Don’t Look Around, Get the For-Profits!

Yesterday, I brought you up to date on the under-the-radar advance of federal K-12 education control. But that’s not the only education sector under largely silent assault. Most people are also probably unaware of the siege of for-profit colleges and universities, a group loathed because, well, they dare to be honest about trying to make a profit, and they do it in an industry utterly dependent on federal cash.

The complaint – which you might have heard before – is that for-profit enrollment is growing very fast; the schools are more expensive than taxpayer-subsidized public institutions or non-profit private schools; and for-profit students often struggle to graduate and pay back their mainly federal student loans. This story on NPR’s Marketplace is somewhat representative of the coverage afforded these schools, with its focus on a former for-profit employee accusing one school – but by implication the whole sector – of deceiving students about their employment and earning prospects after they’ve completed the school’s pricey program. Here’s the pretty standard stuff:

Garnett knows a lot about the value of education. She worked as director of graduate placement at for-profit Allied College in St. Louis. It’s now called Anthem College. Here’s a clip from one of its promotional videos.

Allied College video: We can help you break into that career you’ve always dreamed of, and your future starts right now!

It was Garnett’s job to help students start those careers as pharmacy technicians or dental assistants.

Garnett: We sent resumes on their behalf, we called potential employers on their behalf, we called the graduates every week, sometimes every day, to say “have you followed up on this, have you talked to anyone, what have you been doing?”

All that effort paid off. Garnett says more than 70 percent of graduates found the kinds of jobs they went to school for. But she says a lot of those jobs paid just $8 to $10 an hour. And the students often took on a lot of debt.

Garnett: A lot of it would depend on what program the student was in, how hard they were willing to work, the effort that they were willing to put in. But just being honest, if you’re making $10 an hour and you have $15,000 in student loans, that would be pretty difficult to pay back, for anyone.

You get the picture: The for-profit school deceived students so it could rake in cash for it’s owners. Well it’s stories like this – as well as some truly alarming statistics about for-profit costs and graduation rates – that are driving a series of Capitol Hill floggings of proprietary schools, as well as a drive to tighten regulation of the schools:

The law says career training and vocational programs have to prepare students for quote “gainful employment in a recognized occupation.” Otherwise, the programs aren’t eligible for federal student aid. But until now, no one’s defined what gainful employment means. The Department of Education is drawing up new rules meant to protect students from taking on more debt than they can expect to pay off….

New regulations could force some programs to lower their tuition or even go out of business. But the gainful employment rule doesn’t apply to traditional four-year colleges or liberal arts programs….because career colleges and vocational programs exist to train people for jobs. There may be other reasons people go to Vassar or UCLA.

Clearly, the intent is to implement regulations that will have a disparate impact on for-profit schools. Sure, some people go to UCLA or Vassar to study, say, art history, but many go to study business, or engineering, or education, or something else with a job as a final goal.

Thankfully, Marketplace had the integrity to bring in a somewhat balancing voice, one that summarized what I argue in a much more detailed way in a new op-ed defending – sort of – for-profit higher ed. Quite simply, for-profits do have lots of problems, but so do publics and non-profit privates:

Sara Goldrick-Rab teaches education policy at the University of Wisconsin, Madison. She says nonprofit colleges and public universities deserve a closer look too. Plenty of students graduate from those schools with piles of debt and slim job prospects.

Sara Goldrick-Rab: The fact is that when you talk to students these days, no matter where they are, their main focus is on getting a job – and its on getting a good-paying job. And that’s what they tell you that they’re there to do.

What Goldrick-Rab probably wouldn’t say – after all, she has publicly (and wrongly) heckled me for saying it – is that government aid likely deserves much of the blame for the overconsumption and skyrocketing prices of higher ed. By making students insensitive to costs, aid allows schools – all schools – to raise prices with impunity, and distorts students’ perceptions of the value of higher ed.

So are there problems in for-profit higher education? Absolutely! But they are the same problems we have throughout government-dominated academia. The only difference is that the for-profits are at least honest about grabbing every dollar they can get.