales that are also research intensive, which joined with the mission of finding smart solutions to the state of NSW’s biggest challenges.

Yet as public universities, they still face many of the same challenges as do public institutions in the U.S., where private education is more common. Those challenges include government controls that hold back progress, funding that depends on taxpayers, overcrowded classrooms, and a lack of individualised instruction.

By way of comparison, South Africa is on the threshold of allowing more private universities to open their doors. Higher Education Minister Blade Nzimande, however, is trying to put the brakes on their public system being overrun by them, saying that private universities pose a serious threat to the public education sector. “Allowing them into the mix would result in an increase in the cost of higher education‚ academics being poached from the public sector as well as the loss of the financial contribution of wealthy students to the public higher education sector.”

But then again, is it a threat to public higher education per se, or is it rather a superior form of education that threatens the status quo?

The areas that demonstrate private education’s superiority cover a lot of territory: economic and financial considerations, quality, access, socio-political, and the potential for upward mobility. We will take a look at both the advantages and disadvantages of both types of higher education in each of these areas.

Registering as a Higher Education Provider or University

Public Higher Education’s Cost to Taxpayers

Most of us are already paying toward the cost of public universities through our taxes. However, especially in the U.S., many people don’t use those schools, and so are not all benefiting from this investment of their tax dollars. In other words, those who can afford to attend (or send their children to) a private university are spending money on top of what they are already forced to give to the public ones in taxes. This means that their participation in the funding of public schools is guaranteed, at least at the pre-tuition level.

The lifeblood of any public institution is government funding. That funding depends on a headcount. Thus, every student that opts to attend a private university causes fewer tax dollars to flow into the coffers of the public institutions in that government’s jurisdiction.

When government funding falls short at the university level, the public ones have no choice but to raise the more moderate tuition fees their students are already grappling with, though they do get some alumni donations to help offset that. Private schools can charge what they want, however, and those students’ families are either going to pay it or send them somewhere else.

In the United States, the average cost for undergraduate tuition and room and board at a public school was $19,640 at an in-state public school, according to 2016-2017 data from the National Center for Education Statistics, compared to $45,370 at private not-for-profit universities.

‘For Profit’ and ‘Not For Profit’ Higher Education Providers

In the US, the word ‘not-for-profit’ brings up an important distinction within the category of private universities.

A for-profit university is owned and run by a private organisation or corporation, which includes the well-known University of Phoenix that operates from numerous locations. In Australia, those groups that are registered as private higher education institutions are diverse and varied. You can find a list of private higher education providers  in Australia by clicking here.

These schools spend a lot of students’ tuition fees on marketing and recruiting. A for-profit university’s primary objective is to make money, since they must answer to their stockholders. They usually do not own the buildings they operate out of.

For that reason, we could also distinguish not-for-profit private universities. A school of this type spends students’ tuition on the education process itself. Funds received from students pay professors and instructors, provide extracurricular activities, fund research, and maintain the campus buildings and grounds.

Scholarships and Private Higher Education

In the U.S., nearly 300 private universities—including some of the most prestigious schools in the country—offer a prepaid-tuition version (in the form of “Tuition Certificates”) of the 529 College Savings Plan, in which parents can pay universities directly for a future education at today’s tuition rates with tax-free money. These certificates only cover tuition and mandatory fees, but are also interchangeable at any of the participating institutions.

The original 529 Plan was created for parents to be able to save money for their children’s higher education and associated costs (it’s considered a parental asset), and then individual states began offering a prepaid-tuition version for public universities. The problem with this version of the plan, however, is that it depends on state legislators keeping their promises and the continued funding of a state’s educational system at current levels or higher.

These three versions of the plan all sound good in principle, but in practice, the private universities’ Tuition Certificates appear to offer the best and safest value. Since they can be used at any participating university, a student could theoretically attend a lower-cost school for the first two years and then transfer to a more prestigious one in which to receive their diploma. That’s a huge advantage in today’s competitive employment market.

Also, money can be transferred between children in the same family. And, if for whatever reason it’s not used for your child’s college expenses, it can be withdrawn at (+/-) a 2% annual return.

Higher Education Providers and Universities Drive Innovation (Just Not In Australia)

Private universities can be more responsive than their public counterparts about being innovative and contemporary. Many of them offer customised programs that help students succeed in post-university life, with more flexibility than many of those offered by public universities. For example, two prestigious private universities in the US — Harvard and Stanford — have special post-graduate programs to help accelerate their former students’ careers.

Stanford LEAD Program

First is Stanford’s LEAD (Learn. Engage. Accelerate. Disrupt.) corporate innovation certificate, from their Graduate School of Business’s Executive Education division, which is a year-long, online program for professionals that is focused on real-world business challenges. The students in this program (and the other one below) are already in the workforce when they enter the program, thereby allowing them to immediately apply what they learn. Other benefits of this certificate course include:

  • Acquire business tools and techniques
  • Collaborate and innovate with a small, select group of your contemporaries
  • Earn 24 continuing education credits*
  • Build an international network of highly motivated peers

*Continuing education has become a hallmark of most professional careers, with dynamic changes coming and needing to be adapted to so quickly that the skill-set learned in school must be constantly supplemented, especially with continuously evolving computer-aided technology.

Again, though these perks may indeed pose a threat to public institutions, they provide untold advantages to students who opt for private universities.

