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GATS and Higher Education



While for much of the last century, higher education was considered a public good and an essential agent of democratization, upward mobility and equal opportunity, today it is considered by many to be a lucrative business − indeed, the core business of the "new" service economy. The past two decades in the United States have been marked by a sharp decrease in public funding for public educational institutions as well as a steep increase in the number of older students seeking specialized educational training to advance their careers or help them start new careers. These trends have accompanied the U.S. federal government’s shift away from funding institutions and towards funding students, allowing students to take their grants or guaranteed student loan money to many different educational providers rather than rely on lower-cost public universities and technical schools. The result has been a significant increase in for-profit higher education providers. These institutions compete with public sector providers and generate their revenues largely from public student loan programs and student debt.

Concurrently, new information technology makes it possible to unbundle educational activities and thus reconfigure the educational landscape to advance the interest of for-profit providers. For instance, the growth of "distance learning" is being facilitated both by established educational institutions – the majority of U.S. colleges and universities offer some type of distance-learning programs – and large corporations. The latter includes: global media conglomerates and publishing firms, such as Australia’s News Corporation or London-based publishing giant Pearsons Publishing, Inc.; technology related firms such as “eCollege” or the Carlyle Group’s "Blackboard" firm, which specialize in Internet infrastructure to enable distance learning; as well as education corporations, such as Laureate Education, Inc. (formerly Sylvan Learning Systems), Career Education Corporation and the Apollo Group, which owns the University of Phoenix system − the largest accredited for-profit university and distance-learning operation in the United States.

Given these trends, it is hardly surprising that many see global "trade in educational services," "transnational" or "borderless" education, as a lucrative business opportunity. While it is currently estimated to be a $40-50 billion industry, the potential for increased profitability in a "global market" of higher educational services is significant. For-profit providers and investors see the World Trade Organization (WTO) as an essential tool to dismantle what they consider to be "barriers to trade" in educational services and maximize their profit-making opportunities on a global scale.

For the most part, traditional higher education institutions and educators have been unaware that this march is afoot at the WTO and have been dangerously disengaged. They must weigh in on these matters before global trade rules are finalized and their profession is transformed from a "public good" to a "global services market."

    » trade | subfederal | services | education

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