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For-profit institutions to be licensed by the state

Public universities fear competition

Public universities across the state are gearing up for competition from for-profit institutions.

The UNC-system Board of Governors has been charged by the N.C. General Assembly to license non-public education institutions, including for-profit schools.

The board recently approved licensing three new facilities, including Kaplan. Licensing allows the institutions to build and market in North Carolina.

“We are responsible for licensing all out-of-state for-profits that want a physical location in our state and we’ve had this responsibility for many years,” said Hannah Gage, chairwoman of the board, in an e-mail.

But the licensing of for-profits has sparked concern among smaller universities in the UNC system about losing students to the new learning centers.

Before the recent addition there were 26 institutions licensed in the state that operate a total of 60 sites in the state, said Frank Prochaska, associate vice president for academic affairs.

They offer 187 different degree programs, including associate, bachelor and master degrees, he said.

“These licensed institutions do offer many degree programs that are very much the same as UNC campuses,” Prochaska said. “There is certainly competition that way.”

But the majority of the degree programs are at the associate level, which does not compete with UNC-system schools. For-profit institutions also cater to non-traditional students, like working adults or part-time students, he said.

“In general, there’s really more of a competition between these for-profit institutions and community colleges,” Prochaska said.

But John Davis, a member of the educational planning committee on the board, said UNC-system schools are putting a strong emphasis on online education to compete with the for-profit institutions.

And there is more competition between for-profit institutions and smaller UNC-system schools, like Fayetteville State University, Gage said. About eight for-profit institutions already exist in the Fayetteville area.

“Their military market attracts a huge number of for-profits which compete for many of the same degrees FSU offers,” Gage said. “FSU, in our opinion, has better quality at a lower price, but the schools like Kaplan have huge marketing budgets, which we lack.”

James Anderson, chancellor of FSU, said for-profits’ tendency to locate in large cities and military bases has taken students away from FSU in particular.

“It doesn’t affect all schools equally,” he said.

And for-profits attract students who are looking to take courses online, a pathway FSU specializes in, Anderson said.

He said he has asked the board to increase his marketing budgets, as the cuts have negatively affected him more than other universities.

“I have less money for marketing but I have to compete against for-profits,” he said. “The marketing cuts should not have been the same for all schools.”

He said the board understands the difficulties the licensing of for-profits creates for universities like FSU.

“Under the current approval process, we have no option but to approve them if they meet the standards — even if there’s no real need for the degree,” Gage said.

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