Both Sides of the Coin

Daniel deVise of the Washington Post writes today about the for-profit sector, offering viewpoints from both sides of the coin:

The esteemed PBS program Frontline borrowed our name this week for a broadcast about the for-profit sector of higher education.

Like recent investigative pieces in the New York Times and Bloomberg BusinessWeek, the Frontline program questioned whether operating a college for profit is a good idea. I think I'm safe in saying that all three concluded it was not.

I have published both positive and negative appraisals of the for-profit sector on this blog, always with the important disclaimer that the Washington Post Company owns Kaplan University, a player in the for-profit industry.

(Incidentally, I shook hands with an actual employee of Kaplan University at a speaking engagement last week, so I can no longer say that I have never met one.)

In a nutshell:

For-profit colleges are a fast-growing and profitable sector, offering serious competition to both four-year and (especially) two-year public and private, not-for-profit colleges. They set up shop near freeway exits, offer classes at all hours and market themselves as a convenient, efficient route to a certificate or degree for a student who doesn't have a lot of free time. They are an overflow to over-taxed community colleges, which offer many of the same classes at much lower cost but also lower availability.

For-profits charge more than state universities but less than private universities, at least in terms of sticker price. For-profit students tend to carry more debt after completion than their counterparts in other sectors. That's partly because for-profit students are more likely self-supporting and, well, poor.

Perhaps the most unflattering material in the Frontline piece came from former for-profit employees who spoke of high-pressure sales techniques, call-center tactics more commonly associated with peddlers of time-share vacations and magazine subscriptions.

There was also the familiar procession of dissatisfied students, many of whom claimed they finished their studies with a degree that was not worth the money they had paid, because they had not been given sufficient training.

I spoke to Harris Miller, president of the Career Colleges Association. He lobbies for the for-profits, just as several of his counterparts on the non-profit side lobby for Harvard and U-Md.

Why all the bad press?

"For whatever reason, we haven't been able to communicate effectively," he said.

The criticism, he said, comes from "people who think that for-profit and higher education don't belong in the same sentence."

Miller calls it "attack by anecdote." He says he tries to remind reporters "that for profit is a tax status, not a financial status. Harvard has to run a profit every year. Otherwise, they'd shut down." He reminds his critics in not-for-profit education that "I don't think it's in our collective best interest to be shouting at each other."

But he faults his own sector for a certain lack of transparency, particularly in the past.

"I think there's been a historic tendency to kind of hide from the news media and from the research sector," he said. "We can't hide. We're too big. We're 10 percent of higher education."

He said the industry has to "be honest about the fact that there are some rogue employees in our schools," although not necessarily entire rogue schools. "The dark days were in the late 80s and early 90s. They had some bad actors. And Congress reacted. They probably over-reacted." More than 1,000 for-profit colleges closed, he said, in a wave of regulation and reform.

Lost in the blitz of negative coverage, he said, is the important role that the for-profit sector can play in raising the numbers of low-income and minority students who finish college. The sector serves a group of students more at-risk, by the government's definition, than any other. Three-quarters of students are working adults.

"And, yes, if they're going to go to school, a Pell grant, if it exists, is not enough, and they're going to have to borrow some money," he said.

For-profits, he said, are "serving a group of students who have been abandoned by the higher education system."