President Obama cracks down on for-profit recruiting of veterans.
April 27, 2012 12:28 PM   Subscribe

Today, President Obama signed an executive order which places stricter disclosure requirements on recruiters for for-profit schools looking to recruit veterans and soldiers. The move comes amid growing concern among state and federal legislators that for-profit educational institutions are doing more harm than good and are employing predatory recruiting practices especially on veterans who are exiting the military and looking to improve their education through the Post-9/11 GI Bill.

The order itself can be found here.

This quote from the Army Times link lays out the order's bottom line:
Obama’s order requires schools receiving the GI Bill or other Defense Department-funded veterans educational benefits or tuition assistance to disclose more information to students using military tuition assistance, including a breakdown of the percentage of service members and veterans who complete courses or degrees, according to White House officials.
Among the order's other highlights, again from Army Times:
  • Schools that receive GI Bill or tuition assistance will be required to have academic and financial counselors for service members and veterans and to ease policies for enrollment, re-enrollment and refunds if military-related duties interfere with classes.
  • The government will attempt to trademark the term “GI Bill” so unscrupulous institutions will be prevented from using the name in advertising and on websites.
  • Schools with overly aggressive or unscrupulous recruiting practices will be barred from military bases, blocking access to prospective students.
  • A centralized complaint system will be created, with access to investigators, prosecutors and policymakers who enforce the law and regulations.
  • Schools that fully comply with federal rules will be listed on a federal website, such as the Veterans Affairs Department’s GI Bill website, while schools that don’t comply will be excluded from listings.
Might this be the beginning of a wider government crackdown on for-profit higher education?
posted by Scientist (52 comments total) 10 users marked this as a favorite

 
Great post - and hopefully the beginning of greater oversight of for-profit (only) higher education.
posted by glaucon at 12:34 PM on April 27, 2012


The government is concerned about predatory recruiting practices? Huh.
posted by xedrik at 12:36 PM on April 27, 2012 [1 favorite]


There was a story in Harper's about this a few months ago; not the executive order but the for-profit school as predator thing.
posted by danep at 12:37 PM on April 27, 2012


The government is concerned about predatory recruiting practices? Huh.

"...whose job is to eliminate all monopolies but its own..."
posted by Reasonably Everything Happens at 12:38 PM on April 27, 2012 [1 favorite]


[Please do not instantly derail the thread. Thank you.]
posted by cortex at 12:55 PM on April 27, 2012 [9 favorites]


Education is one of the clearest examples of an 'enterprise' that, when left to the Profit-Making Sector, turns totally to shit.

I'm just glad the most predatory of government enterprises, the military, is doing less cringeworthy recruiting these days.
posted by oneswellfoop at 1:05 PM on April 27, 2012 [3 favorites]


The community college thing Pres. Obama announced the other day is also a huge shot at the For-Profit education guys. All steps in the right direction. Force them to compete directly and on even terms with non-profit/state owned entities and you'll see the argument for-profits can do it better and cheaper is basically hogwash.

Actually it'll force them into adverse selection and the default rates will get even higher.
posted by JPD at 1:18 PM on April 27, 2012 [2 favorites]


The government will attempt to trademark the term “GI Bill” so unscrupulous institutions will be prevented from using the name in advertising and on websites.

And here's the application, filed March 30.
posted by schoolgirl report at 1:19 PM on April 27, 2012


This is a good move. The for-profit education industry is mostly a racket.

Frontline put together a really good report on the subject, for anyone wanting more background on the subject, even if it's a little bit dated.
posted by triceryclops at 1:24 PM on April 27, 2012 [1 favorite]


The government will attempt to trademark the term “GI Bill”

And life gets a little bit harder for everybody in the Army named William.
posted by Faint of Butt at 1:28 PM on April 27, 2012 [5 favorites]


I attend community college where a lot of students are veterans. They're usually young (early to mid-twenties), usually recently returned from Iraq or Afghanistan, and they're paying for their tuition with the assistance of the G.I. Bill.

