APSCU Responds to a Posting on The Sacramento Bee

Pia Lopez needs to visit a private sector college or university (PSCU). Or several. If she did, Pia would know that the PSCU sector, which educates roughly 350,000 students in California and 20,000 in the Sacramento Valley alone, is not composed of just a few "good actors." Sixty-nine percent of PSCU students in the area graduate. By doing so, they build a foundation for better jobs, more secure families, and a brighter employment picture all around.

Whether or not Cal Grants funding levels for PSCU students should be limited to the same amounts as those students receive at public community colleges is an interesting public policy question. Why answer it by throwing stones? The question is interesting because public community colleges cost taxpayers, if not students, substantially more to attend-over $25,000 per graduate more in public subsidies. Plus, the outcomes in terms of graduation at community colleges are simply not as good as those at two-year PSCUs.

Using Pia’s numbers, it costs a student $14,280 to attend a two year PSCU versus $2,970 to attend a community college. The chances of graduating are three times higher at the PSCU. Those improved odds are worth a lot. The average annual salary difference between an individual with a college certificate or associate’s degree and a person with just a high school degree is over $6,000. Not adjusting for cost of living increases or salary based promotions, the college credential holder will earn over $200,000 more over a 35 year working life than his or her high school graduate counterpart. Is the difference between the PSCU and community college tuition worth an additional investment to the student? The numbers speak for themselves.

So do the numbers that compare "apples and apples" on graduation rates. PSCUs educate a less affluent student body. A majority of PSCU students fall within 150 percent of the poverty line. These are non-traditional students: more dependent on Pell grants, more likely to be a minority, more likely to be a single parent. And more likely to be knocked off course during a recession or other perturbation in life. When graduating non-traditional students, PSCUs do significantly better than other types of institutions, regardless of degree level.

On borrowing and defaults, economic status is a variable impacting PSCU students more heavily than those attending public and private not-for-profit schools. Again, an apples and apples comparison of similarly situated students at institutions regardless of type shows that default rates are about the same. No surprise: poor people have a harder time repaying loans, no matter where they go to school. While loan default rates need to be managed by all parties involved and brought down to the lowest levels possible, let’s not lose perspective: using current two-year rates, seven percent of all federal student loans go into default. Of all student loans that go into default, PSCU borrowers represent just three percent.

So what about those Cal Grants? Arguably, the California taxpayer is better served by having the student assume a greater percentage of tuition and fees. Enhanced grant funding would provide wider access to more students. The situation is brought into sharper relief by the current cuts taking place in California higher education and the resulting waiting lists for the most in-demand programs. The lost opportunity costs that this situation entails for individuals, families, communities, employers and the tax base overall, combined with an anticipated spike in demand by unemployed and under-skilled workers for social services, is daunting.

Harris N. Miller,
President and CEO
Association of Private Sector Colleges and Universities

Regarding The Sacramento Bee article Head to Head: Should the state cut Cal Grants to students attending for-profit colleges? By Ben Boychuk and Pia Lopez; Posted: Feb. 23, 2011


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