For-Profit College Marketing

All you rising high school seniors have no doubt been considering your college application options over the summer. Ever since you took the PSAT, you’ve probably been bombarded with email and slick glossy brochures from colleges vying for your attention (and application fees).

Ah, the wonderful world of marketing. If you ever watched the multi-award-winning AMC network show Mad Men, and listened to Don Draper’s approach to advertising, you may have become familiar with some of the tricks of the marketing trade that target and try to get into your brain. What’s all that about and can it be successful?

Well, think about other things that you have “consumed,” as a consumer. How about music? Have you ever purchased a CD or bought an mp3 download because of a particularly appealing jewel box picture or online image? Now, think of all those fancy mailings colleges have sent you. What do you see?

I’ll bet that you have never seen a rundown college building or a tiny, uncomfortable dorm room in one of those brochures. There is nothing but green lawns, perfectly manicured, a lovely pond, reflecting the white puffy clouds in a blindingly blue sky. The students pictured represent a broad swath of diversity, with young men and women from almost every conceivable cultural demographic. Dazzling buildings designed by famous architects tower over smiling students on a perfectly sunny day …

don draper happiness

Getting the picture? You must be because this is no doubt what you’ve already seen numerous times, either online or coming out of your mailbox. Yep, it’s called marketing. The slicker the better. High-priced advertising agencies (think Mad Men and Don Draper) put their best people on making mediocre (or even lousy) schools look impressive and highly appealing.

However, is there a downside to all this pretentious puffery? Backlash, anyone?

Yes, there is. The worst of it concerns the uncertain world of for-profit colleges.

If you’re like me, that is, cynical about many aspects of the higher education industry (yes, I call it an industry), you may think that all institutions of higher learning are based on making a profit. Technically, they’re “non-profit,” a term which to me indicates that they lose money every year. Most don’t.

More accurately, they are considered “not for profit,” a weasel-word way of saying, “Hey, we don’t try to make a profit but sometimes we do [wink, wink].” So, for clarification, let’s define 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 (EMO), which 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 United States, are K–12 schools which operate as businesses …

Now, back to marketing backlash.

In researching for this post, I found an interesting article from last summer in The Washington Post. Slick for-profit college marketing is starting to backfire tells the story of how for-profit colleges are being accused of misleading students.

lecture hall

Thus, if among the piles (and even phone calls and emails) full of marketing initiatives you’ve received over the past year(s) you find anything from one of these educational profit centers, you might care to investigate further if you’re considering one or more of them as your higher education option.

Here are some key insights from Danielle Douglas-Gabriel’s Post article:

With endless TV commercials, radio ads, mailings and billboards, the country’s largest for-profit universities have made themselves household names. But the marketing often doesn’t end there.

Schools have been known to bombard people with calls, drive by their homes or even try to recruit them in the hospital. They promise flexible schedules, affordable classes and job placement, but often fail to deliver. And Washington has had enough.

Federal regulators and lawmakers are cracking down on for-profit colleges for what they say are misleading and aggressive recruitment practices. Investigations are mounting, and efforts are under way to cut off access to federal dollars for advertising, a move that could deal a blow to an industry already in turmoil. …

… A 2012 Senate investigation found that 15 of the largest for-profit colleges received 86 percent of their revenue from federal student aid programs, and spent 23 percent of their budgets, $3.7 billion dollars, on some form of recruitment. By comparison, nonprofit colleges spent less than a percent of their revenue on marketing, according to the investigation. …

… “Compared to the ratio of athletic spending to academic spending at division 1 colleges, [for-profit] institutions spend very little on marketing,” he said. “For every dollar spent on academics [for-profits] spend about 50 cents on marketing, while other institutions spend far more. The median football bowl subdivision school spends $6.70 on athletics for every dollar spent on academics.” …

… Government agencies have grown wary of for-profit colleges’ pursuit of veterans and their families. Military service members receive federal education funding that has become a stable source of revenue for many of the schools. And that money is exempt from a key federal rule that governs the way for-profit colleges are funded. As a result, lawmakers and consumer advocates say for-profit colleges aggressively recruit members of the military. …

… the Apollo Education Group revealed that its subsidiary the University of Phoenix is being investigated by the Federal Trade Commission for deceptive advertising and marketing. The school is the largest recipient of federal student aid for veterans, taking in nearly $1.2 billion in GI Bill benefits since 2009. Apollo said in a public filing that regulators are asking for information about the school’s military recruitment, enrollment and student retention, among other things. …

… Government lawsuits, regulatory scrutiny and depressed student enrollment have kneecapped some big names in the sector. Education Management Corp. is closing 15 Art Institute campuses, while Career Education Corp. said it would shut down all 14 of its Sanford-Brown schools. Meanwhile, ITT Education Services, its chief executive, Kevin Modany, and chief financial officer, Daniel Fitzpatrick, are all being sued by the Securities and Exchange Commission for fraud.

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Yikes.

Granted, older students are a prime target for these for-profits, especially military veterans. You may be an older individual, rather than a high school senior, seeking post-secondary education, perhaps in a specialized field such as art or technology.

don draper love

If so, be careful of what you believe from the marketing materials that come your way. Many high school seniors choose to eschew the classical four-year-degree approach and look for vocational-related educational resources. This is where they encounter the sometimes problematic world of for-profits.

Just for fun, in a demented sort of way, I searched for “worst for-profit colleges” and found a list headlined America’s Worst Colleges, Did yours make the list? Granted, I did not take the time to research the evaluation criteria that produced this list. My only point in presenting it here is so you can get a feel for the kinds of companies that may have their eye on you as a prospective student (a.k.a. buyer). So, let the buyer beware.

Speaking of marketing, do you pay attention to marketing slogans? Maybe you should.

I searched for “great marketing slogans” and found a list, many of which I’ve heard. The one that rings true in relation to my post today is Capital One’s “What’s in your wallet?”

The reason I call out that one is because if you fall victim to some unscrupulous for-profit marketing you may come up with a response to Capital One’s query:

Capital One: What’s in your wallet?

You: Not much, anymore.

Be careful out there.

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