Monday, August 09, 2010

2 Thoughts on For-Profits

by Andrew Gillen

The GAO report on fraud in the for-profit sector has set off quite a brouhaha. I’ve not said anything about it to this point because 1) I hadn’t read it yet and 2) it doesn’t seem particularly relevant to public policy making.

Regarding number 1, it has become clear that my personal preference of reading a study before being quoted on it is not shared by others. How else to explain all of the sermonizing about the evils of the entire sector with this quote from the report:
Results of the undercover tests and tuition comparisons cannot be projected to all for-profit colleges.
HT: NM. Of course, I could just be a little touchy when it comes to reading a report before commenting on it.

Regarding number 2, the dominant view seems to be “That students were encouraged to commit fraud requires Congress to step in.”

I’m genuinely baffled by this view. My understanding is that in pretty much any other sector, when there is a discovery of fraud, it is dealt with by the legal system. Discovery of fraud only requires action by Congress to the extent that the existing laws governing punishment are too harsh or too lenient.

Why is it different when it comes to for-profit higher education? If there are no laws covering fraud in higher ed, or if those laws are insufficiently structured or enforced, than a case could be made for Congress to get involved, but their involvement should be focused on defining educational fraud and setting punishments. That does not seem to be the intention of those trumpeting this report.

But perhaps I’m totally mistaken about this, and a discovery of fraud involving public monies is sufficient to justify turning off the spigot to the entire sector in question. In that case, I suppose that Congress will finally get around to eliminating farm subsidies because of fraud in that sector.

I understand that this may hurt some states, like Iowa, but hey, their Senator is currently leading the charge to change the way fraud is dealt with by Congress.


Overlook said...

For profit higher ed is a direct threat to the not-for-profits. How dare anyone suggest that higher education should operate in a real world marketplace - rather than a vacuum where ideology and a severe case of group think trumps common sense?

The problem with CCAP studies and commentary is that they are not generally in agreement with the ideology and ethos of the progressives and liberal nut cases so prevelent on campuses today.

This goes to my point on "academic freedom". It only goes as far as how academic freedom is defined by the far left (and further left).

And I'm really overjoyed to know that the "Center for (un)American Progress" is fused with higher ed to assist in political/ideological indoctrination of our young adults.

Universities are entrenched in "Diversity" by race, gender, sexual preference, ethnicity, et al. But by god, diversity of thought (intellectual diversity) is Ausschließlich Verboten!!

I'll have more to say on that in the future. But for now, for-profits are a direct threat to not-for-profit universities for competitive and indoctrination reasons.

Cap'n H said...

The trouble with the for-profits is the marketing modality, as litigation history of the sector's biggest player, University of Phoenix, shows. The marketing is too sales-based, and diminishes whatever sense of service to society on the part of such institutions may be in the minds of the public. There is no denying the validity of the actual education, but how those seats in class are filled is where the real concern lies, particularly at the undergraduate level.

Should there be reform, or limitation on the part of the federal government, it is likely to affect undergrad programs the most. The rigor and validity are there at graduate and post-grad levels, along with lesser risk to the taxpayer, as is evidenced by lower default rates on Title IV loans used to fund such studies.