HBCUs vs. FPCUs in the Great Recession

A. Context

This blog continues the discussion begun in a previous blog, "HBCUs in the Great Recession" -- a pessimistic glance at the the negative impact of the Great Recession on the future of the colleges and universities that have provided African Americans with their the most significant opportunities for higher education in times past, i.e., the HBCUs.

It presents some recent data about the positive impact of the Great Recession on the future of the colleges and universities that -- if HBCUs maintain their self-limiting focus on traditional programs -- are likely to provide most African Americans with their most significant opportunities for higher education in the future. I speak, of course, of the FPCUs -- the for-profit colleges and universities.

The vast majority of HBCU programs are still directed at traditional college age students who attend face-to-face classes on weekdays. (See the limited offerings listed in the Gateway's Directory of HBCU Programs for Non-traditional Students.)

By contrast, the vast majority of the programs offered by FPCUs focus on non-traditional students, i.e., older students who must attend classes on evenings and weekends or via distance learning because of their jobs and/or family obligations. Such programs are usually called "adult education" or "continuing education."


B. Substantial African American Enrollments in FPCUs

The reader needs to be aware that a substantial and increasing percentage of the students enrolled in the the nation's leading for-profit colleges are African Americans. The Digital Learning Lab called attention to this trend in a report posted on the Gateway to HBCUs three years ago: Strategic Partnerships (2006).

Back in 2005, when the DLL's staff first assembled the enrollment data for business majors and for information systems majors, two of the most important baccalaureate and masters degrees in today's job market, I used to confound my colleagues by projecting the enrollment tables on a screen while covering up the column that contained the names of the colleges and Universities. Then I would ask them to pick out the HBCUs .. and they would invariably include Strayer, DeVry, and Phoenix. ... :-)

The DLL's Strategic Partnerships report concluded that "a number of for-profit institutions have taken on roles traditionally associated with HBCUs as the producers of disproportionately large percentages of African-American graduates." In other words, FPCUs were eating into what should be part of the core market for HBCUs. Given the fact that continuing education, especially programs involving involving distance learning and/or blended learning, is the fastest growing segment of today's higher education market, the HBCU community has voluntarily excluded itself from its strongest potential growth opportunity.


C. FPCUs in the Great Recession

Whereas most HBCUs have been struggling during the the current massive economic downturn, how did the FPCUs perform? The following table, published in the online edition of the Chronicle of Higher Education on Tuesday 26 August 2009, says it all:

How Enrollment Has Boomed at For-Profit Colleges

	Enrollment, 2009	Enrollment, 2008	Percent Increase
American Public U. System	53,600	35,900	49%
Apollo Group	420,700	345,300	22%
Bridgepoint Education	45,504	22,607	101%
Capella Education	29,281	23,733	23%
Career Education Corp.	93,100	83,300	12%
Corinthian Colleges	86,088	69,211	24%
DeVry	90,365	74,765	21%
Education Management Corp.	112,700	91,600	23%
ITT Educational Services	69,127	54,793	26%
Kaplan Higher Education	103,300	78,700	31%
Strayer U.	46,038	37,733	22%
Note: All data are for quarter ending June 30, except Apollo Group, whose quarter ends May 31. Some numbers are rounded.

While their performance wasn't quite as spectacular as Goldman Sachs or JP Morgan Chase, the FPCUs listed in this table did very, very well. The Chronicle reported that they not only increased their enrollments by the impressive percentages shown in the table, they also increased their tuition revenues and bottom-line profits by comparable margins. In other words, there's lots of money to be made in continuing education -- even during a record-breaking recession.


D. The Digital Divide As A Surmountable Barrier to Opportunity
There are undoubtedly many reasons why the leading FPCUs were so successful, but one is especially relevant to HBCUs:

• All of the leading FPCUs make intensive use of information technology (IT) in their administrative operations, in their advisory functions, and in their course delivery systems.

Therefore HBCUs that remain entrenched on the wrong side of the Digital Divide will not become successful participants in the flourishing continuing education market. At this point, information technology is cheap enough to be affordable by most HBCUs. Hence crossing the Divide comes down to hiring competent IT staffs.

Information technology does not configure itself itself. No matter how close it is to the current state-of-the-art, cost-effective IT is always about people. Unfortunately, this obvious "insight" seems to have been missed by the senior administrators of too many HBCUs. Unwilling to hire first-rate (albeit relatively expensive) IT professionals, they try to muddle through with mediocre to inferior, a strategy doomed to costly failure and maddening paradox. A highly talented younger colleague of mine once observed: "The best computer in the world is the one you already have, but aren't using to its full capacity"

• It takes first-rate IT talent to specify and maintain the most cost-effective administrative and academic IT systems. Such talent needs to be hired, retained, prized, and paid competitive salaries.

• And then there are the IT users: the faculty and administrative staffs. No matter how "user friendly" the information technology, most people need training and retraining -- preferably by competent IT staff -- to become productive IT users.

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Related notes:

• HBCUs in the Great Recession

The HBCU Community as a National Laboratory for U.S. Higher Education

This blog refines a proposal that was introduced in an earlier blog -- "Why are HBCUs Still Needed? -- Part II"

A. Context

Although continued support for HBCUs is usually justified by references to their historic success in educating African Americans, nowadays eighty percent of African American students attend non-HBCUs. This suggests that their historic justification is a fading argument that may cause us to overlook the potential contributions that HBCUs could make tomorrow, not just to the African American students at HBCUs, but to African American students at non-HBCUs and to all students in the U.S. higher education system -- regardless of their race.

