InsideHigherEd has an interesting post detailing a developing battle between the Government Accountability Office and a network of for-profit colleges. For those with little familiarity with the issue, the GAO accused the colleges of securing federal loans for their students, which the students were unable to pay back due to their perceived inability to get good enough jobs with the degrees.
In response to this, a for-profit college advocacy group released a report claiming that, “…only 14 findings are credible as written by the GAO out of 65 originally reported (an additional 14 findings cannot be confirmed)”. Intrigued by this, InsideHigherEd compared the new report to a series of long recorded conversations that the GAO also had access to and found out that, unsurprisingly, neither side was entirely correct. The blog found some errors in the GAO report, but also discovered that a few of the counter-report’s claims were greatly exaggerated. The GAO has already responded to the for-profit colleges’ claims, and a protracted battle seems almost certain at this point. How long, how far, and whether or not this will eventually be seen by courts, cannot be known.
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This is really funny. All colleges and universities are for profit. Some disguise themselves as non-profit, but until professors, deans and university presidents are volunteers, there will only be ‘for profit’ educational institutions. And these days, almost all students except the financially elite (due to 47k annual tuition at Cornell) must take loans and forfeit their future salary to pay their tuition. So really it comes down to a financial decision, a very simple NPV calculation where you take the 4 years of tuition negative cash flows, interest rates, and then add the projected future earnings with margins for probability to come up with a positive or negative NPV. Unfortunately, some students are swindled and don’t do a careful analysis to balance the costs with prospective employment. In the end it is the student’s decision to take the loan and choose the school. No one is forcing them to borrow money. Perhaps you can say, students must go to college in order to get a job at all? That’s another can of worms. I call it education inflation. Before you could get a high school diploma, then it was college degree… now its master’s degree… So, isn’t education a business? Are people getting paid to work at universities regardless of whether they call themselves non-profit or for profit?