A Response to ‘Student Debt and For-Profit Institutions’

Brian Moran, interim president of the Association of Private Sector Colleges and Universities: Sandy Baum and Michael McPherson say they want to cut through the debate on for-profit colleges and frame the discussion in terms of analysis and evidence rather than ideology. This is a welcome approach which unfortunately they fail to use. Rather, they proceed to adopt a highly patronizing point of view in a discussion that uses sweeping generalizations to advance an ideological argument that is neither supported by analysis nor evidence.

To take issue with some of their points:

  • The authors say private-sector colleges and universities are not and never will be a “textbook” example of competitive markets because they rely on the federal government for revenues. Perhaps not, but education is considered a public good and like many other industries, including defense, health care, and agriculture, relies on the federal government for revenues. Students borrow government money to attend school, but most of this money is repaid. Plus the government receives the benefit of a more competitive workforce, paying higher taxes and drawing on less government assistance;
  • Almost half of PSCU’s have what the authors refer to as “official” student loan default rates over 20 percent. While this is true for the “trial” three-year cohort default rates, the authors fail to mention that the same factors that explain the likelihood to default, such as a preponderance of low-income students, cut across all institutions; so all institutions and not just private-sector institutions serving predominantly low income students have similarly high default rates;
  • The authors claim institutions meeting the needs of their students are a dwindling portion of the PSCU sector. They present this assertion without any empirical basis, using undefined concepts and no analysis. The authors say the rapid enrollment growth in this sector does not reflect informed consumer response to a high-quality product. No evidence is presented to support the assertions about what students know or the quality of the education they receive.While the bias of the authors leads them to conclude that student futures are being damaged by attending PSCU’s, the reality is quite different. Non-traditional students, representing numerous at-risk factors, have a better chance of success at our schools than at traditional colleges and universities. PSCU’s account for a growing percentage of awards, graduate a higher percentage of at-risk students, on average place seven out of 10 graduates in chosen fields of study, and yes, continue to enroll increasing numbers of students;
  • The authors claim that students attending traditional institutions who are worse off than when they arrived are the “exception” but “appear to be the norm” in the PSCU sector. Perhaps in their opinion, which is what this, individuals who graduate from college with employable skills are somehow placed at a disadvantage. Or could it be, as reason suggests, that the disgruntled student is the disgruntled student, no matter where he or she goes to school? Without evidence to the contrary, the exception hardly proves the rule;
  • The authors maintain that publicly traded schools are driven by shareholders to maximize profit. Doing so might be a strategy for short-term success, but long-term profitability is only achievable and sustainable through a commitment to value and quality;
  • Students who enroll in institutions that graduate few of their students are playing the lottery, the authors say. Perhaps, but two-year institutional graduate rates at PSCU’s are three times higher than their public-school counterparts. By the authors’ own reckoning, our schools must be a winning ticket.

We agree with Baum and McPherson that students deserve full disclosure of outcomes, like graduation and placement, so that they can make informed choices. This is true for all students, not just those attending private sector colleges and universities We disagree that students need self-anointed wiser heads in Washington to help them make such choices.

Read the original opinion piece here.


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