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2015 October 31

Dealing with for-profit competition

In The New Yorker gets one right, “Dean Dad” praises a short article in The New Yorker about for-profit colleges;

A tip o’the cap to James Suroweicki, at The New Yorker, for encapsulating the issues around for-profit colleges clearly and well in a single page.  The piece is well worth the couple of minutes it takes, not least because Suroweicki neatly dispatches a couple of widely held, but false, assumptions.

The way to get the best outcome all around isn’t to ban them or to try to pass lawyer-proof regulations.  It’s to outcompete them  Flood the zone with well-funded public colleges with the staffing, the facilities, and yes, the marketing, to compete.  Force the for-profits to compete on quality.  Frankly, if they can prove they do a better job with students, I have no theological objection to them.  But the experience of the last ten years suggests that if they can only compete on quality, they’ll shrink to a much less threatening size, and students will be better off.  
For-profits met a need.  The way to beat them is to meet that need better.  Austerity in the public sector cedes the field to people with other agendas.  Beef up the publics, and the need that fed the for-profits in the first place will fade away.  They can’t lawyer their way out of that.

Suroweicki’s articleThe Rise and Fall of For-Profit Colleges has the same message, plus a bit more.  The article ends with

But if we really want more people to go to college we should put more money into community colleges and public universities, which have been starved of funding in recent years. We should also rethink our assumption that college is always the right answer, regardless of cost. Politicians love to invoke education as the solution to our economic ills. But they’re often papering over the fact that our economy just isn’t creating enough good jobs for ordinary Americans. The notion that college will transform your job prospects is, in many cases, an illusion, and for a while for-profit schools turned it into a very lucrative one.

The business model for the for-profit colleges has been to get students to take out as much debt as they can, give all the money to the college (who then transfer it to a handful of executives and investors), and deliver little or nothing useful in return, leaving the students with debts that they can’t discharge.  This was obviously a socially undesirable outcome, but legislators have been doing all they can to get rid of funding for public colleges and force them to follow the same model.  I really don’t understand politicians—do they really want the sort of world that they are building?


  1. I can’t talk about all for-frofit colleges, but I did study at one of them for two years. It was and arts school where I was taking photography classes. Most students in my evening classes were not the kids fresh out of HS with student loans, but working adults, 30-50 year old, that were taking one or two classes per semester and could pay for themselves. Most of them had college degrees, some had advanced degrees in areas that had nothing to do with photography or art in general. But we all had passion for it and wanted to get some formal training. Most did not graduate and had no intentions of doing so from the very beginning – unlike younger students, we knew exactly why we were there and what we wanted to learn. We did not need another piece of paper, we had enough of those, we needed practical skills and a chance to start working at least part time in this industry, Many of us got exactly that – started assisting professional photographers or opened our own businesses. Could I have taken the same classes in a regular university? No. I looked at two and they had very restrictive prerequisite structure, I would have to take an extra year of classes to get to the ones I was interested in. And community colleges in my area don’t offer this at all – at best they might have one class on general photography, but not detailed classes on specific aspects of the craft.

    Comment by Sandra — 2015 November 1 @ 00:42 | Reply

    • The article by “Dean Dad” makes it clear why he thinks for-profits started out doing well—they went after niche markets not well served by community colleges or 4-year schools. For example, the photography and art school that you mentioned, or various trade schools (trade-school training is done by some, but not all community colleges). Where some for-profits went “evil” was in the relentless pursuit of loan dollars, without investing in providing the education that they promised to unsuspecting students.

      Dean Dad’s suggestion is that states invest in community colleges providing the education for some of those niche markets, to provide some real competition for the for-profits—it is his belief that the community colleges can do a better job cheaper, if allowed (or encouraged) to do so.

      Comment by gasstationwithoutpumps — 2015 November 1 @ 20:47 | Reply

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