The majority of for-profit colleges are small, but the largest and most notable bear familiar names: the University of Phoenix and ITT Technical Institute, to name two. Historically, for-profit colleges have been local, family-owned operations controlled privately, oftentimes by single proprietors. But in the 1990s, a new age of for-profit college expansion began: The Wall Street era. It is “marked by the new visibility of publicly owned corporate providers” and “defined by Wall Street institutions.” For-profit colleges do not simply participate in revenue-generating activities, as do all institutions of higher education. Instead, for-profit colleges are also defined by their profit-seeking imperative.
Randy Martin, an author and sociologist, has called America’s current socioeconomic culture one where daily life has been financialized. Rather than exchanging money for goods, increasingly consumers use credit and debt to construct their social lives and its accoutrements. At the macro level, markets have financialized mortgages (see: the 2009 housing crisis) and education spending (see: student loans). When talking about for-profit colleges, financialization refers to the period of time when for-profit credentialing organizations were transformed into what investors blithely call “favorable markets.” These markets are favorable to investors because the conditions that produced them are significant and predictable. I call this blithe because the conditions in question are systemic inequalities in access to good jobs and a social safety net as good jobs become fewer. To capitalize on these conditions, the for-profit college organizations relied on growth and acquisition strategies consistent with shareholder-business organizations. Those favorable markets are not naturally occurring phenomenon; they come from somewhere. And they are profitable for reasons that suggest the success of for-profit colleges in their current form is a barometer of deep, far-reaching inequalities.