My community college held a transfer fair with a variety of regional, good-name schools attending. As I walked around the room, I was solicited by a school offering free undergraduate tuition (?!) — a school that I was aware was for-profit, and whom I had heard created their unaccredited undergraduate program for the sole purpose of funneling students into their unaccredited law school.

I was furious.

I received an email from my community college a little while later, asking for feedback about the transfer fair. I laid into them for signing off on a for-profit school putting up a table beside accredited, reputable schools, and allowing the for-profit school to prey upon vulnerable students — many of whom are already in debt, and are scared to death about going more into debt — by saying "we can offer you FREE UNDERGRADUATE TUITION!!!!!!!!" without noting that their school is effing unaccredited.

... Long story short, I like this new order and I hope it has the intended effect.
posted by hypotheticole at 1:31 PM on April 27, 2012 [3 favorites]


An important aspect of this story: the President more and more frequently is using signing orders to get things done and no loner allowing a GOP congress to stalemate the nation's needs.
posted by Postroad at 1:32 PM on April 27, 2012 [12 favorites]


I was not surprised to find for-profit universities on this list of top ten fastest growing American industries. Targeting veterans and their families is one way they've achieved that. Lying about job placement is another.
posted by Toekneesan at 1:34 PM on April 27, 2012 [2 favorites]


And the Frontline episode on for profit colleges ("College Inc.") that Triceryclops linked to is excellent. It's also available via Netflix streaming. I highly recommend it!
posted by hypotheticole at 1:35 PM on April 27, 2012


I used to work at a charter high school for very poor, at-risk kids, and those for-profit schools would come recruiting all the time. I have no idea why the administrators would allow them. They'd make outrageous claims to the kids about the great jobs they'd get, while offering less than a community college, for about $13K per semester, oops I mean "financial aid covers it all" so they "don't have to worry about tuition". How do those people sleep at night???
posted by Neekee at 1:35 PM on April 27, 2012


How do those people sleep at night???

With the aid of horse tranquilizers and laying on a large pile of money.
posted by Talez at 1:39 PM on April 27, 2012


Good! They should also force would-be financial advisors to be more forthright and honest about fees and other ways that they're trying to line their pockets with soldier's money.
posted by rmd1023 at 1:42 PM on April 27, 2012


Lying about job placement is another.

Accredited schools never, ever do this.
posted by anigbrowl at 1:51 PM on April 27, 2012


Accredited schools never, ever do this.

No. But not all not-for-profit schools do. All for-profit schools do.
posted by JPD at 1:53 PM on April 27, 2012


I'd want to see proof for that. And no, I'm not invested in any for-profit education companies.
posted by anigbrowl at 1:57 PM on April 27, 2012


I'd want to see proof for that. Go talk to their recruiters. They're smart enough not to put it in print.
posted by Neekee at 2:06 PM on April 27, 2012


Obviously you aren't going to find that in print. What you will find is marketing docs all over the place and you will find placement data.

Look I don't understand what argument there is for "For Profit Education" as its formed today. The industry exists to defraud taxpayers. At one point they offered distance learning programs that were overpriced but at least filled a niche, a low ROI for consumers niche, but a niche none the less. That's not even the case anymore.

Right and work through the logic of why For-profit should be able to make money if what they sell is essentially commoditized. They've got higher capital costs and their instruction costs aren't much cheaper than a community college is. I mean that's the competition, not a low end 4 year state school. The only reason why they make money is because they aggressively market themselves and government financing to an adversely selected cohort.
posted by JPD at 2:22 PM on April 27, 2012 [1 favorite]


There is definitely some fudging in the job statistics area for nfp schools as well (cough*law schools* cough), however since they report it as part of a basis of their federal funding, there is some government audit capabilities, so at least there is some oversight.
posted by Think_Long at 2:23 PM on April 27, 2012


I am very glad to see this. Not only does the for-profit industry need some attention, but preying upon veterans is especially reprehensible. An awful lot of these guys come home with more than enough baggage to begin with. That there are people out there looking to screw them out of their educations is abominable (to say nothing of the same predation on low-income civilians...).

