College And The Free Market

In his February 2009 address to a joint session of Congress, President Barack Obama addressed what he called "the urgent need to expand the promise of education in America," promising that by 2020, the U.S. will have the highest proportion of college graduates in the world.

It’s a noble idea. But the numbers are daunting. To reach this goal, we will have to grant more than 450,000 additional degrees each year over the course of the next decade–which will cost, according to my estimate, roughly $7 billion to $10 billion annually.

Our current educational system is a presumed meritocracy. But we all pay to keep it running, even though it is open to few; inflexibility and high costs impede access for many. By contrast, accredited, market-based colleges and universities not only return money to the taxpayer, but provide opportunity and access to quality education for all.

Ten years ago, these for-profit institutions enrolled approximately 1% of the total student population. Today, that number has grown to nearly 9%. The University of Phoenix, which I founded in 1976, currently serves more than 420,000 students. Yet the elements that have made this phenomenal level of access possible are vigorously opposed by the traditional educational establishment.

Private institutions, even those with large endowments, oppose growth because their reputation is based on excluding all but those with the highest test scores and grades. Professors, administrators, bureaucrats and politicians support the status quo because they view higher education as a sorting vehicle, rather than an enabling mechanism. And the graduates, especially from elite universities, fiercely oppose changes they believe might devalue their degrees.

In short, few within the traditional establishment support the sort of systemic reform represented by market-based institutions, which provide broad access to a college education. -John G. Sperling (Forbes)

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