Saturday, March 7, 2015

Against For-Profit Education, Part 2





By Professor Doom

     So I started looking at an essay making the case against for-profits, an essay that makes two key errors in its argument:

1       It ignores the corrupting effect of the student loan scheme, even as it repeatedly points out that for-profit education WORKED before the student loan scheme buried schools in money, whether these schools were legitimate or not, due to the bogus accreditation. Don’t get me wrong, today’s for-profit schools are primarily frauds…but it is not, solely, because they are for-profit.

2     The essay also ignores that much of its criticisms of for-profits apply as well to state schools, which in many cases are only a few shades better than the worst for-profits.


      One of the complaints leveled in the essay seems like it has no comparison to what’s going on in state schools:

about 700 advisers work in two buildings -- and that's just to service online students in the central United States.

      For-profit schools have buildings filled with people who serve no purpose to education. Instead, these people work as high pressure recruiters, fighting for the scraps, the few people remaining that don’t know the fraud and worthlessness of for-profit education. These “advisers”, once they suck a student in, then work hard at “retention”, a major goal of state institutions as well. Much of the money for-profits suck in via the student loan scam is spent on marketing, recruiting, and retention.

     State schools need not have buildings filled with recruiters, nor do they have massive marketing budgets, because they have such a big advantage with the public school system. Thus, they don’t have buildings filled with recruiters or pay hundreds of thousands of dollars every day for advertising. Does that allow for savings to be passed on to students?

      Heck no. Instead of buildings filled with people who recruit for the institution, many state schools have buildings packed with administrators, people who, well, nobody knows what they do, although often “retention” is used as justification for their jobs. What is known is that now full time educators are a small minority of campus employees, while top the top heavy administration gets ridiculous pay.

     Thus this particular criticism of for-profits may not identically carry over to state institutions, but the parallel is very strong: both spend huge amounts of money on personnel that have nothing to do with education.

     Another criticism hardly applies merely to for-profits:

“…particularly concerned about low-income and first-generation college students, who may not know much about how college works…”

     While for-profits’ hands are not clean, the gentle reader should realize that community colleges specialize in exploiting low-income and first-generation students, extracting Pell Grant money from them, along with years of their lives, in exchange for “work” that is not college level by any measure, with only a minute percentage of 2 year college work being actual 2nd year college work. I’ve been on a campus that, even though they’d been around over a decade, had not a single course that would count as second year college work…it’s tough to view this sort of “2 year education” as effective when literally nobody is making it to the second year.

     “…some schools use aggressive or misleading tactics to get students to sign up…”


      Oh? This is hardly restricted to for-profits. State schools are shameless about exploiting the mythology of college to get students to gamble their lives away. I defy anyone to show me a state institution’s web page where it gives an honest assessment of graduation (under 20%, and taking 6 years, at many 4 year schools, and under 10% at many 2 year schools). Instead, no different than the for-profits, the state schools promise success and wealth to their graduates. They don’t mention the millions of college graduates that found their degrees useless for their job.

     So, yeah, for-profits paint a rosy picture for prospective students…so do all the other schools.

“…recruiting managers at some companies "created a boiler-room atmosphere, in which hitting an enrollment quota was recruiters' highest priority. Recruiters who failed to bring in enough students were put through disciplinary processes and sometimes terminated."


     But, the boiler room atmosphere is now a goal of state schools, as I’ve written before.
      The essay continues with its valid points against our higher education system, and finally starts to address all the “free” money pouring in from the Federal government:

“…One of Harkin's biggest problems with for-profit colleges is the amount of money they get from the federal government….”


     Hey, no kidding, for-profits are soaking up lots of tax dollars. Of course, it’s pretty obvious the state schools get a great deal of tax money as well (well past $100 billion). I certainly agree with the essay’s criticisms of for-profit schools, mind you…but these criticisms are just as valid for other institutions.

     It’s weird how the essay just never seems to realize this, however:

Students who attended for-profit colleges account for close to half of all federal student loan defaults.


      So, um…that means students at the other colleges ALSO account for close to half of all federal student loan defaults. Again, I agree with the essay’s assessment, but really want to point out the criticisms can easily be extended to most all of higher education today.

     The hard solution to all these problems is to make accreditation legitimate, instead of the total joke, fraud, and sham, that it is today. Fixing accreditation would be tough, I must admit.

     The easy solution? End the student loan scam. Naturally, the essay doesn’t suggest that. Instead it offers more government regulation, more rules against recruiting, and, in short, more laws that will accomplish  nothing. I mean, accreditation regulations run dozens of pages, and still have nothing on them to make education legitimate. I have no optimism more government regulation will help.
      To give some idea of how idiotic the ideas are here, let’s just look at one suggestion: 

Require that for-profit colleges receive at least 15 percent of their revenue from sources other than federal funds. (Current law requires that for-profits get no more than 90 percent of revenue from federal financial aid programs, but that does not include military or veteran student assistance programs. Critics say this is one reason for-profits recruit veterans and students in the military; by enrolling them, for-profits can increase the amount of revenue that doesn't count on the "90" side of the so-called "90-10" rule.)


     So, apparently it’s a problem that for-profits get most of their money from tax dollars (uh, where do you think state schools get their money?). But will this 90% rule on “revenue” make a difference? Of course not. Suppose the school rakes in $100 million tax dollars. It pays $90 million to the Poo-Bah, who in turn “donates” $80 million more to the school. So, the school has $180 million in revenue, although it loses half of it to expenses paying the Poo-Bah right off the bat. But now only 56% of the revenue is from tax dollars…pretty simple stuff.

      Yeah, this rule is easy enough to work around. Too bad the “easy solution” of just turning off the student loan scam spigot just can’t get on the table. No accounting legerdemain can solve the issue of no free money coming in.

      Bottom line, the essay makes a very strong case against for profit schools today…too bad it makes an equally strong case against much of higher education as it stands today.