Proprietary Colleges Bullied by Government

Several times during my tenure in the House of Representatives, then-Speaker Newt Gingrich found reason to illustrate a point he was making, by recounting a story attributed to Albert Einstein. According to Newt, when the famed physicist was asked what he considered "the most powerful force in the universe," he replied "compound interest."

While I hesitate to take issue with one as renowned as Albert Einstein, I think he was wrong. In my view, the most powerful force in the universe is not compound interest, or even the forces of atomic particles the study of which won Einstein the Nobel Prize. If you ask me, the most powerful force in the universe is the force of the status quo.

Think about it. Can you recall any program instituted by government that was totally de-funded and abolished? And, is it not easier to move a mountain than to have one organization accept competition that might upset the status quo of its monopoly.

Thus it is with the escalating war of words and dollars between traditional (that is, status quo) universities and colleges and the “new kids on the block” — proprietary or for-profit colleges.

Considering the vehemence with which the federal government and others are bashing proprietary schools, one might think these institutions were serving up curricula advocating degrees in terrorism, pedophilia and marijuana cultivation.

The reality is that proprietary schools are simply fulfilling a market need by providing many of the same degree programs offered by their more traditional public and non-profit counterparts; but in locations and at times that more conveniently meet the needs of “non-traditional” students. The schools are successfully competing in the market place of academia; and they are upsetting the status quo. For this, they are reaping a whirlwind of regulations and calumny that threatens their very existence.

Two baseball bats with which legislators in Congress and bureaucrats in the administration beat up proprietary colleges, are an undercover investigation conducted earlier this year by the congressional Government Accountability Office; and a 2009 study, also by the GAO, purporting to show that proprietary schools graduate too-few students and saddle them with too-high debt.

The undercover study, in its initial version issued in August, was rife with titillating anecdotes of students being lured into signing up for programs at proprietary colleges by admissions personnel fibbing about costs, job prospects, and graduation rates. The GAO was forced to significantly soften much of the more inflammatory language in the report, and issue a revised version in November. The implied admissions of inaccuracy have caused the credibility of the entire report to be questioned.

The 2009 GAO report was a primary basis on which the Department of Education proposed rules that would severely hamper the ability of proprietary schools to compete with other colleges and universities for access to federally-guaranteed loans. This report claimed that too many proprietary school students graduate with what the feds consider more debt than graduates from other schools. There are sound reasons why this may be the case for many such graduates – they often are members of minority groups, and are already saddled with families and lower-paying jobs that hamper their ability to enter the job market as easily as graduates of traditional schools.

Such facts matter little to those in Congress and the Obama Administration who are busy bullying for-profit schools. More likely what lurks beneath the lofty rhetoric is resentment that these institutions are managed so as to actually make a profit – something taxpayer-funded public colleges and non-profit universities don’t have to worry about. After all, “education” is supposed to be “above” something as crass as profit.

Perhaps the incoming Republican majority in the House will understand that “profit” is not a four-letter word, and that competition challenging the status quo in secondary education is actually a good thing.

by Bob Barr, The Barr Code


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