It's pretty normal to see Washington Post contributors loosening their thought bowels to evangelize in favor of for-profit colleges. After all, one of the few reliably profitable divisions of The Washington Post Company is Kaplan, Inc., which runs for-profit colleges itself. But Alex Pareene points to an example of the Post's typical glorifying of the for-profit college industry that reads like a man valorously attempting to fight off Stockholm Syndrome.
That man is Jay Mathews, who writes the "Class Struggle" blog and who serves as the Post's education columnist. Yesterday, he wrote a piece titled "5 reasons for-profit colleges will survive." Mathews is typically a skeptic of these ventures, and before we get to his reasons why they will "survive" -- "survivability" being a complimentary trait of things like malaria, and zombies -- we are treated to three paragraphs of Mathews explaining his skepticism, and a very quiet disclosure that suggests that he was confronted with Kaplan CEO Andrew S. Rosen's new book, and maybe it was time to kiss the hand that feeds him.
I wasn’t sure I wanted to read the book or write about it. As a 40-year employee of The Post, anything bad I say might seem too little too late, and anything good would be taken as trying to protect the company. I was glad Rosen agreed his company had messed up. He did not shake my feeling that profits and teaching are a bad mix, but I did learn things I needed to know.
As Pareene points out, what Mathews "needed to know" was more or less very conveniently contained in this press release. This gets spun into Mathews' "five reasons," many of which are odd. We learn, for example, that "for-profit schools are less of a drain on tax dollars than non-profit or public schools," and that the for-profits are doing marginally better at graduating "students with two or more key risk factors."
U.S. Education Department data show students with two or more key risk factors, such as delayed enrollment, no high school diploma or full-time job, have only a 17 percent chance overall of getting a two-year or four-year degree. Their chances are 24 percent at for-profit schools. That’s not a big improvement, but they are doing it with fewer tax dollars.
Hard to mount much of a hallelujah chorus for a 24 percent graduation rate, but let's give credit where it's due. That said, let's also recall that these institutions are still playing with house money -- so how's the return on investment for taxpayers?
Critics have questioned the quality, cost and tactics of some for-profit schools. Sen. Tom Harkin, D-Iowa, led an investigation last year that found that nearly one-fourth of students from for-profit colleges default on their loans within three years of leaving school, most without a degree. The senator's report: "Debt without a Diploma."
Nearly half of all federal student loan defaults occur at for-profit schools, although the schools have only 10% of higher education students, Harkin found. (A default is a loan at least nine months behind in payments.) The Government Accountability Office also issued a report this year challenging how the schools recruited students.
And, hey ... loans to customers with two or more key risk factors? That sounds awfully familiar:
Just as the subprime mortgage bubble was giving way to a bust that would help trigger a devastating financial crisis, Goldman Sachs, a firm that had been at the center of Wall Street's rampant mortgage speculation, found its way to a new area of explosive growth: In claiming what would eventually become a 41 percent stake in Education Management Corp., Goldman secured itself a means of tapping into the boom in for-profit higher education. The federal government was boosting aid to college students nationwide, just as a declining economy prompted millions of Americans to seek refuge in higher education, leading to dramatically expanding enrollments at many institutions.
But unlike in the mortgage markets, where some unwise or unlucky investor got saddled with the bad loans after the festivities ended and home prices fell, this new market in higher education boasted seemingly unlimited growth potential at virtually zero risk. The burden of college loan repayment falls entirely on students' backs, shielding corporations from the consequences of default. The colleges essentially receive all their revenues upfront, primarily through federal government loans and grants for tuition, regardless of whether students are able to gain employment and pay back their loans.
But what are the students saying about these unique educational opportunities?
Students at "for-profit" colleges like Kaplan University and the University of Phoenix are promised an easy, convenient way to earn a college degree. Instead, many students are drowning in debt with nothing to show for it. The University of Phoenix's graduation rate is just nine percent, the Education Trust reports. For-profit students make up almost half of those who default on their student loans.
Once they're enrolled, students discover loans they never signed up for and bills for classes they never took. They find themselves harassed on the phone (one prospective student was called 180 times in one month) and dogged by creditors at their door.
Even though explosive investigations from media outlets and government agencies have exposed industry-wide fraud, heads of for-profit colleges defend their schools as valuable ways for nontraditional students to earn degrees. What they don't admit is that in many cases, for-profit colleges are simply sinkholes for federal student aid dollars. For-profits siphoned off 4.3 billion in federal student aid money in 2008-2009.
Okay, then! There go two of the reasons for-profits may survive. The remaining three are ... well, let's be charitable and say "less compelling." One of the reasons is that the for-profits won't be spending money on "luxury dorms, restaurants and athletic facilities which don’t produce more learning or more graduates." (They won't be spending money on repositories of learning known as "libraries," either!) Also, the "rap against land-grant colleges and community colleges when they were created" was that they were "labeled as wasteful, low-quality, hucksters cheating our youth." (However, those institutions "survived" by proving they weren't such things, as opposed to living up to those criticisms.)
But this is the oddest reason Mathews provides:
In other industries, the rise of for-profits has sparked great controversy, but not for long. In the 1980s hospitals began to shift from publicly funded or non-profit to privately funded, with much criticism. Today, most of us don’t know or care how the hospitals we visit are financed.
So, given enough time and enough apathy, we may simply stop caring about how these ventures are financed. But maybe we should! For-profit hospitals spent a lot of money on lobbying during the fight over the Affordable Care Act, in which they won key concessions. For-profit colleges have spent money mounting a similar lobbying campaign -- and they weren't content with the watered-down regulations they got in return.
Really, anyone who needs proof of the way money (some of which came from taxpayers!) has influenced this debate need only remind themselves that this article under Jay Mathews' byline exists.
But it's hard to blame Mathews. Honestly, the whole piece reads as something from a man who's just hoping he can close an assignment he didn't want as quickly as possible and get on with his life, hoping that the taint of writing this won't outlive the rest of his work. And in the comment streams, after readers give his post a good reaming, Mathews emerges to offer: "thanks guys. You are proving my point, but happy to have your input. I agree with you, mostly." Hostage negotiators can stand down for the time being, apparently.
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