Gas station without pumps

2014 May 2

Holding colleges accountable

Filed under: Uncategorized — gasstationwithoutpumps @ 08:21
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Earlier this week I signed the petition: “Hold predatory career colleges accountable for abusing students and ripping off taxpayers“.

The purpose of the petition is to get the Federal Department of Education to hold colleges, particularly for-profit colleges, responsible for providing the education that they promise to students who take out massive loans. Although I worry a bit about over-regulation of colleges (politicians and regulators can too easily do serious damage by imposing ideology), the particular measures that are being proposed in this petition seem reasonable:

  • Providing financial relief for students in programs that lose eligibility. Schools with ineffective programs that lose eligibility for federal aid should be required to make whole the students who enrolled in the program. Providing full relief to all such students is not only fair, it also creates a greater incentive for schools to quickly improve their programs.
  • Limiting enrollment in poorly performing programs until they improve. Under the proposed regulation, poorly performing programs can increase the number of students they enroll, without limit, right up until the day the programs lose eligibility. Instead, the rule should impose enrollment caps until a program improves.
  • Closing loopholes and raising standards. The proposed regulation is too easy to game, and its standards are too low. For example, programs can pass the standards even when 99% of their students drop out with heavy debts that they cannot pay down. Unscrupulous schools can easily manipulate job placement rates or evade accountability by limiting program size. They can exclude the debt of graduates who enroll in a program for just one day, and can enroll students in online programs that lack the accreditation needed to be hired in the states where the students live. These types of loopholes need to be closed and the standards raised.
  • Protecting low-cost programs where most graduates don’t borrow. Low-cost programs where most graduates do not borrow at all – such as community colleges—should automatically meet the standards because, by definition, these programs do not consistently leave students with unaffordable debts. Burdening these programs with a complicated appeals process could prompt more schools to leave the federal student loan program and lead to the closure of effective, low-cost programs.

The “financial relief” part only makes sense if the failing colleges are paying back the money that they scammed out of the students, not if the Federal government is providing a backstop for them.

Keeping the low-cost community colleges free from the bureaucratic burdens imposed on the predatory colleges seems also like common sense (and so is unlikely to Federal bureaucrats).

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