Thursday, October 29, 2015

The New Yorker Gets One Right

Flood the zone.

The best way to get a handle on the issues in for-profit education is to outcompete it.  Flood the zone with well-funded publics, and the for-profits won’t even be able to cheat their way out.

A tip o’the cap to James Suroweicki, at The New Yorker, for encapsulating the issues around for-profit colleges clearly and well in a single page.  The piece is well worth the couple of minutes it takes, not least because Suroweicki neatly dispatches a couple of widely held, but false, assumptions.

First, the for-profit sector as a whole -- and I’m not talking about every single actor -- lives on financial aid, which is about as far from a market as you can get.  While it has clearly outmarketed its public rivals, at least until recently, it rarely outperformed them.  (The exceptions that exist tend to be at the associate’s and graduate levels.  In-between, not so much.)  

The usual response is either to call for greater regulation, or to try to ban them altogether.  But neither really addresses the underlying problem.  For-profits emerged and thrived in the gaps that the publics didn’t serve, or didn’t serve terribly well.  In the early years, they tended to focus on trades or skills that we don’t usually think of as the domain of higher education.  (DeVry started by training people to run and repair film projectors.)  Later, when they moved into more traditional areas, they still offered different forms of delivery.  They largely ignored the agrarian calendar, for example, running full slates of classes year-round to cater to working adults.  

Squashing the sector doesn’t address the gaps that it filled.  And it may well prevent experimentation and innovation that can later find its way into the publics.  Regulation is better, but it’s a tough sell politically, it’s subject to “regulatory capture” (or the regulators forgetting which side they’re on), and its intensity waxes and wanes when political control shifts.  Besides, when hundreds of millions of dollars are at stake, folks with deep pockets can fund some very good lawyers to beat back anything imperfect.

The way to get the best outcome all around isn’t to ban them or to try to pass lawyer-proof regulations.  It’s to outcompete them  Flood the zone with well-funded public colleges with the staffing, the facilities, and yes, the marketing, to compete.  Force the for-profits to compete on quality.  Frankly, if they can prove they do a better job with students, I have no theological objection to them.  But the experience of the last ten years suggests that if they can only compete on quality, they’ll shrink to a much less threatening size, and students will be better off.  

For-profits met a need.  The way to beat them is to meet that need better.  Austerity in the public sector cedes the field to people with other agendas.  Beef up the publics, and the need that fed the for-profits in the first place will fade away.  They can’t lawyer their way out of that.