By Professor Doom
Last time around
I discussed how a degree from a for-profit institution is worthless, and how
getting a degree from such a place is usually a big mistake. And someone asked
me a question:
“If you’re
Libertarian, you believe that capital,
for-profit, enterprises are always better than government enterprise. So how
can you call for-profit schools worse than the other schools that aren’t in it
for the money?”
That’s a good
question. My Libertarian leanings mean I generally believe doing things for
profit leads to better results than when there’s no profit involved…but there’s
no way to look at those expensive-but-worthless for-profit school degrees and
claim they are an improvement over those cheaper-and-still-mostly-worthless degrees
from state schools.
And, of course,
the situation at for-profits is even worse the more you look at it.
---I’m all for jobs training, at least
if you’re going to tell students that you’re training them for jobs.
Now, we’ve
already established that, for many for-profits, their degrees are basically
worthless in the real world. This is mostly because the actual training in the
degree is minimal. Instead, students just swirl around in irrelevant activity
until all that loan money is drained away.
But, at least
they get that worthless slip of paper at the end, right? Actually, those are
the lucky ones:
The University of
Phoenix, for example, is the industry leader, yet it graduates less than 9
percent of its bachelor's degree candidates within six years.
Isn’t that
amazing? All those commercials for University of Phoenix, talking about the
awesome success of their graduates, how useful it is to go there, are rubbish.
Their degrees are worthless, and 91% of their students don’t even manage such a
degree. But they rake in lots of student loan money, to pay for those
commercials. And, not to put too fine a point on it, University of Phoenix is
the INDUSTRY LEADER.
The state school systems catch grief for
their low graduation rates (in the area of 20 percent within 6 years for many state schools), but it’s clear
they’re doing a superior job to the for-profits. And yet state schools are
always being threatened with shutdown if they don’t improve graduation…
One might think
that the accredited for-profit students, even if they don’t get a degree, can
just transfer over to the accredited non-profit schools. I mean, accreditation
was to assure some legitimacy to institutions of higher education, and to allow
students to transfer to different schools if they have to. Now, this blog has
pretty thoroughly shown that accreditation fails miserably in the “assures some
legitimacy” department, and the simple fact that these for-profit schools are
all fully accredited demonstrates that failure once again.
Accreditation is
a fraud when it comes to legitimacy, but it helps with the whole “transfer”
thing, right?
Heh.
Former students of
for-profit colleges now account for about half of all student-loan defaults.
"I don't think I learned anything at the Art Institute [of Philadelphia],
other than how to get scammed by somebody," said Taryn Zychal, who accumulated
$150,000 in loans, only to find that no other institution would recognize her
academic credits. Legions of other students tell similar stories.
I just give a
small chuckle, but I assure you administrators in higher education laugh
uproariously with amusement at students that actually think their credits are
going to transfer. They totally could, mind you, there’s no law against it,
such transfers are completely subject to administrative whim. I’ve seen
transfer policies violated many times for those favored by admin, not that any
random student will be the beneficiary of such whims.
To summarize
for-profit education: worthless degrees, 91% failure rate, and coursework
“recognized” as worthless and thus non-transferrable. Failure at every level,
then.
So, confronted with the clear evidence that
for-profit education is inferior, do I concede that libertarianism is wrong?
Nope.
See, the thing
is, there’s a government involvement here that distorts things greatly. Now, I grant, blaming government is
something of a cop-out for libertarianism. Government is involved in every single aspect of my life, so any
time anything goes wrong, it’s pretty easy to go with the libertarian
explanation of “government always fails”.
Just to give one
example of how pervasive government involvement is, I had five scallops with my
meal a few nights back, instead of the eight I had with my meals last year.
Why? Because government involvement in the monetary system means the money that
could buy eight scallops last year, can only buy five today. So, yeah,
government tells me how many scallops I may eat with a meal. Government is also
heavily involved in the wine the scallops were cooked with, as well as the
butter, the beans, the soap used to wash the dishes, and so on. But I digress...
Let’s get back to talking about what for-profits are
actually selling, first by talking about what government is actually paying
for.
Who pays the colleges' tuitions?
Mostly the taxpayers. For-profit colleges receive an average of three quarters of their revenue from federal grants and loans. "Some for-profit schools are efficient government-subsidy collectors first and educational institutions second,"
So, back to
today’s discussion. Government subsidizes education right now, via student
loans. Actually, it’s not education that government subsidizes, instead, it
subsidizes credit hours at accredited
institutions. That’s the distortion
here: credits at accredited institutions, not education.
It doesn’t matter
what those credit hours are for, which is why accredited state institutions
have college coursework on Lady
Gaga or The Walking Dead, paying faculty to teach, well, crap, with massive
overhead that goes to legions of administrators. (For what it’s worth, I really
enjoy The Walking Dead…but I just don’t see 4 months’ worth of college-level
study there, except for perhaps technical training in make-up work and other
aspects of making things, which is
not even remotely what goes on in the linked course).
Libertarianism
says for-profits will do it better, and indeed, they do, once you understand
what the student loan money is truly going for. Since it is credit hours, and
not education, that the federal government is paying for, for-profit education offers
completely empty credit hours, quite comparable to the paper courses at UNC.
Naturally,
getting accredited is a slow and expensive process (it took years to bring my
state institution through the accreditation process) and only then can the
deluge of tax loot come flowing in. Of course, for-profits get accreditation
with much more efficiency:
In 2005,
California-based Bridgepoint Education bought Franciscan University of the
Prairies, a failing religious college with 332 students in Clinton, Iowa. Six
years later, the school, renamed Ashford University, has been transformed into
one of the biggest online colleges in the country, with 78,000 students.
Bridgepoint posted $216 million in profits last year, while collecting nearly
87 percent of its revenue from federal aid. Sen. Tom Harkin (D-Iowa) says the
college is "an absolute scam"
Once you take
integrity out of higher education, and throw in endless student loan loot, the
sky really is the limit on what you can do. For-profits may be quicker about
it, but I assure you state schools are little different, in many cases.
The improved
efficiency in plundering isn’t just about growth, of course. The guy at the top
must get his share:
In 2009, the CEO of
Strayer, a chain of for-profits with more than 60,000 students, took home
nearly $42 million...
WOW, that’s some sweet loot there. The
Poo-Bah at a state school with 60,000 students only rakes in a couple million
at most of the tax plunder—admittedly, he splits the loot with legions of other
administrators, while for-profits don’t waste time with irrelevant bureaucracy.
And so, my faith
in Libertarianism is not shaken: for-profits are indeed better at providing
what the government is truly paying for.
Just because government gets what it pays
for, doesn’t mean it’s a good idea for human beings (in fact, it usually
isn’t). For-profits are scams, and a waste of time for most students. The scam
is not the result of them being for-profit, but rather the result of the
student loan scam, which, combined with bogus accreditation, pays for
accredited courses, and not education.
Thus, I do not
advocate, as many do, for the shut-down of for-profit schools. Instead, SHUT
DOWN THE STUDENT LOAN SCAM. Do so, and I have considerable optimism this will
take care of the for-profits quite nicely, and allow for integrity to seep back
into the higher education system.