Friday, October 09, 2009

 

Cracks

Apparently, it's compare-and-contrast week on the blog.

These two stories from IHE, posted on the same day, are worth reading next to each other. They're both about for-profit higher ed, though they take very different angles on it. The first one notes that a quarter of all the Pell grants in America go to students in for-profit institutions. That's a significant increase over even just a few years ago, and it's revealing of the for-profits' student demographics. The second story notes that where community colleges are relatively well-funded, the appeal to students of for-profit alternatives declines.

To which I say, well, yeah.

As regular readers know, I used to work at a for-profit college. Having moved from that into the community college world, I can attest that both institutions made a point of serving populations that have traditionally been underserved. Both include some civic-minded people who believe their work makes a difference in the world, and both have flaws. I also recall a significant number of students moving back-and-forth between the local community colleges and the for-profit, often taking their gen ed courses at the cc and transferring the credits in to save tuition money. (For whatever reason, I don't ever recall reading a story about that, but it was pretty commonplace on the ground.)

With the public side of higher education taking ritual beatings in the various states, I'm not at all surprised to hear that students are flocking to for-profits. For-profits thrive in the cracks of the nonprofit system. As the system cracks up, the for-profits gain more room to move.

In my days at Proprietary U, the college liked to make a distinction between the 'tax paying' sector -- of which it was a part -- and the 'tax consuming' sector, with which it competed. The labels were always a bit overdrawn; as the Pell grant story correctly notes, if Federal student financial aid went away, so would the for-profit college. (From this side, I'd note, too, that direct support for public higher ed is a steadily declining percentage of our budgets.) I also couldn't help but notice how many of PU's faculty, myself included, came from various graduate programs at the state's public flagship university. Since public higher ed is remarkably good at producing new Ph.D.'s, and remarkably bad at providing jobs for them, the for-profits have a steady stream of applicants for faculty positions. In my darker moments, I recalled reading something about sowing the seeds of one's own destruction.

It was once possible to sneer at the entire concept of for-profit higher education. As recently as the early 00's, I attended the national conference of my academic discipline and saw the disdain on people's faces when they saw my institution on my nametag. But there's a fundamental reason that the for-profits are growing, and will continue to:

Someone has to grow.

The non-elite private colleges are economically unsustainable. Public higher ed is creaking. The elites, by definition, can only ever get so big. But the demand for higher education continues to grow, as the realistic alternatives for a decent living without a degree continue to shrink. (The gender breakdown of the Great Recession should finally put to rest the tiresome Charles Murray-esque glorification of manly male blue collar trades. Those jobs took the worst hits by far over the last year.)

Unlike every other sector of higher ed, the for-profits have a revenue model that allows for -- encourages, actually -- growth. My cc loses money on every student. PU made money on every student. Which do you suppose was more capable of growth?

One of the grand poobahs from Home Office once visited PU and gave a talk in which he referred to PU's "secret weapon: private investment capital." Although that was several years ago, the line stuck with me.

In my preferred world, of course, the public sector would have access to that capital through progressive taxation and the redirection of resources away from voluntary wars. But that doesn't seem to be the direction of things. And public higher ed is too busy plugging holes in the dike to think seriously about structural change.

If you don't like the concept of for-profit higher ed, support generous and sustained funding for the public kind. If you're really serious, condition that funding on basic structural change. Without both of those, traditional higher ed faces the fate of a declining aristocracy losing power to a grubby-but-aggressive rising merchant class. Snobbery doesn't pay the bills. At this point, the cracks reach all the way down to the foundation.

Comments:
Why are the For-Profit schools so attractive to students? My understanding is they are exceptionally more expensive. I think my confusion stems in part from the plethora of technical programs and certifications my own cc offers and highly publicizes, all at a fraction of the cost of the surrounding For-Profits.
 
I know I'm singing to the choir here, but we're all of us--and I do mean ALL--the victims of the idea that taxes are automatically bad that's at the center of US politics.

Low taxes means less access to publicly-funded higher education. If Susie can't attend the local cc or State U because it's full, then she'll go to a for-profit school and pay for it through the nose.

But she'll--or we'll--pay one way or another. There ain't no such thing as a free lunch.

--Philip
 
(1) My cc loses money on every student. EVERY student? I keep waiting for even a vague outline of your college's finances to justify this assertion. Is your tuition as low as the $26 per credit they have at Delta College (featured in Wednesday's blog)? Or are you using the salary and benefits of a full-time professor (a sunk cost) to figure the profit/loss of enrolling additional students who will be added to a full section or taught by an adjunct? Please explain.

At our college, the tuition part of our per-credit charge will cover the salary of the adjunct teaching an extra section even if the class is only half full. Adding extra students is profitable, and we push retention and recruitment for that reason.

