The Corner

Re: Subsidies and For-Profit Schools

My piece and Corner post yesterday on for-profit colleges prompted some excellent e-mails. A sample:

The scene in higher education that you describe almost exactly mirrors what happened to healthcare shortly after Medicare and Medicaid became realities.

Since Hospitals were paid based on cost, costs spiraled out of control. yes the demand grew, but hospitals were in a can’t fail situation. No matter what the costs the government would pony up.

Just like in education today, smart people saw an opportunity. Enter the for profit chains like HCA and Humana. I worked for one of these and the most critical employee we had was the cost report expert. he knew how to milk the most from the government.

Of course the government responded by diddling at the margins. they were unwilling to acknowledge that they had created the environment so most of what they did to resolve the problems backfired. Some of it was stupid, like “certificate of need”  or “cost containment” via “rate setting”. Stupidity on steroids.

now we get to watch our government make exactly the same mistakes. Another great big gob of money going right down the oubliette.

Another reader writes:

I’m on the faculty of an on-line university and the vast majority of students are using student aid to attend. With the switch of the student loan program, in the summer all of the aid will be administered through the federal government’s program.

Judging from the quality of students (both graduate and undergraduates), the university is dipping into the pool of people who missed getting a degree right out of high school. However, the school does emphasize to the students that they are on the hook for their education and that the loans aren’t free.

I do know that some students are wasting their money and I can’t see how they’ll graduate without a lot of bending over backwards. (that’s hard to do online). But the large majority are engaged in bettering themselves and are successfully doing so.

That said, in anecdotal conversations, many of these people haven’t really done any thorough cost/benefit analysis on the cost of their degree vs. the increase in their salaries the degree is going to deliver. I think that is where the for-profit schools may let the students down. Tuition is expensive and getting a ten or fifteen thousand dollar increase in pay isn’t going pay back the loans anytime soon.

I have a son who is a partner in a law firm and has been practicing for ten years and he still acts like the student loans he took out for his education (George Washington Law School) are a tremendous burden. I shudder thinking about a BS Education student who has taken loans out for eight semesters faces when they get their job.

The problems that afflict health care, housing and higher ed are similar: inflated costs, due in part to government subsidies.

Here’s another:

Thank God for the for-profit colleges. Without them, I doubt that state and community colleges would be offering on-line courses and weekend courses.  Or that teachers could update and extend their education on-line without leaving their families at home or with baby sitters.

That’s another good point: Competition from for-profits has forced community colleges to keep up.

Here’s one from a “former Foucault and Derrida reader”:

You couldn’t be more right about the lack of monetary value a philosophy degree holds.  That’s why I took mine, got an MBA and became a derivatives trader. After all, I was a pragmatist.  You don’t have to be a math major to know that a job paying 19K a year will not pay back 100K in loans.  Keep up the great work.

Thanks. And finally, a challenge (from a reader with an e-mail address that suggests affiliation with a career school):

You should get a job at any one of these organizations as an admissions advisor.  Then come back and write another article.  I’d bet your opinion would be somewhat different.  You’d probably be mortified if you care at all about education, which I suspect you do. 

Try it for a couple of months.  You seem like a smart guy. After a real experience in one of these places, I’d say you might last a month and that’d be a good enough sample, you’d probably feel that Shireman has a point. 


He’s not all right, but he definitely has a point. You’d be doing yourself, and your fellow Americans, a favor by actually knowing what you’re talking about, which you clearly don’t unless you think PT Barnum would do a good job of running a school.


At this point, Shireman is doing a little better than you but I think you’re smarter so why don’t you check it out for yourself, anonymously, and see.

I’d probably also be mortified if I worked for a four-year school trying to convince students not to waste their time and money taking classes on ethnic and gender studies or getting a “humanities” degree that requires no exposure to the great works of the Western canon. Much of traditional higher ed at this point looks like a circus to me. Why should the four-year schools get special treatment?


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