For Profit Colleges Are The Real Villain
Scott Walker has recently made waves in Wisconsin by surreptitiously attempting to change the mission of the University of Wisconsin, and by threatening to remove $300 million of federal aid to the University of Wisconsin, citing the “laziness of professors” as a problem in need of a solution. On the one hand, he’s right to say there’s a crisis in higher education. But on the other hand, he has the wrong villain.
Instead of focusing on state schools like U of W, we should be investigating the toxic for-profit college industry. For-profit colleges have mushroomed in the last decade and tend to represent themselves as a solution to a very real problem; namely, that it’s become increasingly difficult to get a good job out of high school.
People who have been told to get a degree to pull themselves out of poverty are often faced with two options: enrolling at a nearby community college, or at a for-profit. But, partly because public funds are being diverted to for-profits, more affordable community colleges are not able to fill demand, leaving potential students with the more expensive alternative.
The results have proven to be terrible for the students. They leave with devastating debt, low graduation rates, and often no real education, often worse off than when they started.
This hasn’t gone completely unnoticed. The for-profit industry has been getting into repeated messy problems lately for fraudulent practices, including lying about graduation rates and post-graduation jobs. In the past year alone we’ve seen Corinthian, ITT, and GIBills.com get busted for fraudulent marketing practices.
This won’t be a surprise to those who know how these for-profits operate. They represent a revenue-maximizing industry which game the federal student aid programs for the poor and for veterans. Corinthian obtained $1.4 billion in federal grant and loan dollars in 2010 alone, more than the 10 University of California campuses combined for that same year. We could and should be getting more for our money.
Moreover, the industry specifically targets vulnerable, poor, minority single mothers online with misleading ads promising an easy degree and a new life. Once they have a phone number, they have trained recruiters repeatedly call and “poke the pain” of their targets.
Even when the fraudulent practices are discovered, as is the case with Corinthian, which the Consumer Financial Protection Bureau has accused of running a “predatory lending scheme,” the students haven’t gotten their money back, and neither have the taxpayers.
Obama has been making noises about a new college ranking system. Instead he should create a flat-out fraud detection system, built explicitly to be harder to game than the current watered-down regulatory framework, and particularly considering these companies are professional gamers.
Even better, the government should cut for-profits off of public assistance, and divert subsidies to struggling community colleges and institutions like the University of Wisconsin, which are better positioned to serve the common good. When education becomes a profit center, things go awry: admissions counselors become salespeople, students become consumers to be wrung for every last dime, and administrators become executives who cash out while students and taxpayers are left with the tab.
Corinthian and the other for-profits are only the worst along the spectrum of bad, and almost no college is immune to these kinds of tricks. We need to do a better job of quality control and educational goals. Beyond real punishment for the worst offenders, and refunding bilked student’s money, we should immediately increase funding for state schools, and try to once again create a country of opportunity.