Friday, June 27, 2014

The Obama Administration has for-profit higher ed companies in its gunsights.

Corinthian columns in Jerash, Jordan
Corinthian columns in Jerash, Jordan (Photo credit: Wikipedia)
That's the message the industry's trade association is drawing from the DOE's virtual destruction of Corinthian.

If that's right, I am with the Administration on this one.  While there no doubt are some good for-profits out there, overall the industry has been bad for higher education and for students.

Here's why:  Many of these firms recruit students, admit them (whether they are capable of completion or not) and line them up for federal loans they often can't afford to repay.  The students fail out or simply quit.  The company pockets the loan dollars as tuition income and pays its execs and shareholders handsomely.  The ex-students default on their loans.  And we, the taxpayers, pick up the bill.  What's wrong with this cycle?

That, so far as I can tell, has been the pattern in too much of this sector of higher ed.  Don't know if Corinthian can be tarred with this brush or not.  But I have no sympathy for it or the for-profits as a group.  Even mega-University of Phoenix has been repeatedly in difficulties due to alleged violations of federal law with regard to paying admissions recruiters incentives to bring in more and more students and other regulatory faux pas.

My conclusion: profit has no place in education, either at the K-12 or the college level.

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