(2) Please blog about the SPECIFIC structural changes you think should be mandated by the legislature in exchange for restoring state funding of public higher education to the levels seen in the 1960s and 1970s, and how that would result in improved educational outcomes.

From where I sit, every mandate applied to public higher education has come with broken promises and a budget cut, so I see no reason to expect future promises to be fulfilled.

(3) Tendentious statements implying that both World War II and the war against Al Qaeda in Afghanistan and Pakistan were "wars of choice" are getting a bit old. There are many people who oppose the war in Iraq but support the war against Al Qaeda. Someone who argues regularly about "category errors" should know the difference between attacking someone who sinks a naval warship and attacking someone who is a jerk.
 
I didn't see WWII mentioned or implied as possibly part of the discussion.

This puts aside the absurdity of believing that anything the Bush Administration did under any circumstances was conceivably aimed toward improving the American security situation.
 
It was implied when Dean Dad failed to exclude the war against Al Qaeda from his category of "wars of choice". If you don't know why, read my blog on 10/12.
 
At this point, I'm so disgustedly horrified by the Bush Administration that everything they've touched has gotten this slimy coating of suspicion.
 
CCPhysicist -- Hitler? Really?

Shame on you. Cut that shit out, or you're banned from the blog. That's not just false or absurd; it's off the charts.
 
Well Dean Dad, I would like to hear more about why your CC loses money on every student. I work at Woebegone State (an R II) where the students pay their way in terms of facilities (dorms, IT services, student programs & union), but the instructional costs (including faculty and support staff salaries) and physical plant are generously subsidized by the state.

I do think you are right about the inevitable rise of the for-profit university. They will be the mice among the dinosaurs when it comes to public schools. I think CCs and the regional comprehensives will eventually be privatized, and the only the big flagships will remain notionally 'public.'

All public institutions have been treading water courtesy of the department of education's subsidized student loan program. But as you point out, that money can just as easily go to the for-profits.
 
Sorry if I was too elliptical for you, Dean Dad, but I frankly have no idea why you think I was talking about Hitler attacking US Navy ships.

It was Japan who, like Al Qaeda, attacked US warships and made it abundantly clear that they were at war with us whether we chose to be at war with them or not. The person acting like a jerk (IMO) was Saddam Hussein circa 2002.

You are excused for not having 10/12 on your mind, which is why I am blogging about it tomorrow.

Now, could we get back to education and how your college loses money when it adds students? That is a serious question that, like the one about which structural changes you think would lead taxpayers to again fund CCs and Unis like they did in the past, deserves a serious and quantitative answer.
 
That's a weird question -- if a student takes, say, four classes on average, then five or so students = an extra section of something. If the CC takes in less in tuition and fees from five students than it pays in marginal costs for hiring for one more class, it loses money on a per-student basis.

Since CC tuitions can be as low as $150 for a 3-credit class, that's trivially possible.
 
Punditus, I'd hope that our enrollment management is better than that! But what if you get 100 extra students and open up 3 sections of those four classes taught by adjuncts making your typical wage?

That is what I blogged about today. At our college, we turn a solid profit and will do so even if managers guess wrong and some extra sections are less than half full. At Delta, it appears that they will lose money with 33 in a class, and probably lose money if the classes were at full capacity.

I assume that is what Dean Dad was talking about: a CC where tuition is only $78 (total) for a 3 credit class and you lose money even when the sections are full. Until last week, I had no idea that was possible, let alone the norm in a state as big as California.
 
One of the things the for-profits do is play fast-and-loose with numbers. One came by my high school to talk to students and shows that their school was cheaper than university. They had compared their tuition to the tuition and residence costs of a university — take out residence costs for university and it was cheaper.

This is before you look at the extra things university provides (health coverage, dental plan, fitness facilities), and the more-rounded education you get. Not to mention that a diploma from the for-profit would have kept you at a technician level, while a degree would have opened up management positions.
 
Also, these decisions are much more granular than that -- it's very easy to make money on a marginal student or two but lose money if fifty show up.

Or make money on 20 and lose on 200, etc.
 
State funding for higher education is just as important as the private institutions. We really need both to sufficiently educate the population. Thank you pointing out the cracks.
 
So much to talk about, to include why the knee jerk assumption the CCPhysicist was talking about Hitler, and why the response what to mention BANNING (WOW!)

But no time for that.

What intrigued me the most was the "call to action" at the end of the post. That these for-profit schools must somehow be stopped, in the name of all that is right, and good.

What is the basis for this judgement? DD you have worked for both--what do you see wrong with the "for profit" schools, other than the profit motive itself?

And are you really meaning to compare the faculty that we need to protect with an aristocracy, and the for-profits with the "merchant" class? Do you dislike capitalism that much?
 
C'mon, Anon -- you can tell us you're Glenn Beck. We won't think less of you.
 
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