Document Details

Title A Tale of Two Sectors: why is Brazil’s for-profit higher education sector in the ascendant, while US for-profits stumble?
Author Richard Garrett - Director, OBHE


While a host of companies sell innumerable services to higher education institutions, and nonprofit universities are increasingly market-oriented, the genuine for-profit university remains rare. In many countries, legislative definitions of “university” exclude commercial entities, confining firms to sub-degree activity or a gray area between nonprofit and for-profit. At the same time, a growing number of governments have tweaked the rules to permit some measure of experimentation. The theory is that the profit motive might encourage the sort of higher education capacity that would complement the strengths of the conventional sector and compensate for its weaknesses. Serving nontraditional students, stemming the number of citizens leaving a country to study abroad, career-oriented programming, leveraging new technology and operational efficiency are the sorts of things governments have in mind.

Many such initiatives are small-scale and tentative, not least because the contribution of for-profit higher education is work-in-progress. Evidence for this is playing out in very different ways in the two countries with the world’s most developed for-profit higher education sectors- Brazil and the United States. In the US, the sector is in crisis. A major school chain- Corinthian Colleges- has been forced to close and a number of others either look vulnerable or are hastily divesting sickly assets. The largest US for-profit, University of Phoenix, enrolled over 450,000 students in 2010 but today is shadow of its former self with fewer than 220,000. By contrast, Brazil saw the merger of the two largest providers, Kroton and Anhanguera. The combined entity, under the Kroton brand, enrolls 1.1 million students and reported record profits.

What went wrong in the US, and which for-profit institutions continue to do well? Has the Brazilian sector learned the lessons of the US experience or will history repeat itself? In 2015, how should the for-profit higher education experiment be judged?

Date 22/05/2015
Region(s) Caribbean, Central & South America, North America
Countries Brazil, United States
Theme(s) For-profit Provision

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