Trying to burn Phoenix

Two guys who got rich when people lost their homes are telling anyone who will listen about the possible insolvency of for-profit education.  Steve Eisman and Manuel Asensio point to the fact that colleges like the University of Phoenix rely heavily on student loans, thus inflating their revenues and stock prices.

It seems like a straight business argument – that a market financed by personal debt would go the same route as housing and auto sales did in the last few years.  But flipping through Eisman’s presentation on the issue tells otherwise.  Eisman complains of placement stats  and advertising practices with anecdotal evidence of nurses working as hospital janitors and billboards lining homeless shelters.  His speech reads like a hit piece on for-profit education; Asensio’s organization piled on by asking the Department of Education to investigate the industry’s business practices.

Some of the points are fair, and it deserves the question: why has enrollment in for-profit education jumped so markedly that it necessitates these altruistic crusades from people who profit on falling stocks?   It might have something to do with the fact that a college degree from a traditional school isn’t always all it’s cracked up to be.

This puts the questions about Elena Kagan’s Ivy-league background – and the prospect of an all-Ivy high court – into perspective.  It’s not (as some critics suggest) that she and the rest of the court went to schools that are “elite”; rather that they all went to one of two or three schools.  Whether the schools are Harvard, Yale, and Brown or UMass, UConn, and URI.  We know that the idea of the elite school is a crock – the problem is the lack of diversity of thought.

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