Phi Beta Cons

Improving For-Profits

New York Times writer Joe Nocera details some of the problems with for-profit colleges: “Although for-profit colleges enroll 12 percent of the nation’s college students, they soak up about 25 percent of the federal government’s student-aid budget. Fewer than half the students who enroll in the four-year for-profit schools graduate. Roughly 47 percent of those who were paying back their loans in 2009 defaulted in 2010.” (The for-profit school loses nothing when a student defaults, but the student is saddled with the loan until it’s paid off.)

Sometimes it’s said that the high dropout and default rates are explicable by the fact that the recruited students are bigger academic and financial risks than students in the traditional system. That’s the part I’ll never understand, it seems. We believe that there are already too many students going to college; why do we want even more, and even less prepared, people to go? And we saw in the housing market that it was a mistake to extend mortgages to people unable and unprepared to handle them; why is it a good idea to give college loans to the academically and financially unprepared?

Be that as it may, Nocera believes that the for-profits need reforming, but opposes the recently released DOE regulations. Instead, he suggests the ideas of Robert Silberman, chairman of Strayer Education (an unfortunate name perhaps), “widely regarded as one of the better for-profit companies.” Silberman suggests two changes, according to Nocera: first, “the government should force the for-profits to share in the losses when a student defaults”; second, “the government should set up a national eligibility test to screen out students who lack the skills to attend college.” Those sound like sensible and even honorable ideas.  

Most Popular


Trump and the North Korean Tipping Point

The world has been stunned by North Korean dictator Kim Jong Un’s announcement last week that he was suspending his country’s nuclear tests in preparation for the impending meeting with President Trump. Even critics have had to concede that Trump’s bellicose rhetoric since last summer regarding the North ... Read More
Politics & Policy

E Pluribus . . . Gridlock

A mantra we hear everywhere these days is that diversity is a good thing. And no doubt, it is. Diversity facilitates an exchange of ideas and opinions, and it promotes economic growth. Moreover, the alternative to diversity is to suppress the views and opinions of some subset of citizens, which is completely ... Read More
Economy & Business

Trade Misunderstandings

I was distracted by other policy topics last week but not enough not to notice Peter Navarro’s article in the Wall Street Journal, headlined “China’s Faux Comparative Advantage.” Considering Navarro’s position in the White House, it is unfortunate that it demonstrates some serious misunderstandings ... Read More