Thursday, August 26, 2010

Be Careful What You Wish For

by Daniel L. Bennett

The impending gainful employment rule has caused the for-profit sector and its investors a great deal of nervousness. Receiving little notice has been the community colleges that offer certificate programs designed to lead to a specific occupation that will also be subject to the new rule. It appears as though these folks are beginning to fret about the consequences of the proposed rule change as well, as Inside Higher Ed highlights:
Most of the controversy over the "gainful employment" regulations proposed by the U.S. Education Department has focused on for-profit higher education, but some community college programs would be covered as well, and the American Association of Community Colleges on Tuesday sent a letter to college presidents urging them to seek changes in the rules. The community college programs that would be covered are certificate programs of a year or longer that do not lead to a degree. The community college association is arguing that those programs should not be covered if, in combination with general education requirements, the certificate requirements would lead to an associate degree. The community colleges also want to see an exemption for programs in which fewer than 35 percent of students use federal loan programs.
It is somewhat ironic that a sector which often pats itself on the back because its students don't have to borrow much (due to huge subsidies) is worried about the new rules affecting its business. This should raise some questions about the community college sector and related public policy. For one, perhaps its vocationally-oriented programs are not doing a good job of training students for the workplace (despite popular rhetoric) and we should reconsider publicly funding them. Fairer competition would likely lead to improved offerings. We could still publicly support vocational education and retraining programs through a voucher-style program, rather than awarding money non-competitively to one set of service providers who may or may not be best suited for the job.

I also find it rather amusing that the community colleges, which have been somewhat critical and supportive of increased regulation of their competition, are begging for mercy and seeking an exemption from the new rule, especially given the tremendous 'low-price' competitive advantage that they already have as a result of massive public subsidization. The community college sector had a good thing going for it - massive subsidization (and hence protection) with very little accountability. Now that competition has heightened from the private sector in spite of its price advantage, it decided to try to enhance its competitive position further through the political process. Now, that same political process may wind up biting it in the rear. Perhaps this should be a lesson in being careful what you wish for, especially in seeking public favor through the political process.

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