Posted on 04/10/2019 6:14:44 AM PDT by reaganaut1
For about fifteen years, from 1995 to 2010, enrollments grew rapidly in the for-profit higher education sector, but since then have fallen substantially. The reason for the decline is mainly the overt hostility to for-profits during the Obama administration. The Department of Education killed off two of the largest for-profit competitors (Corinthian and ITT), and rhetoric from top officials created the impression that the for-profits were in general an educational scam.
That impression is challenged a newly published book Unprofitable Schooling, edited by Todd Zywicki and Neal McCluskey. It consists of eleven interesting and varied chapters; the one I will focus on is entitled “Assessing For-Profit Colleges” by professor William Shughart of Utah State and Jayme Lemke, senior fellow at the Mercatus Institute. In it, the authors argue that the for-profit sector has unappreciated virtues, particularly for many students who are the most at-risk, and that singling it out for regulatory attack is counter-productive.
For most of our history, for-profit higher education was almost non-existent. As Shughart and Lemke explain, “The significant tax advantages enjoyed by private and public nonprofit colleges make that market one into which competitors find it difficult to enter.” Nevertheless, starting in the 1990s, for-profit schools began to attract large numbers of students, suggesting that they must have provided many students with value in excess of the cost.
But why would students who were after a short-term, occupationally related course of study choose to enroll in a for-profit and pay more than if they enrolled in a community college, which is almost costless? Our two economist authors knew there had to be reasons and dug for them.
The first important difference, according to Shughart and Lemke, is that for-profit schools are more accessible for many students. How could that be?
(Excerpt) Read more at jamesgmartin.center ...
And the so call non-profits make a huge amount of money.
Non-profit in name only.
It was taken over by ITT when the predecessor school went bankrupt in 2009.
All in all, they delivered a good product in the classroom and online.
However, they committed the unpardonable sin of being a non-union company.
Hence, the Obama Dept. of Education executed them in September of 2016.
They may not be in it for the profit, but they are in it for all the money they can stuff into their endowments.
Excellent article.
I taught marketing and advertising classes at (for profit) Johnson and Wales University while they had a branch campus in Gothenburg, Sweden.
It was a good experience for the students, both American and European. And I felt that the education received was as good or better than in a lot of public colleges in the United States.
Trump did get a tax enacted on some portion of those huge endowments.
Can’t remember the formula, though.
All schools public and private should have to produce accurate reports showing graduate employment and average salary.
That’s the only true measure of economic worth.
They all (both profit & non-profit!) fight that tooth & nail!
In what way are the vaunted “not for profits” not raking in monies?
accounting practices do not make virtue.
Consider a tax of 2 percent on endowments that exceed $100,000 per enrolled student, stepping up progressively to a maximum of 5 percent for endowments that exceed $1 million per student.
Example: Harvard’s per student endowment is $1.8 million per student. Yale’s is $1.9 million. Both would thus qualify for the 5 percent endowment tax. Their combined endowments are $50 billion. My proposed tax thus provides the federal government with $2.5 billion in tax revenue earmarked for education. This would help de-concentrate the power held by the leftist institutions of the elite.
The admissions scandal has reveal an interesting fact about these elite colleges; they are high priced diploma mills.
Parents were willing to commit criminal acts and paid the bribes with no fear their academically unqualified child would flunk out. They knew if the school collected enough tuition, a diploma would be given.
“If the goals of Title IV and other federal programs,” they write, “are to make it easier for marginal students to pursue educational opportunities, then pulling loan and grant money from only those programs that are disproportionately likely to serve marginal (and often marginalized) students is counterproductive.”
Careful. A thought like that and a cold drink of water could kill an education bureaucrat.
One thing about this scandal that bothers me.
Stanford, Harvard etc. are all private schools. As long as they are not discriminating racially i.e., giving the feds a reason to intervene. Can’t they set any standard (bribe level!) that they want? Its embarrassing for them that this shows that their whole intellectual elitist image is sham. So what! Many of us knew that already ! (Look at Slick, Hellary, John F’ing Kerry, the list of examples is endless!) It seems they could make a deal where they say build me a building or give an endowment and your dim-witted progeny until the end of time can get in and get a pass and it all be perfectly legal. Contract between two parties and all of that.
The real reason ITT Tech shut down was that they were scamming their students and scamming the government.
Over 5 Billion Dollars in FedGov money went to this place.
https://studentactivism.net/2016/09/06/the-death-of-itt-tech-part-one-what-happened/
Shutting off the money supply was the right thing to do. Next, the government ought to do the same with every other single college and university in America.
No more taxpayer funding for this worthless liberal indoctrination sites.
Better yet, tax all non-profit investment income at full corporate rate. Most non-profits are Leftist, anyway.
I am good with that.
I am all for gutting the elite leftist institutions.
Mostly useless majors AND expensive. You can always tell the left is in charge.
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