The Private Option

Many are discussing the public option in health care as a way to keep the private insurance companies honest. But in education it’s the for-profit private colleges that are serving to keep the nonprofit institutions efficient and affordable.

College tuition is expensive. Many private undergraduate schools can cost about $200 thousand for a four-year degree. State Universities are cheaper, but even at half the price, that’s a lot of cash.

Which is why online schools like the University of Phoenix are so attractive. At a time when educational credentials are critical, you could get a Bachelor’s degree for less than $15 thousand dollars. This could be a lifeline when jobs are hard to find. For less than the price of a used car, you can get a degree.

For-profit online education is a business model that is here to stay. So the recent troubles of Apollo Group or ITT aren’t all that troubling. While individual schools may have issues with counselors behaving badly, traditional education simply can’t match the price of web-based learning.

Some residential schools are trying to compete on quality, offering online lectures, library services and homework. But the real competition is on price. If traditional schools don’t hold their costs down, they’ll be fishing from an ever-smaller pond.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-05T13:49:07+00:00 November 9th, 2009|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
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