For-Profit Colleges Hardly Have a Monopoly on Student Exploitation

In recent months, a number of media outlets have launched bazooka on bumblebee smack-downs of the for-profit education industry. PBS's Frontline recently aired College, Inc., and Bloomberg BusinessWeek has reported on the for-profit industry's recruitment of the homeless.

But with only about 7% of all students attending for-profit colleges, are they really worthy of all the bad press?

Relax: I come to bury the for-profit colleges, not to praise them. As I've written before, I don't believe that anyone should attend a for-profit college for undergraduate education. Even if they have the best of intentions (and most don't), they're at a significant competitive disadvantage to their non-profit peers: they have to pay taxes, don't benefit from rich endowments and donations, and generally don't own millions of dollars worth of real estate free and clear: their cost of capital is far, far higher than non-profits. These obstacles make it nearly impossible for for-profits to compete with non-profits on a value basis -- even before you take into account the profits they pay out to shareholders. That they are able to compete as well as they do is actually a testament to just how poorly-run non-profit colleges are.

The issue here -- and the reason I'm getting sick of all the for-profit trashing -- is that for-profit institutions hardly have a monopoly on exploiting undergraduates to fund projects that don't benefit them. The University of Phoenix charges inflated fees to fund dividends and executive bonuses. The University of Florida charges inflated fees to pay basketball coach Bill Donovan $3.3 million per year and MIT spends $200,000 per bed on a vanity project dorm. Colleges across the country dole out massive salaries to high-profile faculty who conduct their own research and teach few classes.

And what of the claim that for-profits are shamelessly taking money from students who are unlikely to graduate and benefit from higher education. Bad news: non-profits do the exact same thing. As education expert Marty Nemko has reported, "[A]mong college freshmen who graduated in the bottom 40 percent of their high school class, 76 of 100 won't earn a diploma, even if given 8 1/2 years. Yet colleges admit and take the money from hundreds of thousands of such students each year!"

There's certainly a distinction between for-profits and non-profits -- but it hardly seems like one that the non-profits can use to claim some sort of moral high ground. It's time for the media to lay off the greedy capitalists who are exploiting 7% of college students and take a long, hard look at the greedy bureaucracies that are exploiting the other 93%.

 

 

 

Follow Zac Bissonnette on Twitter: www.twitter.com/zacbissonnette

Comments

[Redskies]

11:35 PM on 06/16/2010

Zac Bissonnettee is obviously entitled to his opinion, and I'm sure that there are certainly problems at many non-profit universities, but like most bloggers on HuffPost College, he offers virtually no support for his claims--in this case, of exploitation of students at non-profit schools.

The only evidence provided is the following statistic:
"education expert Marty Nemko has reported, '[A]mong college freshmen who graduated in the bottom 40 percent of their high school class, 76 of 100 won't earn a diploma, even if given 8 1/2 years.'"

But seriously, how many students in the bottom 40% of their high school are going to college in the first place? And, given that only about 2/3 of high school students go on to college and about 38-40% of those don't graduate in 6 six years, I'm not sure that 24% college graduation rate for the bottom 40% of high school students is all that bad. (Marty Zemko actually makes the point that a lot of students probably shouldn't be going to college, which is ignored here.)

I know it's just a blog, but this is lazy research. But perhaps that simply goes to prove Zac's point: that a college education--in his case at U Mass Amherst-- just isn't of that much value. Sorry it didn't work out for you, Zac, but please spare us your ressentiment. ;-)

[NellBa]

02:28 PM on 06/19/2010

Most of what goes on in schools has nothing whatever to do with jobs, functioning in society, etc. It based on the notion that there are things beyond the practical that are worth perpetuating. It is similar to public funding of opera, dinosaur digs, theater, mars exploration, historical research etc. The problem is the academic expenditures on such things are very much larger than those in the real world. Example: last time I looked, funding of National Science Foundation was about 7 Billion, . Meanwhile, the FY 2009 budget provided $24.5 billion for No Child Left Behind, and this is only a tiny part of total academic expenditures which are mostly in local and state budgets. So NCLB costs 3 times as much as the NSF, and produces what?.

[ctdavis]

09:41 AM on 07/06/2010

It doesn't look lazy to me at all. It's a short piece and he can't include all of the data that you might like. But Google is ready and willing to help.

The point about the bottom 40% doesn't matter here at all. Sure, things are tougher for those without the skills, but you offer the data point that 38-40% don't graduate, no matter how they did in high school. That's a huge number and the problem is that these kids end up with all of the debt but no degree to help get a job.

Remember that many of these loans are ultimately guaranteed by the US taxpayer. If these 38-40% default-- and the odds are pretty good-- we end up paying.

When college was cheap, it was great for experimentation. Now it's too expensive to take chances and Zak is right on target.

[steveUF]

11:33 AM on 05/10/2010

steverogersforever is correct. No student fee money is used to pay Billy Donovan's salary. What's more, the student athletic fee -- $1.90 per credit hour -- is by far the lowest among Florida universities and one of the lowest in the country because the UF athletic program is so successful.

[NellBa]

03:17 PM on 05/22/2010

It is about time we did some critical thinking about the college sacred cow and this article is a great start. Using rigged statistics, colleges imply or declare that their graduates will materially profit from attendance. If the material benefit does not come about, colleges then invoke cliches about improving your mind, etc. Meanwhile they have taken large sums of money from their students. Many professionals in fields such as accounting, engineering, etc. will tell you their college courses were mostly theoretical and they learned their craft after college.

[steverogersforever]

07:19 AM on 05/10/2010

I am afraid this author is misinformed. Billy Donovan's salary does not come from the academic budget of the University of Florida - it is paid by the athletic association from money donated by supporters and boosters of the athletic team, ticket and merchandising sales. The two budgets are completely separate from one another, although some of the proceeds from the Athletic Association are transferred to the academic budget from time to time.

[camb94]

08:17 PM on 05/08/2010

You are right of course, but you also should be aware that one HUGE difference is in faculty pay. As horrible as the pay is for the average faculty member of ANY private or public college or university, they often have benefits and limits on numbers of classes that they teach. At for profit colleges they make about 30-50% less than their counterparts, often have little to no benefits and sometimes don't even have private offices or space to hold office hours. Faculty have little recourse other than to quit, and in markets like California, jobs at other colleges and universities are now pretty much non-existent.