Keep An Open Mind

June 24, 2010 | Blog

As discussions about the future of for-profit colleges intensify, my email inbox has begun to fill with inquiries. Why haven’t I weighed in? What do I think—is Congress on the right track? What does my recent conspicuous silence portend?

While I’m flattered (and a little confused) by a seeming desire to hear my opinion, the truth is I haven’t been ready to provide one. Over the past few months I’ve spent a lot more time thinking about the for-profits and the tough questions their growing presence in higher education raise. I’ve struggled with an intellectual exercise of sorts, attempting to set aside the financial interests associated with the sector and simply consider whether common objections to the industry would exist even if its colleges were not-for-profit. It’s not easy to sleep at night when wrestling with complex demons like that.

I’ve come to the conclusion that yes, objections would continue. We’d be worried about the quality of what’s being proffered, what students are actually learning, how hard the colleges are working to recruit students not really ready for college work, how much debt folks are graduating with relative to their new income, etc.

Here’s the rub: We should have the same concerns about our current public and private non-profit institutions of higher education. Many of us do have these concerns. We are just less vocal about them, perhaps because it is so much easier to object to treating people badly while making a buck, compared to treating people badly while not making a buck.

Our concerns are well placed, but they are also too narrow. We are looking for trouble only under a single lamplight, simply because that’s the spot illuminated. We need to look more broadly. There is a reason enrollment in the for-profit sector is growing, and it has at least partly to do with student demand. Our public colleges and universities aren’t sufficiently equipped to do the job—and blame for that is shared by states and localities, institutions, researchers, and taxpayers. It’s a little hard to know where the buck stops in that situation. It’s not so hard in the case of for-profits—so we disparage them more easily.

I’m not saying I’ve become a fan of the for-profits, or that my worries about how they are serving students have been allayed. Admittedly, the more I learn, the more I become somewhat more impressed–for example, by the innovative efforts of some to help transfer students and older students find a more fluid and efficient way to a credential. There are some examples of that kind of work at public institutions, but it feels a bit less “outside the box.”

The current discussion in D.C. is worth having. It needs to be broadened and deepened. More voices need to enter the conversation. It’s in the interest of students all over the country for it to continue.

6 Comments

  1. Reply

    JB

    June 24, 2010

    All of the problems people have with for-profit colleges extend across the whole sector. Learning expectations are poorly defined and the very definition of a degree seems diffuse and uncertain. The value of a degree is not easily discernable for a typically informed student-- not only is there variation across disciplines but there are huge variations on within discipline opportunities as well. The credentials are expensive (almost prohibitively) to earn and yet are not sending a clear, well-understood signal to employers.
    All of that being said I still think that for-profit ventures in higher education are putting the cart way ahead of the horse. For-profit providers are far more likely to target the low income, low information students. It is precisely these students that won't have even the little information we know about the true value of a degree as a market signal and it is these students who are going to have the most difficulty with the direct and opportunity costs associated with earning a post-secondary credential. If this weren't bad enough, it's the for-profit sector that's most likely to take risks in order to innovate. While this is great for the sector, it will cause extreme difficulty to students who are exposed to failed attempts to change teaching and learning.
    And since it is students who take on the cost of financing their education, they are largely going to be saddled with the weight of these failures. There are no refunds, and since for-profits are operating in a thin-information environment with low-information consumers in a high-demand, low supply market, even epical failure will probably have little effect on enrollment (which we've seen with the high default rates but growing enrollments at these schools).
    I think we need to do a bit more thought work on the expectations and outcomes for post-secondary education before we can have a healthy for-profit market for education that will benefit students. And if this market is really benefitting the providers more than the students, then the federal government should seriously reconsider their financing policies since all of the money in for-profit education is student credit being offered by the federal government. Default rates are not a terrible metric to use to begin to hold beneficiaries of public education dollars accountable for success. On a macro level, if the goal of post-secondary education is to increase competitiveness in the marketplace for higher paying and newer jobs in the US economy, then defaulting on loans at a high rate is indicative of a failure to achieve this outcome. This is essential irresponsible lending/capital market failure—making credit available because of the valuation of future earnings that turn out to be vaporware.

  2. Reply

    Anonymous

    June 24, 2010

    Amen. These places pretty much do the admissions and financial aid paperwork for the clueless young people that they lure into their offices. As has been said before, the product isn't education, its loans.

  3. Reply

    Rebecca

    June 26, 2010

    "For-profit providers are far more likely to target the low income, low information students. It is precisely these students that won't have even the little information we know about the true value of a degree as a market signal"

    This comes back to a question of social capital; For-profits would LOVE to be taking students away from Harvard (for example), but Harvard students have been taught all along what they need to do to get to college, what options they have to pay for it, how to assess its worth, etc.

    For-profits, as generally open-enrollment institutions, serve the same population as community colleges. These are the students who can't get into a community college in California because they don't know the system well enough to know when/how to register, who often don't know the extent of degrees now available online or who or who can't meet their requirements. (I once took an online course that required us to participate in a live chat between 7 and 9 on Wednesdays. If I could have fit that into my schedule, I would have taken the course in person.)

    The for-profits are in a catch-22 on this issue. We seem to believe as a society that the more people who go to college, the better. Yet college is still arranged for the traditional student, who hardly exists anymore.

    "These places pretty much do the admissions and financial aid paperwork for the clueless young people that they lure into their offices"

    I love how this is stated as a negative. A recent study found that less than 60% of students who were eligible for financial aid at community colleges actually apply. The FAFSA is arcane, difficult and intimidating to students who have never faced this before. To me, doing the paperwork counts as a SERVICE.

    Moreover, take a look at the stats on for-profit colleges. "Young people" needs to be fairly widely defined in order to cover these places. They are not attracting many 19 year olds; more often students are in their late 20s or up, working full time and lacking critical knowledge of how the system work. The for-profits help them through the system.

    Is a for-profit always the best alternative for a given student? No. Neither is Harvard, or PublicU. However I agree with Sara; singling out the sector isn't reasonable; there are lots of people flipping burgers with degrees from second-rate universities who struggle just as much with their loans, and many with non-vocationally oriented degrees from top universities who are drowning in debt. The problem is systemic and needs to be addressed as such.

  4. Reply

    Roger Sweeny

    June 26, 2010

    it is so much easier to object to treating people badly while making a buck, compared to treating people badly while not making a buck.

    What? People who work for non-profit colleges don't get paid? They do it for free?

    If they get paid, they're making a buck.

    It's easy for those of us who work in non-profits to think that that makes us better. But my experience is that we're just as human as anyone else (I teach in a public high school).

  5. Reply

    Anonymous

    June 26, 2010

    Thanks for the post! Please check the state schools and the incoming students...I bet you find the samething...taking the money (private, grant and tax-payer) from students that do not understand exactly why they are there but have been told they need to go. Look also at the numbers of kids that need remedial math and english...

    I hope the data comes through from the private colleges to be added to the state school date so we can see the true story of the FP colleges. Remember all colleges are for profit or they would not survive. They just pay taxes or they don't...

  6. Reply

    Anonymous

    June 26, 2010

    Rebecca, the for-profits have marketing practices you would never see in a CC. They get potential students (who may just be passing by) in the door by offering food, musical concerts, you name it, and 45 minutes later the young person leaves having signed up for a $7000 loan. You're naive if you think this is a good thing.


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