Market Forces Compel Career Colleges

by Daniel L. Bennett

There is an excellent op-ed in the WSJ today discussing the merits of for-profit education providers and questioning the black sheep portrayal by Democratic lawmakers and the Department of Education. The editorial describes for-profit schools as

"a pretty good deal for taxpayers, especially compared to the state-supported community colleges that they compete against for students. Ohioans have to fund community colleges twice—directly by financing most of their budgets and indirectly through tuition aid. The only state help for career colleges is through tuition assistance."

The author(s) provided several examples of better outcomes achieved at for-profits than community colleges:

For-profit schools also generally do a better job. In Ohio, Columbus State Community College has a 6% graduation rate while Kaplan College Columbus graduates 51%. In New Jersey, Passaic Community College has a 6% graduation rate, while at the nearby for-profit Berkeley College in West Paterson 40% of the students graduate.

Ohio's BOR Chancellor, Eric Fingerhut, was quoted as saying "it is simply untenable for . . . a publicly or privately held company, seeking the maximum return for their owners [to] set tuition in a manner that is designed to maximize the public dollars they receive." I'm certain that the majority of taxpayers hold the opposite opinion.

Not enough people realize that (1) the fastest growing segment of college student is not 18 to 22 year old fresh high school grads, but adults who likely have jobs and/or families and need the flexibility offered by career colleges;
(2) there is a great demand for vocational training that does not require a 4-year degree; and (3) consumers demand for educational services is driven by market forces and guess what, not all consumers want or need a liberal arts education

The WSJ editorial reiterates these points, stating that

"Students who attend career colleges are generally older and often have jobs and families. Taking the time to go to school is a sacrifice and they wouldn’t pay as much as $10,000 a year if they didn’t see a measurable benefit."

This beckons the question of why the current Democratic administration is perceived to be on a witch hunt for proprietary colleges when the market has obviously proclaimed demand for their services. The argument that for-profit educators are diploma mills is as anachronistic as bell-bottoms. So why the push for additional reporting requirements, such as employment placement rates, and regulations that the non-profit and public sectors appear to be exempt from? George Leef may be on to something, stating that

"I surmise that the hostility stems from the political calculation that for-profit schools are not part of the Democratic coalition, whereas non-profit education overwhelmingly is. Steering more students into government-provided education rewards a loyal constituency and helps build the feeling among people that they're dependent on government. That's why the Democrats want to herd everyone into government-run health care."