News flash. No one is happy with the new higher education regulations that the Department of Education released a couple weeks ago (and I wrote about last week here).
The career colleges industry — made up of many for-profit universities — didn’t want them. Those seeking to crack down on these institutions say they aren’t harsh enough and don’t have teeth.
Should we be surprised? The Department of Education ultimately had to work out a compromise between two groups with radically different positions. That the new regulations will only disqualify a college from funding its operations through Title IV federal dollars if it fails to meet the new benchmarks in three out of four years means it probably will not be too difficult to game the system — although the Department did craft other restrictions that will curb some egregious behavior.
But ultimately, the Department didn’t change the fundamental and historical value proposition—access—for which it is paying. As I wrote in a paper titled Beyond Good and Evil for the American Enterprise Institute, it’s not all that surprising that that didn’t happen. The reason is because organizations cannot prioritize those things that do not naturally sustain and fit their business models, they will fight vigorously anything that changes that order with a mountain of resources to aid them. If there isn’t a disruptive entrant arising along the new value proposition and the basic service being provided is arguably still important, the government—the customer in this case—doesn’t have much of a leg on which to stand.
Click through for full article text.