Brian Sandberg: Historical Perspectives

The for-profit education industry has successfully lobbied the U.S. Congress, winning major concessions to avoid regulation.  Critics have exposed corrupt recruitment practices, unsound pedagogy, and outright fraud at many for-profit “colleges”.  Proposed reforms would have curbed abuses by for-profit institutions, but Congress has so watered down the legislation that no effective reform will be instituted.

The for-profit lobbyists’ win represents a major loss for American students and for non-profit education.

Despite a series of major scandals, for-profit “colleges” will be able to continue to profit from federal tax dollars.  These institutions will continue to be able to accept students’ federal financial aid and loans, while offering them an inferior education (see previous posts for data on this).

The Chronicle of Higher Education reports on the lobbying effort and the legislation.

A new report by the U.S. Department of Education on The Condition of Education 2011, assesses the current state of higher education in the United States.

The report documents the dangerous growth of for-profit “education” over the past decade, growth largely paid for by U.S. taxpayers’ money being diverted into for-profit institutions through students’ scholarships and grants.

The Chronicle of Higher Education highlights the report’s findings: “One of the report’s chief themes is the rise of for-profit higher education during the last decade. In 1999 for-profit institutions accounted for 3.1 percent of the students enrolled in American undergraduate institutions. By 2009 their share had risen to 9 percent. The sector also quintupled its share of bachelor’s degrees: Only 1 percent of the bachelor’s degrees awarded in 1999 came from for-profit institutions, but by 2009 the figure was 5 percent. (Public colleges and private nonprofit colleges each lost two percentage points of market share during the decade.)”

For-profit institutions are ripping off their students, investing far less money in instruction than nonprofit colleges and universities.  The Chronicle of Higher Education stresses that: “In 2008-9 for-profit institutions spent far less on instruction than did colleges in other sectors. Among four-year institutions, for-profits’ instructional expenditures averaged $2,659 per full-time student, as opposed to $9,418 at public colleges and $15,289 at private nonprofit colleges.”

You would think that if for-profit institutions are paying so little for instruction, then their tuition rates would be correspondingly low.  Wrong.

Again, the Chronicle of Higher Education reports: “But tuition at for-profit institutions was not correspondingly lower.  The average net price for full-time dependent undergraduates in 2007-8 was $30,900 at four-year for-profit institutions, versus $26,600 at private nonprofit colleges and $15,600 at public institutions.”

The message?  Public colleges and universities are a bargain!  They offer students three times as much investment in their instruction for half the price of for-profit institutions.

The U.S. Department of Education report on The Condition of Education 2011 is available online.  The Chronicle of Higher Education article is also online.  [Note: the bolded emphasis throughout this post is mine.]

I will update this post once I am able to assess the Department of Education report in more detail.