Harvard Professional Development Program

Then there’s Harvard Extension School’s Professional Development Program, which, through interactive lectures and discussions, teaches how to use creativity to promote inspiration and collaboration in an organisation. There are several different programs on a variety of topics, such as:

  • Collaborative Leadership: Building the Organisation of the Future
  • Creative Thinking: Innovative Solutions to Complex Challenges
  • Design Thinking Workshop
  • Entrepreneurial Skills: Evaluating New Business Ideas
  • Growth Strategies: Identifying Opportunities in Market Trends
  • Innovation and Strategy
  • Leading Through Digital Disruption
  • Strategies for Leading Successful Change Initiatives

Higher-Quality, More Personalised Education at Higher Education Providers

In a private university, class sizes (and therefore student-professor ratios) are usually much smaller as well, resulting in more individualised attention. They are not in the position of having to ‘separate the wheat from the chaff’ because they are not being overrun by the masses like public colleges, who generally have less-selective entrance requirements.

With this lower ratio, private schools are in a position to benefit from cultivating each student’s potential. They can assist struggling students to ensure their success. With higher tuition and other fees, these schools can also better attract higher-profile professors with higher pay and more prestigious research facilities.

Higher Education Providers improve Accessibility

The huge endowments many of these schools have can level the ‘playing field’ for middle-class students in many cases. Despite average tuition rates that are more than double those for public institutions, private universities usually have a greater amount of financial aid available to their students.

By making their schools more affordable, they can better attract some of the best minds whose families don’t have as much money. These students’ success, in turn, attracts even more of the world’s finest minds.

Also, tuition at a private university is the same for all students, with no out-of-state rates to deter those who live farther away from attending.

Better Access to Higher Education for Students

At Yale, for example, the school will meet up to 100 percent of all students’ demonstrated financial need (not to mention merit-based and other scholarships); in 2016, this helped result in 85% of the university’s seniors graduating debt-free — a significant achievement.

This is a very important, yet little-known aspect of applying for even the most prestigious of private universities; that is, that you don’t have to be rich to attend them. Since community involvement and participation in extracurricular activities (not just sports) have increasingly become as much a factor as grades and standardised test scores, many underprivileged students have a good chance at earning a spot in the freshman class at a prestigious private university.

For example, a student’s achievements in a high school band become one avenue that can earn a free four-year ride for a university education at a private school.

Well-rounded students who will enrich a school’s campus life are what admissions offices seek now more than ever before. This is because, it is now known that traits like resilience and determination are a better indication of success, both in higher education and in the career world, than traditional factors like high grades.

This awareness in the sphere of higher education opens the door to a wider pool of students than those who fit within the box of high test scores and whose parents can afford the tuition. Those who have challenged themselves in science, athletics, political activism, and other areas during their pre-college years can be some of the most attractive candidates.

Superior Graduate Outcomes for Higher Education Providers

To keep that selective student base happy, these schools often have a particular academic focus — such as liberal arts, engineering, or computer science — even though they usually have a smaller range of possible majors overall.

This means they can provide a more concentrated learning experience for a serious student from the start. That makes for a more effective learning curve for focused students, as opposed to being lost in a sea of undeclared majors for the first two years at a public university.

Wherever they come from and from whatever background, they are all on equal footing when they arrive to prepare for their futures. But they can do so with a distinct purpose and path of intent, determined at an earlier stage, in a private university. This is an advantage that a public college just can’t match.

Higher Education Providers increase Social Mobility

Equally important are the social and political aspects of campus life, which can result in more socially aware graduates. The students at a smaller, private school become their own microcosm of society in which their individual benefits are valued.

As their mindsets develop in this realm, they will take on their responsibility to make their mark on the world, one that will create more benefits for all members of society.

With all students on equal footing in a private school, it greatly reduces elitism within the student population, no matter how privileged of a background they come from. In a private university, one’s hard work, personal development and academic performance are the chief indicators of prestige within the student body.

With this advantage, a private university education disrupts the social constraints that keep people confined to the status into which they were born. It allows them to have a degree that confers the same prestige on them as it does to their more wealthy peers.

Prestige Lends Itself to Upward Mobility

Recent news reports have shown that large donations received by wealthy private schools in the U.S. have increased by ten percent since 2016, so this trend is only getting stronger.

Even if a student doesn’t need more individualised attention, their parents are still enticed to send them to a private university for the benefits that can come from a gold-lined alumni network. With a tradition of doing for their own, the well-placed alumni of these schools can help their fellow graduates rise toward the top of the food chain. This positions private university graduates at a distinct advantage as they compete with public school graduates.

As a result, many of these private university graduates populate the ranks of the movers and shakers of the business and research world as innovators and entrepreneurs.

Quality and Standards in Higher Education

Without assistance and guidance from the government, there are private education groups that help develop and maintain standards of excellence in private universities, college-prep and grammar schools. One of the better known of such groups is the international Halladay Education Group, Inc. They advise private schools on all aspects of their operation, such as:

  • School start-ups
  • Buying and selling schools
  • Strategic planning
  • Board governance
  • Institutional assessments
  • Market feasibility study and business plan
  • Leadership searches and coaching
  • School operation and management

More Australian Students will Study at US Private Universities

By using visions of ivy-covered walls to lure a finite number of top students at the start of each academic year, private universities surge ahead of public ones by attracting the best scholars and the most dollars.

Competition is a vital part of learning, just as much as breaking into the job market in a chosen field and rising through its ranks. The competitive, yet nurturing atmosphere of a private university education continues to challenge students in a way that public universities cannot hope to achieve.

It is a shame, in our opinion, that Australian policy makers are so invested in monopolistic and protectionist systems.

Certainly, Australian and other international students will continue to seek out private universities in the United States.