For-profit Colleges: An Outdated Business Model Part II

After Corinthian Colleges closure, it was recently reported that another for-profit organization has to deal with an unfavorable situation because of declining student enrollment.  It does not need an Albert Einstein’s brain to analyze what will happen with this type of business model.  On August 30th, 2014 AAEA has published partial analyses on the future outlook of for-profit U.S. colleges.  Consumers are rational.  When their utility function is declining or becoming negative then they surely will discontinue to acquire the services or good.  This is a simple explanation to this seemingly difficult issue facing by the policy makers in this country.