Holding higher education accountable (but some schools more than others)

Two stories that have been floating around in the last week haven’t really been connected in most media coverage, but they should have been.

The first is the US Department of Education’s website designed to “increase transparency” by providing prospective students with information on college costs – including tuition and fees and rates of increases over the past few years.  Education Secretary Arne Duncan says the hope is to keep students from being “saddled with unmanageable debt.”

Another story is the ongoing effort to exterminate for-profit colleges – the Strayers and Phoenixes of the world.  Last month the Obama Administration promised new rules on for-profits; earlier this week several Democrat Senators pounded their chests and released a statement condemning schools that exploited GI Bill benefits after they saw a story it on PBS.  (Of course, now that a statement has been released, the problem is sure to be cleared up.)

As a sidebar: When did seeing something on TV become a reason to make a statement?  Shouldn’t there be more study and consideration that goes into an official statement?

The Senators’ statement comes a few weeks after the Obama Administration promised to regulate for-profit colleges.  These so-called educational institutions, it seems, receive large amounts of federal funding through student aid programs and other grants but often leave students with student loan payments and questionable career prospects.

If that sounds familiar, it should, because that’s how just about every other institution of higher learning operates.

Tuitions and fees at saintly non-profit colleges have skyrocketed in the past several decades precisely because the cost of education has been so subsidized – from easy student loan programs to Pell grants to federal work study programs that pay two thirds of a student worker’s wage.  (Another sidebar: It just dawned on me that, due to the Federal Work Study program I once ran a snack bar with federal aid.  That means federal tax dollars went toward making sure people in Coolidge Hall at UMass got exceptional grilled cheese sandwiches served to them.  Suddenly, the existence crippling deficit makes a little bit more sense.)

How much have tuition rates risen?  Enough to motivate the Department of Education to launch a website so that students could keep score and avoid overpriced schools.  It’s a good thing those schools aren’t making money, too, or they’d be facing new regulations, too.

 

 

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.