(Full disclosure: GI Bill + working + living w/Mom for a couple years = debt-free bachelor's for me, but I got out before 9/11. It's a much burlier GI Bill these days.)
posted by scaryblackdeath at 2:24 PM on April 27, 2012


I am shocked to see the words "for-profit" and "predatory" in the same sentence!
posted by DU at 2:26 PM on April 27, 2012 [1 favorite]


Someone needs to go after ITT tech. I have no idea how what they're doing is not prosecutable as fraud. In any other business, if you made the promises they make, and deliver the crap product at the enormous prices they charge, they'd have been behind bars years ago.
posted by MrVisible at 2:39 PM on April 27, 2012


There was an attempt earlier this year to curtail the for-profit education industry that Republicans shot down. I'm sure this is routing around that in a limited way.
posted by idb at 2:41 PM on April 27, 2012 [1 favorite]


Obviously you aren't going to find that in print. What you will find is marketing docs all over the place and you will find placement data.

And the same is true of accredited law schools. You made the claim that all for-profit schools are lying about this, so it's on you to back it up. After I took the LSAT I got a lot of offers from different schools trying to tempt me to attend, some of them operated for profit. Some struck me as shady, some as up front and fairly honest.

Look I don't understand what argument there is for "For Profit Education" as its formed today. The industry exists to defraud taxpayers. At one point they offered distance learning programs that were overpriced but at least filled a niche, a low ROI for consumers niche, but a niche none the less. That's not even the case anymore.

There are quite a few law school in CA that do that, at prices ranging from $3k to $10k/year. An ABA accredited school costs a minimum of $30k a year. I have to say that accredited educational establishments seem to be taking an awful lot of money from taxpayers as well. A law professor at a good school can make $300k a year, which is more than anyone on the Supreme Court. And there are lots and lots of law professors. Considering that the median law school tuition amount is something like $40k per annum and the fact that there's a large oversupply of law school graduates with no jobs, I think it's kind of a pity that a few students can't get together and hire their own Harvard graduate - five students paying $20k a year could save money on tuition fees and a successful graduate of a top school would have 3 years of steady employment at $100k a year, which would work out better for everyone involved.

It's not that I think for-profit schools in general are a good thing; many of them are predatory and exploit the hell out of their students. But I object to the notion that there is something wrong in principle with making money out of education. There are plenty of highly paid people in public education and they're allowed to make profits in the form of salaries, book revenues and so forth. The President of the University of California takes home close on a million a year.
posted by anigbrowl at 3:07 PM on April 27, 2012 [1 favorite]


This part of a larger call for more accountability from ALL colleges and universities, which is an excellent thing. While people are starting to realize that a four- (or five or six) year degree doesn't guarantee a job, there are still an awful lot of people buying that. Two-year AA degrees in a high-demand professional training programs do as well, if not better than the jobs that many 4-year degree holders get. Now, it's true that salary isn't the sole metric for success, but financial independence and stability are pretty important.
posted by smirkette at 3:22 PM on April 27, 2012 [1 favorite]


Saying the way for-profit education is structured in this country is fundamentally predicated on conning taxpayers isn't remotely the same thing as condemning academics who make "too much" money.

Explain to me how the economics of for-profit education can work? From a capital cost perspective they are at the wrong end of the cost curve. From a cost of teaching perspective they actually aren't that different from community colleges - so you are left with admin costs - that's where they have to squeeze out the difference. Instead what they've done is ramp enrollment as hard as they can knowing that if they just barely skirt the DoE's default rules they can collect loan disbursements and not have to match enrollment growth with costs because the drop out rates are high enough.

For-profit professional schools probably have a shot, because even the Ivies run those programs for profit anyway - hence the 300k law prof salary.
posted by JPD at 4:00 PM on April 27, 2012


If its not clear - my objection to For Profit education isn't because I believe Education must lie in the hands of the state. My objection is to how For Profit education evolved in the US. I also question the original premise before it was distorted by game playing with student lending et al - that for profit providers can actually be a more cost effective approach to tertiary education.
posted by JPD at 4:02 PM on April 27, 2012


I think it's kind of a pity that a few students can't get together and hire their own Harvard graduate...

