For-profit Education

For-profit education (also known as the education services industry or proprietary education) refers to educational institutions operated by private, profit-seeking businesses.

There are three types of for-profit schools. One type is known as an educational management organization, or EMO, and these are primary and secondary educational institutions. EMOs work with school districts or charter schools, using public funds to finance operations. The majority of for-profit schools in the K-12 sector in America function as EMOs, and have grown in number in the mid 2000s. The other major category of for-profit schools are post-secondary institutions which operate as businesses, receiving fees from each student they enroll. A third type of for-profit schools, which is less prevalent in the U.S., are K-12 schools which operate as businesses.

EMOs function differently from charter schools created in order to carry out a particular teaching pedagogy; most charter schools are mission-oriented, while EMOs and other for-profit institutions are market-oriented. While supporters argue that the profit motive encourages efficiency, this arrangement has also drawn controversy and criticism. Kevin Carey, director of the education policy program of the New American Foundation said in a 2010 column in The Chronicle of Higher Education that "For-profits exist in large part to fix educational market failures left by traditional institutions, and they profit by serving students that public and private nonprofit institutions too often ignore." He also noted that "There's no doubt that the worst for-profits are ruthlessly exploiting the commodified college degree. But they didn't commodify it in the first place." In addition, many employers regard many for-profit schools as legalized diploma mills and many deny degrees from such institutions.