More colleges and universities outsource services to for-profit companies
Public and nonprofit colleges and universities have long outsourced such things as bookstores and dining and custodial services. Now they’re paying tens of billions of dollars a year to for-profit corporations to create and operate online courses, recruit and enroll students, advise and tutor those students once they start school, oversee research, manage information technology and utilities and build or manage dorms, classrooms, labs, parking and student unions that were previously all handled in house.
Outsourcing has speeded up during the pandemic. Some 300 new deals are believed to have been reached between universities and for-profit online program managers, a 79 percent increase over last year.
Some of these functions are outside the institutions’ educational missions, advocates of such partnerships point out, though what’s new is that “more and more are cutting closer to the academic core,” said Dennis Gephardt, vice president and senior credit officer on the higher education and not-for-profit team at the Moody’s bond-rating agency.
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