Maybe I'm misunderstanding you, here. Are you suggesting that instead of attending an accredited law school, a few prospective students should hire themselves a Harvard Law graduate to 'teach them law' for three years? And that this would be roughly—or in any way, really—equivalent to the education they'd get from attending an actual law school?

If I'm misunderstanding your idea, then apologies, and I don't want to start poking holes in that suggestion if I've got you wrong. But if that is the suggestion...you must already know, there are some pretty serious holes waiting to be poked.
posted by cribcage at 4:22 PM on April 27, 2012 [1 favorite]


Explain to me how the economics of for-profit education can work? From a capital cost perspective they are at the wrong end of the cost curve. From a cost of teaching perspective they actually aren't that different from community colleges - so you are left with admin costs - that's where they have to squeeze out the difference.

There are often tax breaks on property that's used for educational purposes, or you can rent space and write off the cost. Some subjects, like the sciences, are very expensive to teach because they depend on expensive facilities; some subjects can be taught via blackboards and access to a library. The unstated assumption behind your argument is that education of acceptable quality (reasonable access to teachers, small enough class sizes to have meaningful group discussions and so forth) can only be delivered at a loss. I see no reason to think so, perhaps because I don't think doing something for profit necessarily entails that the profit-maker aspires to become obscenely rich.

My unstated assumption here, which might help to put my remarks in context, is that I think higher education has become a Veblen good for a great many people, and I say this because discussions of vocational education often seem to attract a good deal of snobbery. People wax lyrical about higher learning as a cradle of critical thinking or becoming well-rounded, but those same people often give short shrift to the idea that many are capable of developing those skills on their own and are ill-served by the obligation to take a bunch of required general education classes if their goal in attending college is to study something specific such as chemistry or anthropology. One reason that for-profit schools are successful is that they promise to focus on specific subjects rather than presenting themselves as a large academic theme park. Coming from Europe, I've always been a bit mystified by this, because over there college don't let you mix and match lots of electives and change your major except in very exceptional circumstances. You're expected to figure out what you want to do during high school or else fulfill the academic entry requirements by examination. When you go to college you go straight into studying medicine or law or chemical engineering or archaeology or literature whatever it is that you want to become expert in. Even if you're studying a prototypical humanities course, you're expected to dive straight into the core material at the outset and graduate within 3 years.
posted by anigbrowl at 4:28 PM on April 27, 2012


Are you suggesting that instead of attending an accredited law school, a few prospective students should hire themselves a Harvard Law graduate to 'teach them law' for three years?

Might not be the most useless thing, given the number of mefi lawyers I've seen declare that accredited law schools didn't do much - or anything - to teach them about the actual practice of law!

I don't know, though, that even that would generate a decent return on their investment, given how heavily the prestige of the school you went to and the connections you make there seem to play into getting a job afterwards. And would you even be allowed to take the bar after such a course? I know some states have an apprenticeship system that still exists, but I think for that you have to work under a certified lawyer.
posted by rtha at 4:29 PM on April 27, 2012


Maybe I'm misunderstanding you, here. Are you suggesting that instead of attending an accredited law school, a few prospective students should hire themselves a Harvard Law graduate to 'teach them law' for three years? And that this would be roughly—or in any way, really—equivalent to the education they'd get from attending an actual law school?

It might be better than the education they'd get at a bottom-tier law school. In California, and some other states, it's still acceptable to study law in the chambers of a practicing lawyer or judge (of at least 5 years' experience), and this idea is regaining some adherents as law schools increasingly turn out graduates with few practical lawyering skills. So while my suggestion is rather tongue-in-cheek, it's not entirely so; an adjunct professor of law can expect to make $90-$100k/year, and currently even the cheapest ABA-accredited law schools charge around $30k/year, so three students can afford to hire one adjunct professor between them. Sure, there are some ancillary costs of running a law school, like maintaining a library, but there's an emerging consensus that something has gone terribly wrong with the traditional law school economic model.

My underlying point here is that for-profit schools have been making inroads because the traditional publicly-funded higher education models are not meeting the needs of the public that well any more.
posted by anigbrowl at 4:53 PM on April 27, 2012 [1 favorite]


The unstated assumption behind your argument is that education of acceptable quality (reasonable access to teachers, small enough class sizes to have meaningful group discussions and so forth) can only be delivered at a loss.

