UPDATE: While writing this was cathartic for me, a much better piece has been written that includes my points and many more. If this topic is of interest, I suggest you read it.
Another article came out today about how for-profit colleges and trade schools (lumped into one big indistinguishable mass) are using deceptive practices to convince students to sign up for expensive degree programs, then encouraging the students to take out massive student loans that they won’t be able to pay off when they graduate due to low starting salaries or no jobs. It would be foolish not to acknowledge that some for-profit organizations do this, but it would be just as foolish to suggest that no not-for-profit ones do.
Tuitions are going up everywhere. State support of public institutions is going the way of the dodo, with the most recent announcement being double digit tuition increases for the universities in Arizona. In some cases, the for-profits may become the only place with the capacity to take students as budgets such as California’s cause even community colleges to turn students away. The for-profits may still be more expensive the those public institutions with space, but the gap is closing quickly.
For instance, a full (no transfer credit) Bachelors in Education from the University of Phoenix runs about $43,000 (either online or in a regular albeit evening classroom format). That sounds huge; how will a teacher ever repay that? Of course, they could also go to ASU for around $33,000. Assuming they lived in Phoenix already and that they could take the time off from their current job to get to the scheduled classes and that they could arrange transportation and child care (if necessary). (The for-profits have few traditional students; most are working adults going back for a career change or enhanced qualifications.)
An Arizona teacher has a starting salary on average $31,000, which comes with the threat of layoff due to the state or a district being short on funds. A back of the envelope payment calculation comes up with $497 per month for University of Phoenix vs. $382 per month for ASU. With a take home of under $1955 per month averaged out over 12 months (assuming 18% of gross for taxes and benefits, which is probably low), student loan payments would eat up 25 and 20% of take home respectively. (I’m not even going to talk about private not-for-profits; even the middle-of-the-road ones often charge upwards of $18,000 per year AFTER financial aid. For example, here is the small liberal arts school I went to for undergrad. $25k per year for tuition alone is not uncommon.) Even with the new Income Based Repayment (which would limit the amount to 15% of 1.5*povery rate, or $184 per month) this is still a heavy burden with really slow progress.
A new proposal takes this a step further, calling for schools to be required to keep debt (average debt per student) at or below 8% of the Bureau of Labor Statistics 25th percentile salary. But there’s a catch; this only applies to proprietary (read: for-profit) schools and trade programs. That’s where the hypocrisy comes in.
A new teacher from ASU is nearly as finacially underwater as a new teacher from University of Phoenix, yet the proposal is essentially a price cap on the latter but not the former. I can’t think of a single justification for that beyond the irrational hatred many in education feel for for-profit firms trying to make it in their industry.
Obviously these firms fill some niche that the standard public colleges don’t. It might be convenience, timing, far superior customer service (as long as you are enrolling for more classes, the for-profits will bend over backwards to help you get what you need), a lack of requirements for classes that appear unrelated to your career, or any number of other possible things. From a purely dollar-based comparison they may look like a bad deal, but students don’t choose a school based strictly on dollars. These other factors weigh in, and sometimes the convenience alone can be worth the price.
My point is that if we as a society believe these kinds of limits are valuable then they should apply across the board. Firms who are deceptive in their recruitment techniques should be sued over it, regardless of their tax status. The public education system is slow and resistant to learning from the for-profit sector despite seeing how successful that sector is, and that’s too bad. As state funding drys up, public institutions are going to find even more pressure to drive up enrollment for additional tuition dollars and cut costs (including financial aid) to make ends meet.