The College Fix

Senator Tom Harkin (D-Iowa) thinks so. A new report released yesterday details a long list of offenses the Senator says the for-profits have been guilty of perpetrating.

“In this report, you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and profit, and regulatory evasion and manipulation,” said Harkin. “These practices are not the exception. They are the norm. They are systemic throughout the industry with very few individual exceptions.”

With more than $30 billion in federal subsidies going into the for-profit college industry each year, the stakes are high for tax payers. And the performance of for-profit colleges is not just a consumer protection issue, as Senator Harkin frames it, but it’s also an issue of fiscal responsibility. Our federal government can’t really afford to waste billions on useless academic subsidies these days, can it?

I’ve heard many conservatives run to the defense of for-profit colleges on the basis of their commitment to “free market principles”–a kind of Randian faith in the universal good of the profit motive. But the for-profit college industry is probably no different that Solyndra, in the end. It’s a private business enterprise that happens to push some feel-good political buttons. We love hugging trees with our tax dollars, just as we love to pour them into education. Upward mobility, prosperity, personal transformation–these are all great American themes that are tied to higher ed.

But for-profits are lagging behind non-profits. To a great degree, these colleges are failing to deliver upward mobility and personal transformation, which means they are failing to deliver any return on investment for all those tax dollars. One simple measure is student loan defaults, which are far higher among those who attend for-profits. The main reason for this, I believe, actually lies in the profit-motive, which encourages for-profits to avoid any real admissions standards. Tuition money is tuition money, no matter whether the student is qualified or prepared to do the work.

While I’m a great lover of the free market. I’m deeply suspicious of the worth of for-profit colleges, both in terms of the low-quality education they typically offer, and in terms of the relatively high incentive for for-profits to ignore academic standards in order to keep all those federally-subsidized students enrolled. If we are going to pump billions of tax dollars into higher education, we need to make sure that we are getting our money’s worth. So long as we are allowing that money to go to for-profit colleges, I’m not sure we ever will.

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