No. That's not an unstated assumption at all. If anything its the opposite of that.

What is an assumption is that if you are in a commodity business (which lets be honest - most of the sort of education these schools provide is essentially a commodity.) and your competitors have a much lower cost of capital than you do (Basically government bonds for the debt funded portion and 0% for the grants) then you can't compete on a neutral playing field.

My underlying point here is that for-profit schools have been making inroads because the traditional publicly-funded higher education models are not meeting the needs of the public that well any more.

There really was a point in time when this was true. I don't believe this is the case now. If it were the case that this is where for-profit schools were mostly making a difference in terms of access to qualified but non-traditional students then you wouldn't see the sort of adverse selection in loan default rates you've seen.
posted by JPD at 5:41 PM on April 27, 2012


There are often tax breaks on property that's used for educational purposes, or you can rent space and write off the cost.
This is an argument for why for-profit education can't succeed on fair terms. They don't benefit from that.

Some subjects, like the sciences, are very expensive to teach because they depend on expensive facilities; some subjects can be taught via blackboards and access to a library.

Costs are basically the same for instruction at a community college or a for-profit school

I see no reason to think so, perhaps because I don't think doing something for profit necessarily entails that the profit-maker aspires to become obscenely rich.

No - but a for profit school has to satisfy a market cost of equity that a not-for-profit school does not.

(And this before we get into the evidence that actually most of the for profit education execs are better paid than their peers in the not-for-profit world)

My unstated assumption here, which might help to put my remarks in context, is that I think higher education has become a Veblen good for a great many people, and I say this because discussions of vocational education often seem to attract a good deal of snobbery.

The issue with this assumption is that most of the actual real founded critique of for-profit education that isn't predicated on "The state must run education" rightfully recognizes that the competition isn't Harvard, its a state run community college or an open enrollment state university.
posted by JPD at 5:48 PM on April 27, 2012


(There are often tax breaks on property that's used for educational purposes, or you can rent space and write off the cost.)
This is an argument for why for-profit education can't succeed on fair terms. They don't benefit from that.


Writing off the cost of rent against tax doesn't seem unfair to me; rent is a business expense, after all.

No - but a for profit school has to satisfy a market cost of equity that a not-for-profit school does not.

Er...if it's publicly held, yes. But I'm not at all sure that this is the most common capital structure for private schools; it's certainly not the only one.

The issue with this assumption is that most of the actual real founded critique of for-profit education that isn't predicated on "The state must run education" rightfully recognizes that the competition isn't Harvard, its a state run community college or an open enrollment state university.

I meant those comments to apply to any 4 year degree with a general education requirement, not just Ivies. European tertiary education tends to be much more heavily subsidized, but also more focused.
posted by anigbrowl at 6:32 PM on April 27, 2012


Er...if it's publicly held, yes.

no. wrong. Doesn't matter how the equity is priced. At some point investors need to generate a return.

Writing off the cost of rent against tax doesn't seem unfair to me; rent is a business expense, after all.
Misinterpreting what I'm saying. The tax deductibility doesn't really matter when you compare cash costs. I don't have a problem at all with any legit cost being tax deductible. I don't think the for-profit education guys are particularly guilty of evading taxes. Rather the issue is non profit providers don't pay taxes anyway.

I meant those comments to apply to any 4 year degree with a general education requirement, not just Ivies. That was said in the context of education as a Veblen good - something I agree with. The reality is that even when it comes to providing vocational education the for-profit schools are at the wrong end of the cost curve.
posted by JPD at 6:41 PM on April 27, 2012


When you go to college you go straight into studying medicine or law or chemical engineering or archaeology or literature whatever it is that you want to become expert in.

This isn't always a plus, though. I majored in one of these subjects and decided to not apply to English universities because I wanted a broader approach to my field and the ability to take multiple languages and so forth. The students I knew at grad school in England were insanely bright but often really did lack a knowledge of other areas of the discipline beyond their subject field. There are times I think it is a huge benefit to have the ability to focus like that, but ultimately it isn't a boon to every student. One of my student workers now was at a maths conference in New Orleans and discovered the field of animation, which is blending her various art talents and mathematical abilities in ways I don't even understand. She isn't American and has implied that it was a serendipitous blending that wouldn't be possible in a math program in her home country.

