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Jewish World Review Dec. 14, 1998 /25 Kislev, 5759
Thomas Sowell
The "non-profit" halo
YOU MAY NEVER HAVE HEARD of the University of Phoenix, but it has more
students than Harvard, Yale or Notre Dame ---- combined.
There is a reason you probably have not heard of the University of Phoenix.
It represents a new development in higher education and one that the
establishment does not welcome.
The vast majority of colleges and universities are non-profit
organizations, but the University of Phoenix is not. To some people,
non-profit organizations have a sort of halo around them. It is another
example of the power of mere words that the fact that one organization's
income is called "profit" and another's income is not makes such a huge
difference to so many people, including the government, which treats
non-profit organizations differently.
Officials of non-profit organizations are not volunteers donating their
time. The average university president has a six-figure salary and many also
get free use of a big, expensive house. There are three university
presidents whose annual salaries and benefits exceed half a million dollars
a year each. In addition, it is not uncommon for top professors in medical
schools to earn even more than their university presidents, while college
athletic coaches often have the highest incomes of all.
Nevertheless, it is considered shocking in genteel academia that the
University of Phoenix is legally set up as an organization that is out to
make a buck, even though most of us get our food, our shelter and our
medical care from such organizations. Indeed, those of us who were not born
rich and who don't want to live on welfare are out there every working day
trying to make a buck.
Ironically, the real reason for the opposition to the University of Phoenix
is precisely because it would threaten the money coming in to conventional,
non-profit colleges and universities. As a new institution, Phoenix does not
have to do all the costly things that conventional academic institutions
have been doing for many generations, so it can charge lower tuition.
For example, it does not have the expenses of a huge campus, a football
stadium and dormitories. Its students are largely adults scattered all
around the country, who communicate with the university on the Internet. The
University of Phoenix also does not have to have the huge and costly
libraries that most universities have because it provides electronic access
to more than 3,000 journals, while the need for books is not nearly as
great, because this university specializes primarily in business courses,
and so does not need to cover everything from astronomy to zoology.
What an economist might call greater efficiency is depicted by conventional
colleges and universities as "unfair competition." Unfortunately, the
various licensing and accrediting agencies have requirements which reflect
the situation of liberal arts colleges and universities catering to a
younger clientele, studying a wider variety of subjects.
Worse yet, political pressures from the existing educational establishment
add to the hurdles facing any fundamentally new academic institutions that
do not take on the costly ways of operating that the old ones use, including
tenure for professors and adolescent activities and lifestyles for the
students.
I have no idea what the quality of education is at the University of
Phoenix -- and it is none of my business. It is the business of the
university's 53,000 students and whatever new students it may get wherever
it is allowed to compete with conventional non-profit colleges and
universities. It is the business of employers who are thinking of hiring
University of Phoenix graduates and it is the business of postgraduate
institutions who need to judge their qualifications for admissions.
Much of the enormous costliness and irresponsible self-indulgence of the
academic world comes from the fact that it has neither accountability nor
competition. It has little or no incentive to do things efficiently and
every incentive to appease every campus constituency by giving them their
own turf, at the expense of the taxpayers, donors and tuition-paying
parents.
Accountability is so remote in academia that conventional colleges and
universities need all the competition they can get. The academic
establishment's fear and resentment of the University of Phoenix is a sign
of how much some real competition is needed. But such competition may be
stifled by arcane laws that serve to protect the academic
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