The new competition for college: traditional academia's new competitors are for-profit, virtual and corporate universities. Can state schools keep up?

• Author: Liberman, Ellen

Five years ago, Martin Boyle, a newly minted bachelor of science, had no immediate plans to pursue an advanced degree. Graduation at age 42 had been a matter of personal pride. Despite a successful career managing corporate security for UPS, Boyle had never before earned more than a high school diploma. For 23 years, he slogged through his undergraduate courses. When he left UPS to start his own personal protection business, Boyle finally had the time to finish up.

But one evening, about a month after he graduated from Nyack College, a telemarketer made an offer Boyle couldn't refuse: He could earn his MBA through the University of Phoenix's distance-education program. The Arizona-based institution--one of the nation's oldest and most successful for-profit universities--offered a master's tailored to his lifestyle, as close and as portable as his laptop computer.

"We had a great conversation," Boyle said. "He said, 'We'll open the doors if you want to walk through them." I thought about what he said and decided that he was right. I'm glad I did."

Today, Boyle has an MBA and is working on a doctorate in organizational leadership. He spends his days in New York City, guarding super models. By 11 p.m., Boyle is online at his Long Valley, N.J. home, discussing post-industrial theory with classmates scattered from Moscow to Mattapan.

"It's the perfect learning environment for the busy professional," he says.

But as much as Martin Boyle loves the University of Phoenix, some academic leaders in his home state do not. In 1998, they protested the university's proposal to build a campus in Roseland, N.J. Phoenix eventually withdrew its request. But in July, it returned with a new application to open a campus in Jersey City. The New Jersey Commission on Higher Education is reviewing the proposal.

Welcome to the brave new world of higher education, where the degree is a product, the student is a consumer and institutions scrap for market share in state government hearing rooms. Traditional academia's new competitors are for-profit, virtual and corporate universities, and information technology certification programs. In the last decade, their numbers have exploded. Educational entrepreneurs have seen opportunities in higher education's lack of innovation and responsiveness to society's changing needs. Technology has made it easier for them to fill the vacuum.

With their monopoly gone, traditional colleges and universities have turned to policymakers for help. In some states, academic leaders are asking for protection. In others, they have sought more autonomy to meet the competition head-on. Regardless, this new race for the tuition dollar has forced state lawmakers to redefine their relationship with higher education. No longer content to simply fund state schools, lawmakers are confronting the complicated task of making higher education more entrepreneurial, more accessible and more accountable to its students and taxpayers. The results of these first attempts range from controversial new laws to, at the very least, political debates that span the spectrum.

New York Assemblyman Edward C. Sullivan, chairman of the Higher Education Committee, doesn't see much need for legislative tinkering.

"The Legislature's job is to get the funding," he says. "There's a general conservative trend in this country to watch the so-called bottom line. But there is such a thing as a public interest beyond the market interest. The purpose of a college is not to make money. They were originally set up by religious institutions to educate people."

As the assistant majority leader and vice chair of the Education Committee, Colorado Representative Keith King believes it's time to "force market realities on higher education."

"How can you argue that the institution exists but for the benefit of the students?" he asks. "Higher education needs to get out of the 20th century and into the 21st."

THE NEW COMPETITORS

Higher education has always considered itself competitive. Institutions have long vied for students, research money, athletic trophies and prestige. But geography and government regulations mitigated the effect of market forces, say researchers at the Futures Project, a higher education think tank based at Brown University in Providence, R.I. Competition for students heated up in the 1990s. Public universities created honors colleges and offered tuition discounts to lure the top students, as well as developing lucrative continuing education programs. At the same time, an array of new...