I'm not completely against for-profit education, but the truth is that there are diploma mills and programs that do suck federal aid without providing real benefits. This is probably true at some non-profit schools, but there are some check and balances to non-profit institutions that don't exist for for-profit schools.
posted by jetlagaddict at 6:51 PM on April 27, 2012


My underlying point here is that for-profit schools have been making inroads because the traditional publicly-funded higher education models are not meeting the needs of the public that well any more.

I agree with you that the publicly-funded higher education models are not meeting the needs of the public that well anymore, but I disagree that for-profit schools meet them any better.

Keep in mind, one of the main criticisms of for-profit schools is that they are scams: that they recruit students using very aggressive salespeople (e.g., "admissions officers" who have quotas to fill and will lose their jobs if they don't convince X number of students to enroll per day), and that rather than teach the academic content more effectively, they consistently lower the academic bar to make sure that their students are passing.

When you factor in the whole package, you're essentially purchasing a degree. Doesn't matter if you don't study, if you don't know the material — they'll lower the bar enough to make sure you can still pass and move on to (i.e., pay for) the next class, because they make more money. And accordingly, it doesn't matter how much cheaper a for-profit degree is than a public or private-school degree, because it isn't an actual education. They're not comparable. For-profit schools like this are unaccredited for a reason.

And I also agree with you that many law schools are putting out graduates who are not prepared to be lawyers. I think that this problem is better solved by a combination of accredited law school education (using a number of different professors who are skilled in a variety of different areas of law) and work experience (which the better law schools offer, and most of the motivated students attempt to utilize).
posted by hypotheticole at 6:57 PM on April 27, 2012 [1 favorite]


no. wrong. Doesn't matter how the equity is priced. At some point investors need to generate a return.

Sure, but a small privately held school need not make a very large profit, and I don't agree with your thesis that there's no way to teach profitably without ripping people off.

Now that there are a lot of diploma mills and useless for-profit schools is not something I disagree with. I just object to reflexive dismissal of the concept of offering education on a commercial basis as an inherently Bad Thing.
posted by anigbrowl at 7:39 PM on April 27, 2012


I think that the problem with running a school on a for-profit model is that it creates an incentive on the part of the administration to prioritize profit over quality-of-education. For-profit schools have fewer checks preventing them from simply lowering standards to the point where anyone can pass as long as they pay, thus turning them into essentially diploma mills. This is what seems to have happened in practice at many for-profit institutions.

At some point they realized that rather than use a reputation for solid educating to attract students, they can make more money if they just lower their standards and aggressively recruit students who aren't qualified (formally qualified, I mean -- their innate ability is irrelevant) for most schools and don't realize that they'd get better ROI by going to an open-admission community college and then maybe making the jump to a state-funded technical institute after a year or two.

They also have an incentive to obscure this fact from prospective students, which is when recruitment crosses the line from aggressive to actually predatory. If you read the articles linked above, recruiters for for-profit institutions had been found to have signed up a number of veterans who at the time they signed their papers had been recovering from brain injuries and who ended up having little recollection of what courses they'd signed up for or even that they had enrolled at all.

That kind of scummy behavior is in the direct interest of the investors at for-profit schools, whereas a non-profit university would gain nothing by enrolling students on false pretenses like that. That's why I think for-profit education is inherently problematic -- it creates a situation where the school directly benefits by exploiting its students for money, in ways that don't really apply to non-profit institutions.
posted by Scientist at 10:37 PM on April 27, 2012 [1 favorite]


Note that I don't think this means that it's impossible to run an effective school on a for-profit model. I do however think that they need to be much better regulated in order to prevent the kind of abuses we have seen from continuing to occur.
posted by Scientist at 10:38 PM on April 27, 2012


It might be better than the education they'd get at a bottom-tier law school. ...three students can afford to hire one adjunct professor between them.

