Articulation Agreements Between Public and For-Profits?

A political battle is underway in Tennessee, as the profit-seeking colleges seek to be included in a state-wide articulation agreement that would allow students to transfer their credits among institutions. This article on KnowNews.com tells the story.

For-Profit Higher Ed in the Developing World

Inside Higher Ed has an interesting article about for-profit institutions in the developing world

Taking a page or two out of the successful Western for-profit’s playbook, Hayes stressed the importance of market research -- of knowing students’ problems and solving them, whether they are about the time or location of a course, or short-term financial pressures

Another key, he said, is branding. “A brand, if nothing, else is a promise to your marketplace,” he said. “Since education is a service, in essence, we’re basically marketing something that you can’t touch, you can’t feel, you can’t see.”

Riccardo Scavazza, vice president of operations, said that much of the growth has hinged on the success of marketing to low- and middle-income adults who didn’t have access to postsecondary education before the boom that’s happened in Brazil’s for-profit education market in the last decade. Essentially, Anhanguera and its handful of publicly-held competitors have created a market where there wasn’t one. In 2006, the IFC loaned $12 million to a Brazilian private equity firm to invest in the institution.

The Case AGAINST More People Going to College and More Government Involvement

New American analyzes Obama's push for more people to attend college and the SAFRA bill, with some great quotes by higher ed experts:

Alison Wolf, professor of public-sector management at King’s College in London:

Not only do the poor pay for the education of middle-class kids through either direct taxes or through increased costs of goods produced by American companies that must support the program through taxes, less money is available in the private sector to create businesses and provide jobs for everyone, meaning there are fewer jobs (and usually poorer paying jobs) and less opportunity for advancement for poor people.

Charles Murray, political scientist and scholar at the American Enterprise Institute: [asked who should pay for college education]

“Ideally, students themselves. If that means delaying college for a few years to save money, so much the better — every college professor has seen the difference in maturity and focus between kids straight out of high school and those who have worked or gone into the military for a few years.”

Career counselor Marty Nemko addressed the decreased investment of students and parents under a government-funded tuition program:

“The more the government and private donors (alumni, private scholarships) pay of the college tab, the less responsibly the student and family need to determine college’s cost-effectiveness. Also, every time the government increases financial aid or a private scholarship is set up, it merely allows college to raise their sticker prices more.” In other words, not only would free higher education diminish the work ethic of the students, but it would also allow for regular increases in tuition at the expense of the government, which of course would be accommodated by tax raises.

Alfred Roval, professor of education at the Regents University of Education:

“The focus on higher education gives me a little concern. That assumes that every job in this country needs a college education. That’s not the case. Some jobs don’t need one.”

Dennis Cauchon of USA Today on the preferential treatment afforded to those college graduates who pursue government positions:

“Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector. The number of federal workers earning six-figure salaries has exploded during the recession...The growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with the $40,331 in the private sector.” Despite the discrepancy in pay that has already provided federal workers an advantage, Obama’s proposal forgives federal workers of their student-loan debt after 10 years, as opposed to 20 years for those employed in the private sector. This preference reflects President Obama’s anti-business, pro-big government attitude that he brought to the White House.

Richard K.Vedder, director of the Center for College Affordability and Productivity:

“Sending marginal students to four-year degree programs, only to drop out, is a waste of human and financial resources, and lowers the quality of life for those involved.”

George Mason University professor Bryan Caplan:

greater college attendance has the opposite of the intended effect. Caplan believes that there is little connection between the skills acquired in college and those required in life.

Sun Sentinel Attacks For-Profit Colleges

The Sun Sentinel tool a pot shot at the for-profit college sector over the weekend. I'll refute some of the claims made:

Career colleges make it easy for students to enroll with little or no money up front. Financial aid representatives help students line up loans. Even candidates with a bad credit history are not discouraged.

Students attending any type of college are able to obtain loans to finance their education with bad credit. Andrew Gillen relates this easy credit to the housing bubble that recently popped, terming it the tuition bubble.

