The Independent Market Observer

Higher Education Surrenders to the Enemy

Posted by Brad McMillan, CFA, CAIA, MAI

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This entry was posted on Jul 21, 2014 2:28:22 PM

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Higher EducationMy wife and I have been incredibly fortunate over the past three years to have our son, Jackson, enrolled in a Tufts University-sponsored day care/kindergarten program. The faculty, the curriculum, and the entire experience have been outstanding, and Jackson has benefited noticeably. Tufts students also benefit from the opportunity to volunteer and mentor the children.

The program is offered to Tufts faculty, staff, and those in the greater community, many of whom (like us) rely on it. It’s been around in various forms for about 60 years, with most of the highly qualified staff staying for years and decades.

No more. Tufts announced last week that Bright Horizons, a publicly held corporation, will take over management of the center as of September 1, 2014. Both parents and staff were blindsided by the news. Parents now have just six weeks to decide what to do next. Many staff members will lose benefits (like Tufts tuition) they’ve been counting on for years.

You could argue that this was simply a business decision, that Bright Horizons is a reasonable alternative to the current program. As a businessman, I get that, and might even agree if I knew all the financial details. Nonetheless, the implications of the decision are troubling.

When universities become businesses

Let’s think about what happened here. A major university apparently decided that early education isn’t a priority, opting to outsource it to a corporate provider. Even more startling, Tufts told parents that it believes the Bright Horizons transition will actually be good for the children.

In other words, Tufts is saying that a corporate entity can offer equal or better education than a university-sponsored program.

This is a remarkable admission. If a well-funded program with an extremely competent staff can’t provide the best early education in a university setting, what advantage would the university have at any level? To me, the next question is whether Tufts believes that a corporate education provider—like, say, the University of Phoenix—can offer a comparable or superior college education.

We tend to think of universities as stakeholder-friendly institutions, free to devote themselves to the needs of students, faculty, and staff in ways that business cannot. In making this decision (especially in the secretive way it did so), Tufts has acted as a business, putting concern for the bottom line above the good of the community. It may, in fact, be a smart business move—if that’s what the university has now become.

What happens when educators sell out?

I am reminded of the Japanese takeover of the American car industry, when the U.S. companies let the Japanese in because they didn’t care about the low end of the market. Two decades later, of course, Toyota and others had moved upmarket as consumers got used to them—and ate the U.S. companies’ lunch.

Knowing that Tufts and others believe corporate education for younger children is just fine, parents and students may well question why they should pay more for noncorporate education later in their lives. Hopefully, they would consider the benefits of a traditional private or state-sponsored institution. Based on current trends, however, those benefits may already have been sacrificed to the bottom line.

Tufts has met the enemy, and it decided to join them.

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