I'll admit, I got into my first-choice school so it rings a bit false for me to trumpet the merits of the bottom-tier law schools. But I also seriously considered attending both a third- and a fourth-tier law school. The latter, I visited three times. I sat in on several classes, I talked extensively with students, and I had a few blunt conversations with their dean of career services. I walked away convinced that it's a good school. It would be damn difficult to get a job coming out of there, but it's a good program and I could have gotten a very good education there.

I don't deny that my professional experience backs up the stereotype that lower-tier law schools, when contrasted with higher-ranked programs, tend to graduate lesser-qualified lawyers. But in my opinion, that is attributable more to an input/output relationship than what's happening inside the machine. Pardon the clumsy sarcasm here, but since we're talking on a mostly IT website: The old computer-programmer expression is, "Garbage in, garbage out."

And that's what that brings us back to the topic. For-profit programs don't care about this. Why should they? They aren't looking for qualified students; they are looking for customers.

Case in point: I was watching television just last night and saw an ad for one of the for-profit college websites. It was one of those websites that purports to "match" you with an appropriate program, but of course all the programs are each owned by Kaplan or Phoenix or DeVry, etc. In this commercial, the spokesmodel was explaining the website and she said (paraphrasing), "You'll need to take this short quiz to determine your qualifications." She waved her hand dismissively and immediately said (exact quote), "You'll do fine!"
posted by cribcage at 11:48 PM on April 27, 2012 [1 favorite]


Sure, but a small privately held school need not make a very large profit, and I don't agree with your thesis that there's no way to teach profitably without ripping people off.


Economies of Scale basically make small private for-profit providers unsustainable.

For your second point - OK - explain to me how that happens if the cost curve is the same for state run and for-profit. Its microeconomics.

I just object to reflexive dismissal of the concept of offering education on a commercial basis as an inherently Bad Thing.

No. You still don't get it. Its math - no more, no less. As long as the state has a role in educating people for-profit providers playing by the rules (i.e. actually graduating their students and charging similar tuition rates to the state run providers) - should not be able to exist. I don't have a philosophical issue with for-profit education. It just is not a tenable model.
posted by JPD at 6:47 AM on April 28, 2012


for-profit providers playing by the rules (i.e. actually graduating their students and charging similar tuition rates to the state run providers) - should not be able to exist

This seems to assume sufficient capacity at all state run providers to operate open enrollment; also I can't help thinking that if for-profits are in a double bind here, in that if they don't graduate enough students everyone says they're no good, and if they do graduate students everyone accuses them of being diploma mills. From a microeconomics standpoint, you seem to be treating the education market as one of perfect competition, whereas I'm inclined to think it's more a case of monopolistic competition. Normal (noneconomic) profits would be impossible under perfect competition, I agree. But it doesn't follow that all private operators in a market that includes state actors are necessarily extracting economic rents, although I do agree that that is quite often the case in practice.
posted by anigbrowl at 2:39 PM on April 30, 2012


It certainly isn't perfect competition, but it is a competitive market. It's not remotely monopolistic.

And yes there is sufficient capacity at open enrollment schools. Historically there was not sufficient capacity for non-traditional teaching programs (internet, remote, etc) - but that is rapidly changing.

The problem is that they don't graduate enough students, and the students they do graduate overpaid for inferior degrees.

But it doesn't follow that all private operators in a market that includes state actors are necessarily extracting economic rents, although I do agree that that is quite often the case in practice.

of course it does not, but in those markets where the marginal cost curve is relatively flat (as it is in education) its nearly always the case that a private competitor cannot compete. That's the key to the whole thing.
posted by JPD at 3:22 PM on April 30, 2012


Monopolistic competition and monopoly are not the same thing.
posted by anigbrowl at 9:48 PM on April 30, 2012


yes I'm aware.
posted by JPD at 4:18 AM on May 1, 2012


And the reason why its not monopolistic competition is because for-profit schools are competing with community colleges, not Harvard and Yale.
posted by JPD at 4:19 AM on May 1, 2012


I don't see how that follows.
posted by anigbrowl at 5:21 PM on May 1, 2012


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