RALEIGH — It may come as a surprise, but the University of North Carolina system is not just a group of educational institutions, it is also a licensing agency. It determines whether nonpublic schools, including for-profit schools, may operate in the state.
Last month, several officials complained that UNC is licensing colleges that compete directly with UNC schools. At a committee meeting of the UNC Board of Governors, a technical report about the process ignited an emotional discussion.
James Anderson, chancellor of Fayetteville State University, said that his university is “getting killed” by competition from for-profits. Charles Nelms, chancellor of North Carolina Central University, said that there is “no way we can compete” with their marketing power. A member of the committee expressed chagrin that the state has allowed a private, for-profit law school (Charlotte Law School) to be established, and another said that if the for-profits can’t get their graduation rates up, the state should “jerk their license.”
Thus, the discussion had two major themes: One was that the for-profits are taking away business from UNC schools; the other, that some of them are not providing a quality education. The Board of Governors formed a committee to review the state’s licensure of those institutions.
North Carolina has been licensing post-secondary schools since 1923, presumably to make sure that they are providing a quality education. When the university system was consolidated in 1972, the system was given the responsibility for licensing private post-secondary schools, and it has been doing so ever since. Currently, 26 nonpublic schools are licensed in the state. Fourteen are for-profit colleges; 12 are non-profit.
UNC does not license all “nonpublic” schools — Duke or Wake Forest, for example, were not. All colleges operating in North Carolina in 1972 were “grandfathered in” when UNC took over the job. In addition, strictly religious schools are exempt from licensure, as are schools that operate solely on military property.
For-profit schools were the focus of the complaints. Nationally, they have been inundated by controversy in recent months. While they have expanded the market for higher education to underserved populations, especially working adults, they have drawn a lot of fire, especially from officials at more established schools.
Some critics think that the very fact that a school seeks profit taints it. But more specific criticisms have emerged. Congress’ Government Accountability Office found unethical recruitment tactics and misrepresentation at 16 for-profit schools—and U.S. Sen. Thomas Harkin, D-Iowa, harangued the industry in highly publicized hearings. Other critics point to the schools’ heavy reliance on federal funds.
Given the prevailing attitudes about for-profits, the animus against them at the UNC Board of Governors committee meeting is not surprising. Fayetteville State’s Anderson said his school is losing potential students to for-profits, which advertise constantly on the airwaves — while Fayetteville State has had to cut its marketing budget.
He explained that for-profit schools are recruiting the same nontraditional students who attend historically black colleges and universities and UNC-Pembroke. He also said that many of these potential students are “not sophisticated enough to look at programs and compare.” They may end up paying “three times the cost” of public university tuition. And the for-profits’ graduation rates for students of color are “miserable.”
The discussion, while heated, was brief. Two possible directions emerged. One would be the imposition of tough restrictions on these schools. But there is already some evidence that UNC’s scrutiny has been strict: North Carolina has only 26 licensed post-secondary schools, compared with an average of 64 among seven other southeastern states. (Florida has 133; South Carolina has 26, the same as North Carolina.)
The other idea is that the schools in the UNC system should compete more vigorously. Which direction the Board of Governors takes will be determined in the months ahead.
Jane S. Shaw is president of the John W. Pope Center for Higher Education Policy (popecenter.org).