Discussion of Olson & Phillips “For-Profit and Not-for-Profit Universities:

A Comparative Analysis”

Cameron M. WeberPhD Student in Economics and Historical Studies, New School for Social Research

Adjunct Professor, Tobin School, SJU

Discussion of Olson & Phillips

Is the objective of the paper clearly stated? YesIs the literature review focused on the objective of the paper? YesIs the methodology used reasonable and well explained? Yes (with comments to follow)Is the data sufficient for the analysis performed? YesIs the interpretation of the data reasonable? Yes (with comments to follow)

Discussion of Olson & Phillips

Main critiques of method and interpretation1) Federal funding attached to individual students not to specific

FPs, whereas NFP R&D funding attached to the university.2) Unclear as to where public universities fit within classification

schema (they are not FPs nor NFPs (?) ).3) Analysis omits accounting for NFP tax-breaks and taxes paid

by FPs.4) Larger issue on question of college degrees as leading to

competitiveness (vocational v. “liberal arts”).

Discussion of Olson & Phillips

http://www.motherjones.com/contributor/2011/09/student-debt-chartsSources: College Board; Mark Kantrowitz, Fastweb.com

Debt Levels Tuition

Discussion of Olson & Phillips

Olson & Phillips DiscussionDaphne Kenyon & Adam Langley. 2011. The Property Tax Exemption for Nonprofits and Revenue Implications for Cities. http://www.urban.org/UploadedPDF/412460-Property-Tax-Exemption-Nonprofits.pdf

http://observer.com/2006/05/nyu-columbia-make-a-mint-on-real-estate/

Harvy Lipman. 2006. The Value of a Tax Break. Chronicle of Philanthropy. 11/23/2006, Vol. 19 Issue 4

Molly F. Sherlock and Jane G. Gravelle. 2009. An overview of the nonprofit and charitable sector. Washington, DC: Congressional Research Service.

Olson & Phillips Discussion

Kenyon & Langley 2011 cite work that property tax foregone due to the Not-for-Profit exemption is between 4 and 8% of all property taxes, or, around $17 to $32 billion (for USA 2009). Sherlock and Gravelle 2009 find that 21% of NFP assets are owned by Higher Education. Thus “back-of-envelope” is that Higher Education NFPs receive between $3.5 and $6.5 billion in tax forgiveness.

Olson & Phillips DiscussionNote default rates increase for all classes

http://www.huffingtonpost.com/2012/12/27/for-profit-colleges-student-loan-default_n_2371688.html

Olson & Phillips DiscussionQuestion on practicality of research question:Might not FPs and NFPs be two separate,

incomparable markets?NFPs are for traditional, younger students,

whereasFPs fill more vocational niche for older working

students seeking weekend, online, and nearby-located classes with part-time instructors engaged in same line of work?