Wednesday, February 2, 2011

Senator Dick Durbin Challenges Nonprofit Higher Education to Be More Aggressive Against For-Profit Higher Education; And To Clean Their Own Houses While They Are At it!

    "And I’m not talking only about low-performing for-profit colleges. There are public colleges and private non-profit colleges that are also failing their students.  It is time for a serious conversation about the cost and quality of our higher education system.  It’s time to question why we allow some colleges to continue to take in new students when they only graduate 15 or 16 percent of students, year after year.  It’s time to question rising tuition and rising student loan debt when students aren’t seeing improvements in outcomes.  And it’s time for a serious conversation about a new study that found that nearly half of college students showed no significant improvement in critical thinking, complex reasoning and writing by the end of their sophomore years. And that one-third of students did not take a single course requiring even 40 pages of reading per week."

Bloomberg News reports today that in a speech before the National Association of Independent Colleges and Universities yesterday, Senator Dick Durbin challenged the nonprofit higher education community to resist efforts by for-profit higher education lobbyist to sidetrack legislative efforts aimed at for profit higher education.  

Durbin, an Illinois Democrat, has criticized for-profit institutions, saying they fail to prepare students for jobs and saddle them with debt. For-profit colleges such as Apollo Group Inc.’s University of Phoenix, DeVry Inc. and Washington Post Co.’s Kaplan University received 25 percent of Pell Grants, federal aid to students based on financial need. The maximum Pell Grant for the 2010-11 award year is $5,550.

Traditional, nonprofit Law schools and graduate schools are currently confronting accusations from everywhere that they produce too many J.D.'s and P.hD's, for too few jobs and too much debt.  Even further, law schools are everywhere engaged in soul searching regarding the extent to which they actually or adequately prepare graduates for the practice of law.  Prominent people within the legal academy are explicitly stating that law school is a losing investment.  So we should be careful in attributing failures to the for profit or nonprofit status of higher education. Here is a further excerpt from Durbin's speech (the full text of which is linked above):

For-profit colleges are the fastest-growing segment of higher education. In the last 10 years, enrollment at for-profit institutions has grown 225 percent.  For-profit colleges are also consuming a disproportionate share of federal financial aid dollars.  Think about this: Last year, the top three recipients of federal student aid -- the University of Phoenix, DeVry and Kaplan University – were all for-profit colleges. For-profit schools educate less than 10 percent of all college students, but receive 25 percent of all Pell grants.  They also educate 23 percent of all students attending college on the Post 9/11 GI Bill, but they account for 36 percent of the Post 9/11 GI Bill funds.  All told, for-profit colleges receive an average of 77 percent of their revenue from federal loans and grants. If you include funds from the new GI Bill and other military tuition programs, it’s more than 90 percent at some schools.  Let me be clear: There are many good for-profit colleges and they serve a vital purpose: supplying education and job training that helps people take the next step up the economic ladder.  Your institutions may even learn from for-profit colleges how to adapt education to better fit the way people live and work today, allowing students to study online and on their own schedule.

But there are also a lot of bad for-profit schools that are raking in huge amounts of federal dollars and leaving students poorly trained and over their heads in debt.  At some schools, students pay $20,000 to $30,000 for an associate’s degree only to learn that their credentials can’t help them find a job. They’re no more employable than they were before but now they’re deep in debt.  Here are some alarming numbers: For-profit colleges make up less than 10 percent of college students – but 44 percent of federal student loans defaults.

I have a brother who, after 20 something years in the Air Force, attended the University of Phoenix, got a degree in computer something or other and is now doing quite well.  His military service paid for his education so he does not have a bunch of student loans to repay.  Anyway, like Durbin I agree that there is a place for for-profit higher education and that federal subsidies are not necessarily wasted at those institutions.  But as it relates to nonprofit, tax exempt status, higher education does no service to the poor if they must mortgage their entire post graduate lives to receive the benefit of higher education.  The rules Durbin argues for regarding outcomes will inevitably and logically apply to the nonprofit higher education sector as well.


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