Two of the most important challenges facing HBCUs today also face the non-HBCUs -- fewer male students enroll and they drop out at higher rates than females; and female students enroll in STEM programs (science, technology, engineering, and mathematics) at lower rates than males.

• The "bad news" is that fewer African American males enroll and they also drop out faster than Caucasian and Asian American males; and the proportion of African American females entering STEM programs is lower than for Caucasian and Asian American females. (Note that the performance of African American students is comparable to that of Latino and Native American students.)
  
  None of this should surprise anyone who is aware of the relative differences in social and economic capital available to most African American, Latino, Native American, Asian American, and Caucasian students because students who have access to more social and economic resources should be expected to be more successful in coping with the challenges of academic life.

• The "good news" is that solutions that work for HBCUs may also work for non-HBCUs having substantial African American enrollments, for other minorities at non-HBCUs, and possibly even for the socially and economically more advantaged Asian American and Caucasion students facing similar challenges. In other words, non-HBCUs should pay close attention to the successes and failures of HBCUs because they might learn useful things that could help them provide more productive educational experiences for their own students -- regardless of race.

B. HBCUs as a National Lab

An ideal collection of colleges and universities that would serve as a national laboratory for higher education would be a random sample that controlled for race.

• Most HBCUs are still predominantly Black, so one can assume that race and prejudice have minimal impact on their operations. (At least 93 of the 104 HBCUs have Black/non-Hispanic enrollments greater than 50 percent; this data is not available for five HBCUs.)
  
• Although not a random sample, the community of HBCUs is diverse enough for exploratory studies designed to generate insightful hypotheses about education policies and practices. The findings from these exploratory studies could then be proven or disproven by systematic trials conducted at rigorously sampled colleges and universities elsewhere in the U.S. higher education system.

The extraordinary diversity of the HBCU community bears elaboration:

• Location -- 22 states, districts, and territories
• Types -- 88 four year, 13 two year, and 3 specialized graduate training
• Public/Private 4 year -- 40 public, 48 private
• Public/Private 2 year -- 11 public, 2 private
• Enrollments -- smallest = 100 , largest = 9900 students
• Scope -- wide range of programs ranging from vocational training, associates, and bachelors degrees through professional, masters, and Ph.Ds degrees to multimillion dollar NSF/NIH/NASA funded research initiatives

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Related notes:

• Why are HBCUs Still Needed -- Part I
• Why are HBCUs Still Needed -- Part II
• Why are HBCUs Still Needed -- Part III
• A Black Student is a Black Student is a Black Student

HBCUs in the Great Recession

Like many of readers of this blog, I have spent a lot of time trying to gauge the impact of the Great Recession on the HBCU community:

• Although the well-connected bankers at Goldman Sachs and JP Morgan Chase are earning record profits thanks to the generous assistance they received from the Federal government, and although the Chairman of the Federal Reserve Board recently conjectured that the economy would begin to recover by the end of this year, some of the nation's more astute economists have issued strong warnings that the unemployment rate will reach at least 10 percent before it declines. They have also reminded us that unemployment is a lagging indicator of economic recovery because businesses will tend to extend the working hours of their remaining employees before they rehire old employees or hire new employees.
  

• The unemployment rate for African Americans has usually been at least twice as high as the national rate. If anything, the Great Recession has pushed African American unemployment even higher. And as the "last hired, last-rehired", African Americans will be harder pressed to keep up with their children's college tuition payments.
  
  
• It should also be noted that the recession has drastically reduced the funds available from all sources of financial aid -- except the Federal government.
  

When the recession suddenly deepened last Fall, these considerations led me to anticipate that HBCUs would be hit harder than non-HBCUs because they enrolled a higher percentage of Black students:

• Private HBCUs would suffer enrollment declines as Black students dropped out or transferred to public colleges and universities having substantially lower tuition. This loss of tuition revenue would push some (many? most? all?) of them into a financial crisis. And the longer high unemployment lasted within the African American community, the greater the likelihood that some private HBCUs would have to close their doors permanently.
  
  
• Public HBCUs might enjoy enrollment increases because of their lower tuition, but their increased tuition revenue might be offset by substantial reductions in their budgets imposed by the governors of their hard pressed states. Furthermore, the longer high unemployment lasted, the greater the existential threat from increased political pressures to merge some public HBCUs with public non-HBCUs or to shut them down entirely. This would come as part of their governor's efforts to reduce size of their state's higher education systems to levels that could be sustained by reduced tax revenues.

Unfortunately, by the beginning of this year some of my pessimistic predictions had already come true. In February, I posted a page on the Gateway (http://www.dll.org/hbcus/Announcements/Recession.asp) containing links to the Web sites of some prominent public and private HBCUs whose senior administrators had courageously acknowledged that they were facing severe financial challenges. And in recent months I have also posted links to announcements from public HBCUs that their Fall 2009 enrollments were at record levels.

Note: this discussion is continued in "HBCUs vs. FPCUs in the Great Recession"