Only the Smart Survive

The number of private, for-profit colleges and program offerings is growing fast in Alberta. There’s just one problem: the number of prospective students is not. How the players are positioning themselves to withstand an expected industry shake-out

Dec 1, 2006  

by Suzanne Wilton

While private colleges in the United States are often restricted to the elite – think Harvard, Princeton, Yale and other Ivy-league schools – for-profit institutions in Alberta, and Canada for that matter, have battled the perception that a private, post-secondary education is for those who don’t have what it takes to get into a publicly funded university or college.

But that’s now changing with institutions offering of quality programs and as the employment market demands more specialized, skilled workers to fill jobs that typical university graduates either are not trained for or don’t want.

The Calgary-based think-tank Canada West Foundation reports that the demand at technical and trade institutes is set to outpace universities and colleges in the coming decades, turning around the decline in previous market share.

“The public demand for trades, technical training, and vocational programs will increase at a faster rate than will the demand for traditional university degrees,” the foundation states in a recent report. “There will be an increase from the corporate and business community in funding and designing programs, creating a custom crop of graduates from which to recruit.” DeVry Technical Institute, one of the first profit-oriented institutions to set up in Alberta 25 years ago,

offers one example of the growing partnership between private colleges and the business community. The American-headquartered company has partnered with UPS Canada to train and educate potential workers in an agreement that both secures future students for the college and workers for the global logistics company.

“This is a challenging environment to recruit students,” says Lund.

The combination of a strong economy and a shortage of employees is driving up wages in jobs that don’t require skilled workers. These days, flipping burgers pays as much, if not more, as jobs requiring special training such as those in the health-care field that aren’t exactly glamorous but are increasingly important to an aging population.

“That is a function of this overheated economy,” says DeVry’s Lund. “Our challenge is to respond to that. To help with this problem we have to have more innovative partnerships.”

The UPS partnership benefits students by providing them with a part-time job and subsidies to fund their studies – which can run as much as 40% more than that at public post-secondary institution – and allows the company to retain workers for at least a three-year period. For DeVry, it’s a new way to recruit students.

“That long-term view is important because these labour environments are quite cyclical,” says Lund. “We’re in a very strong period but eventually that economy will cool off a bit and some of those young people will look at going back to school.”

DeVry is one of the rare private entities that has managed to gain credibility within an academic community that has traditionall­y looked down upon the quality of education offered by for-profit post-secondaries. After years of jumping through government and academic hoops, it is now accredited to offer degrees that carry the same clout as those granted by public universities.

Though it doesn’t receive taxpayer dollars, DeVry is succeeding financially when institutions such as the University of Calgary are finding themselves strapped for cash despite receiving millions of dollars in funding from the province. Parent company DeVry University, which trades on the New York Stock Exchange, saw its fourth-quarter revenues rise more than 10%, to $216 million US compared with $196 million for the same quarter a year ago.

The business of education has indeed become an industry unto itself. Public institutions are recognizing that and they, too, are increasingly functioning as private companies, expanding operations with privately raised dollars and offering programs that cater to the needs of students and the practical application of knowledge.

A University of Calgary spokesman says increased competition from the private sector, however, isn’t the driving force. “For us the issue isn’t whether private or public post-secondaries are the better choice. Really, that choice is up to the student,” says Roman Cooney, University of Calgary’s vice-president, external relations.

“The issue that concerns us is the lack of access to post-secondary education and whether that is causing students to seek alternatives elsewhere. And the access problem is extremely acute,” Cooney adds.

“We know there are thousands of students who get turned away from post-secondary institutions across Alberta and there are numbers that back up that this province has one of the lowest post-secondary participation rates in the country,” she says.
Whether public or private, success depends on whether the programs offered meet the needs of students, who are like any other discriminating consumer looking for the best bang for their buck. For Robertson College, that means carving out a niche that meets market demands and offering a product that’s competitive and of high quality.

“I think there’s enough for everybody. Competition is good. That’s what private industry is all about. It makes us look ahead, and look at better ways of doing what we’re already doing,” says MacMinn, Robertson College’s director.

When Robertson’s owner left behind life as a public school teacher and stepped into the uncertain world of entrepreneurship, he naively thought he could compete against the larger, traditional public universities. Penner has become more pragmatic since then.

“We can’t do it. It’s not who we are. We are who we are – but we plan to be here for a long time to come.”

Current Issue