By Richard Vedder
I have long criticized traditional higher education for being relatively non-innovative, largely because of subsidies and inadequate incentives not adequately facing the "creative destruction" (Joseph Schumpeter’s term) or "disruptive innovation" (Clayton Christensen’s expression) characterizing dynamic competitive free market capitalism. For-profit higher-education entrepreneurs rightly bristle at the harassment they face from accreditors and government regulators. Five examples below make the case, three pointed out to me by Burck Smith, the innovative head of StraighterLine, and two by Dr. Dick Bishirjian, president of Yorktown University, an online provider.
On the issue of the alleged deficiencies of for-profit providers in providing job opportunities, my ever-valuable side kick Chris Matgouranis gathered data from PayScale.com on the average earnings of graduates of the largest for-profit provider, the University of Phoenix, and compared it with the average earnings of dozens of colleges in the “competitive” category of schools in the Barron’s Profile of American Colleges—mainly mid-quality state and private universities and liberal-arts colleges.
The results show that at various post-degree stages of life, the University of Phoenix graduates on average had earnings that compared favorably with their counterparts at traditional universities. This is not the last word on that topic, of course, and the social and demographic characteristics of the students attending these institutions vary, impacting the results in some indeterminate way. But the notion that there is a “gainful employment” problem with the for-profits that is non-existent in traditional higher education is simply wrong.
With all of this in mind, I note that the Democratic Caucus is becoming increasingly split on this issue, not walking lockstep with the Administration with all of its ideological bias against for-profit business enterprise. The February 22 Rasmussen daily tracking poll gave the President the lowest percent of respondents who “strongly approved” of his performance at any time during his presidency, a point not lost on large numbers of Democrats up for reelection in 2012.
The War Against the For-Profits is not going too well for the aggressors, the Obama Administration.