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For-profit Higher Education
On top of all the forces now weighing against the for-profit-college industry, there's one that hasn't grabbed any headlines but has the potential to upend some of the most visible players in the sector: robust and inventive competition. MOOCs for credit, new ventures like the competency-based degrees from Southern New Hampshire University's College for America, and online programs are some of the emerging ventures that now offer as much (or more) of the convenience and flexibility that were once for-profit colleges' chief selling point.
At a Congressional hearing before the defense appropriations subcommittee, Sen. Richard J. Durbin (D-Ill.) and Sen. Jack Reed (D-R.I.) called for stricter accreditation standards and criticized for-profit universities for using slick marketing tactics to get a larger cut of federal dollars. The hearing seemed to revive Sen. Durbin's efforts to pressure the for-profit sector to increase value for military members after he tried last year to reduce the percentage of federal dollars those universities could keep as income.
To hear and read the pundits, online education is set to transform how we learn.To buy all the giddy commentary is to believe that traditional college education will meet its maker thanks to crushing cost pressures from the online world. It all sounds so good and promising, until we realize that college is not about learning much as we might wish it were. When parents spend a fortune on their children’s schooling they’re not buying education.
It has become trendy if not clichéd in recent years to declare that higher ed is the next "bubble" in the American economic system will pop. This view has been particularly dominant in business publications. So we were surprised on Sunday to read in Forbes that the bubble might not be traditional higher ed. Could this be the start of the bursting of the higher-ed-bubble-story bubble?
Congress banned bounty-paid admissions counselors because the bounties tend to transform what should be an advising job into a sales job, complete with exaggerated assertions, creative avoidance of relevant facts, and a pursuit of the most vulnerable. The ban on bounties applies equally to for-profit, nonprofit, and public institutions, yet the serious transgressions have occurred predominantly in for-profit colleges. Why? Because the owners themselves are paid bounties on a vast scale.
A new study reaffirms that for-profit colleges do offer a path to higher education for students from underrepresented minority groups, low-income backgrounds, and relatively weak records of academic achievement. But those who graduated with associate degrees from for-profit colleges earned, on average, $425 per week - statistically indistinguishable from the $388 earned weekly by those who held only high-school diplomas.
In a notice to appear in Tuesday's Federal Register, the Education Department says it will revisit its controversial "gainful employment" and "state authorization" regulations as part of expanded rule-making sessions on fraud in the student-aid system. Both rules have been struck down in court, following challenges by for-profit colleges.
Tom Harkin (D-Iowa), chairman of the Senate Committee on Health, Education, Labor and Pensions, has announced that he will not seek re-election in 2014. For the last three years, the senator has been in the spotlight for investigating for-profit colleges. He found that for-profit universities and colleges were receiving a growing share of federal student aid but spending much of the money on marketing and aggressivevrecruiting, while students were taking on excessive debt. The senator expects to keep pushing for change.
Low quality programmes are low-cost programmes. Charging high tuition fees for a low-cost programme results in profit. Therefore, profit comes from low quality programmes. It follows, then, that since private sector providers are making a profit, the quality of their programmes must necessarily be suspect – as an imperfect logic. Simply because low-end, private sector institutions are frequently seen making profits, from a poor product does not make quality and profit incompatible.
Investigators from the U.S. Department of Education have subpoenaed the e-mail records and other documents of the group, the Institute for College Access and Success, or TICAS, to help determine if a key former department official, Robert M. Shireman, broke federal ethics laws by improperly communicating with the organization about those regulations. Before joining the Education Department in 2009, Mr. Shireman was president of TICAS, which he founded several years earlier.