The Department of Education's war on career colleges

Our professor-president likes other professors--notice the proliferation of eggheads--from not-for-profit colleges--within his administration.

As I noted last month, for-profit colleges, such as the University of Phoenix, have more market-oriented courses that offer students training in emerging professions.

That's not all. Students at for-profit schools, often dubbed career colleges, tend to be older, poorer, more likely to be minority or female, and often are the first in their families to attend any college. And they are more likely to depend upon student loans and Pell Grants to pay for their schooling than students at state or private not-for-profit schools.

But the default rate on student loans is higher at career colleges, so the Department of Education last month tightened the screws on them--it vows to cut off student loan funding for schools who fail to meet "gainful employment" standards. This rule only applies to the for-profits.

Of course, the not-for-profits are far from perfect. When I went to college in the 1980s at a big state school, graduating in four years was the norm, now just 43 percent of students in bachelor's degree programs earn their parchment in four years. If students go to college for five years, the school "earns" an extra year of tuition. What a racket.

Meanwhile, career college students are busy just eking out a living; they are not misbehaving in the fashion of their more wordly not-for-profit counterparts as the American Spectator tells us:

• Police find drug lab in Georgetown [University] dorm room.

• Fraternity pledge's chant [trivializing rape] raises concerns at Yale.

• 4 sought in armed robbery on [University Maryland-Eastern Shore] campus.

• Calif police investigate forcible [Sacramento State University] campus rape.

• Reports: Alcohol played key role in UW-Stout student's death.

• Student robbed on College Park [University of Maryland] campus.

• Ypsilanti police seek more information on rape of woman just off [EMU] campus.

• Northern Illinois University locks down dorms amid probe of student death.

• Police release [Cal State University-Bakersfield] murder suspects.

• [University of Cincinnati] student dies in Clifton Heights fall.

• Duke student dies after accidental fall.

• Hall pleads guilty to manslaughter [of Frostburg State student].

• [Arizona State] students on edge after student dies.

• St. Ambrose [University] student dies in accident.

• Fraternity at Radford University has troubled past with alcohol.

The Cato Institute had a lot to say last week about this issue:

First, when you look just at six-year graduation rates for bachelor's seekers at four-year schools, the rates are indeed 55 percent, 65 percent, and 22 percent for public, private nonprofit, and for-profit schools, respectively. Look at African-American graduation rates, however, and, while they drop for all sectors, they drop by the smallest amount at for-profits. For African Americans, publics have just a 39 percent graduation rate, private nonprofits 45 percent, and for-profits 16 percent. Look next at Hispanic or Latino students and you'll see something more dramatic: While Hispanic and Latino students' graduation rates are lower than the overall rates in public and nonprofit privates, they are actually above the overall rate at for-profits.

How about two-year schools? Here for-profits appear to do much better than their competitors, both with overall and minority graduation rates. Indeed, while public schools graduate just 22 percent of their students overall, 14 percent of their African Americans, and 17 percent of their Hispanic and Latino students, for-profits graduate 60 percent, 49 percent, and 63 percent of those students, respectively. That’s really a crushing difference in the favor of for-profits, but the Education Trust authors can’t make themselves applaud the profit-makers for it. Instead, they complain that for-profit students have to go into debt to get those results. Needless to say, the fact that especially public schools are much cheaper to students because they get huge taxpayer subsidies right off the bat is not a point of emphasis for the Education Trust crusaders.

So is it the case that for-profit schools are actually really good? Hardly. While most of the data that's been reported in the war on profits has been distorted to demonize for-profit institutions, there are lots of problems with using extent data to defend those schools. As Education Sector's Ben Miller — who [was one our panelists last week] — has rightly pointed out, federal graduation data is terrible for controlling for transfer rates and other important wrinkles. Moreover, almost no one — save, perhaps, yours truly – has pointed out what seems to be the real problem here: Not that one sector of higher education is worse than another, but that they all bring in students with thousands of ever-growing federal dollars — taxpayer dollars — attached to them, killing students' incentives to economize and schools’ incentives to keep prices under control. In other words, almost every college and university is getting rich off of unprepared and/or overschooled students because you, not students or schools, are paying so much of the bill.

Reform of the career colleges is in order, but let's not have the not-for-profits enjoy an education monopoly.

And why isn't the Department of Education exploring the annual higher-than-the-rate-of-inflation tuition hikes at the not-for-profits? Or their five-year plans. Often students have trouble lining up purposely staggered required courses within four.

Related post:

Idiotic edu-crats attacking for-profit colleges

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