The number of proprietary postsecondary institutions has nearly doubled in the last twenty years, their revenues are expanding, and a disproportionate share of their students enjoys public federal aid (Strosnider, K., January 23, 1998, The Chronicle of Higher Education). The rapid expansion of the for-profit postsecondary sector, including major national institutions such as the University of Phoenix and DeVry, gave rise to a growing fear that community colleges would loose ground by failing to respond to new market needs.

For example, a lead article in the Community College Journal several ago, "The Realities of Competition: Will Our Students Become Theirs?” (Zeiss, T., 1998), warned:

If we [community colleges] don't meet the needs and expectations of students, the for-profit colleges and training organizations certainly will; indeed they already have the jump on us. Yes, there is competition for community colleges, and it's spelled with a capital "P" for proprietary colleges.

Concrete and systematic information about private two-year colleges is scarce, leaving policymakers with little foundation upon which to respond to the growth in enrollment and use of public student-aid funds. Questions about the relative quality of private postsecondary schools, about the core values and the mission of public colleges to prepare students with broad knowledge rather than narrow technical skills, and about the quality of instruction and student outcomes have remained unanswered.

To develop a better understanding of how proprietary and public two-year colleges compare with respect to their students and programs, the National Center for Postsecondary Improvement (NCPI) joined with the Community College Research Center to pursue an exploratory study of the relative competitive and complementary roles of these institutions. The research, which is led by Professor Thomas Bailey and Norena Badway, Director of the Community College Cooperative, is based on analysis of available data and case studies of a for-profit private school chain and community colleges that operate in the same markets. The study asks the following key questions:

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What is the size of the for-profit sector among two-year colleges?

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How have public two-year colleges been influenced by the rise of local proprietary competitors, and how have they reacted?

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How do the academic and technical programs offered in the two types of educational setting compare?

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Are there differences in student outcomes, including persistence, graduation and placement or continued education following graduation?

Findings suggest that the for-profit sector still accounts for a very small share (less than 5 percent of the enrollment) of two-year institutions. Moreover, this share did not grow during the middle years of the 1990s. On the other hand, there has been significant growth of for-profit four-year institutions, although they still account for less than 10 percent of enrollments in four-year colleges. Perhaps the most interesting conclusion from the data analysis is that the for-profit four-year institutions actually confer more Associate than Bachelor's degrees. Therefore, to the extent that the for-profits are competing with the community colleges, that competition is coming from institutions that grant both AAs and BAs.

For-profits have formulated their practices around the concept that students prefer an accelerated and flexible schedule because they want to get on with their lives as quickly as possible. Faculty commitment and expertise at for-profit colleges are similar to those at public colleges. One important difference is that the for-profits have less political pressure to expand their missions and therefore are much more focused on a smaller number of high-demand degrees.