There’s an old saying that the trouble with being the lead dog is that all the other dogs bite your behind. Apollo Group Inc., which owns for-profit higher-education industry leader University of Phoenix, has found itself chewed a bit this past year. Comcast.net Finance recently listed Apollo Group as one of the "Worst-Performing Companies of 2010." Among the inauspicious developments for the company include the following:

• Apollo’s stock value currently trades at $38 US a share, down some 41.6 percent from the year before;
• Recent regulation by the U.S. Department of Education in the form of the “gainful employment rule” has brought Apollo Group’s University of Phoenix and its competitors heaps of bad press;
• This regulatory scrutiny, along with much bad press, has forced Apollo to cut jobs (it has eliminated some 700 positions) and has dented its enrollment figures, which will drop by some 40 percent.

The Comcast.net Finance piece reports that “[f]or-profit college operators have launched a PR campaign to counter the government crackdown.” This comes as good news with respect to Apollo’s long-term prospects. Meanwhile, the battle for the hearts and minds of higher education consumers rages undiminished. An opinion piece appearing in the December 19, 2010 edition of The San Francisco Chronicle offers some sense of the criticism leveled at for-profit institutions. Authored by Kati Haycock, an executive for the Washington academic performance organization the Education Trust, the piece zeroes in on the for-profit universities’ public relations efforts. “Recognizing that their record profits stand in stark contrast to the low graduation and high loan default rates of their students,” Haycock writes, “for-profit colleges are spending millions on a marketing and lobbying campaign to buy themselves immunity from accountability in exchange for providing ‘choice’ to America’s underserved students.” High dropout rates translate into high profits, Haycock contends, as underserved students get lured into applying for loans that they have difficulty repaying -- especially should they fail to matriculate.

And even if they manage to, they find little in the way of guarantees that gainful employment awaits them. Haycock lists two facts that occasion her dismay with respect to for-profit higher education. They are:

1. For-profit universities manage to graduate only one-fifth of the full-time, bachelor’s-seeking students they admit for study;
2. Though students enrolled in for-profit institutions represent just 12 percent of university undergraduates, they represent 25 percent of federal aid recipients and 43 percent of student-loan defaulters.

If Haycock’s figures check out, then it would appear that for-profits have their PR-work cut out for them. It may be, however, that such numbers as for-profits have been putting up -- numbers suggestive of a vast transfer of wealth from public to private coffers -- simply represent the cost of doing higher-ed business in the twenty-first century. No less estimable a personage than David J. Skorton sees “expense” as an industry watchword, applying equally to public, private, and for-profit institutions. In a December 17, 2010 piece for The Huffington Post, Skorton writes that "higher education [is] one of America’s premier ‘products,’" and the high-dollar amounts attached to tuition simply reflects the fact that premier products come at a premium. “Post-secondary education is sought after around the world because it serves individuals and the larger society,” Skorton continues.

We can argue long and hard about “return on investment,” calculated as incremental personal income, compared to the net price of a baccalaureate or advanced degree, but in a recent survey by the American Council on Education, more than 89 percent of young alumni reported that their college experience had been worth it, and 85 percent reported that their education had prepared them, at least adequately, for their jobs. The increasing emphasis on higher education in China, India and other emerging economies is testimony to the near-universal agreement that success in this world, not to mention national competitiveness, requires more, not less, higher education. Thus, we as a country need to expand, not contract, the availability of higher education and increase public investment in colleges and universities.

Skorton’s remarks would appear to lend force to the contention made by for-profit institutions that, as Haycock puts it, they provide choice to America’s underserved students. As with some many items bought and sold, when consumers can’t afford the premier product, they’ll seek a budget equivalent. The fact that for-profits provide this latter option does indeed serve to increase the availability of higher education, which Skorton considers essential to the U.S.’s continued competitiveness and prosperity. Unfortunately, those underserved by traditional higher education are often also underprepared for the rigors attending it. It may just be that Apollo Group Inc. and its stockholders are coming to discover that high attrition rates are baked into the for-profit higher-education cake, and they’re seeing this reflected in the most unfortunate place -- the dividends the company has returned.