The greatest risk, though, is not for the schools, since they receive their money up front, but to the students taking out the loans and ultimately, to taxpayers. Unpaid loans follow former students through life, can ruin their credit and lead to serious consequences, including the federal government garnishing their wages and withholding their tax refunds. Even declaring personal bankruptcy is not an option to shed student loan debt, except in rare cases.

"You want to be very careful as a consumer taking on a huge amount of debt based on the assumption that you're going to have a great job that will make it manageable to pay off,'' Asher said.

Again, this same argument applies to public and not-for-profit private colleges. The root of the problem is that the government is offering easy, non-collateralized credit to kids, many of who have never had a job and have blurred expectations of their future careers.

"Some of the schools to me, just from experience, are diploma mills,'' Rosenberg said. "They're into the dollars more than the education.''

He said he considers a degree from a for-profit school a "weeding-out factor.''

"If all things are equal with a candidate, I will go with somebody that graduated from a traditional college,'' Rosenberg said.

In an address to the 28th National Conference on Higher Education in 1973, Jack Jones suggested that the public image of proprietary institutions is based largely on the lowest common denominator, implying that the entire sector is identified according to the misdeeds of a few bad apples that are part of a much larger and healthy orchard. In a 1974 paper, David A. Trivett likened this personification to “basing the image of all colleges and universities on knowledge about Harvard or Oxford. Sure, some of these schools are bad apples, but not all of them. There are also some scumbag public and not-for-profit schools out there. How about we judge a school by its merits, rather than its association or ownership status.

Spellings on Obama's Pell Grant Policy

Former Secretary of Education Margaret Spellings speaks out on the recent student aid bill that provides Pell Grant increases, in a Chronicle of Higher Education article:

Ms. Spellings said, such increases should be accompanied by assurances that the money is going to college-ready high-school graduates.

"This idea that that's the way we do it now—that we take kids who are not capable of doing college work and give them money so they can do it—who's for that? Nobody. That's stupid," the former secretary said.

Ms. Spellings said she was particularly dismayed by the Obama administration's abandonment of a pair of grant programs for low-income students—Academic Competitiveness Grants and Smart Grants—that the Bush administration created with Democratic support.

The programs were "administratively burdensome, granted," Ms. Spellings said. Their failure, however, "frankly was a testament to how broken the interface is between high schools and colleges," she said. And now the Obama administration appears to be saying: "Let's get rid of the solution because we can't fix the problem," she said.

Responding to Uninformed Critics

Daniel Luzer has a post up on the liberal Washington Monthly College Guide blog that indicates his support for the gainful employment 8% debt cap proposal on career colleges. I responded with information that will be useful to readers:

The gainful employment 8% cap is a terribly flawed proposal. Financial aid expert Mark Kantrowitz put out a policy paper arguing that it is unrealistic and way too strict and that even traditional and professional schools (if subject to the same rule) would have a hard time complying with it.

I did an analysis on what the max debt that could be borrowed for 10 occupations that are expected to be among those with the greatest employment growth in the next 10 years, and coincidentally the career colleges train people in. For comparison, I computed the max debt that a law student could borrow...$44k (and that includes any undergraduate debt).

Latest on Gainful Employment

Kevin Kuzma has a good article up at Career College Central discussing the latest news in gainful employment (which isn't much):

Recent comments from members of Congress, and even from the Department of Education itself, are giving investors hope that the government may soften its proposal to penalize schools whose students graduate with large loans and low- paying jobs. The issue comes under the guise of "gainful employment," which fundamentally questions how well schools prepare their students to get jobs that can cover their educational debt.

Education Secretary Arne Duncan testified in front of the House Education and Labor Committee March 3 that the department is "by no means wedded to any one direction" on the rule. "We don't want to be overly heavy-handed,"

Congress does have a say on the upcoming reauthorization of the Elementary and Secondary Education Act, though, which some believe could put Duncan in a tight- enough spot to make concessions to ensure passage of that bill.

An Education Department official said the office is working on the language and couldn't comment further