Proprietary colleges bullied by government

Several times during my tenure in the House of Representatives, then-Speaker Newt Gingrich found reason to illustrate a point he was making, by recounting a story attributed to Albert Einstein.  According to Newt, when the famed physicist was asked what he considered “the most powerful force in the universe,” he replied “compound interest.”  

While I hesitate to take issue with one as renowned as Albert Einstein, I think he was wrong.  In my view, the most powerful force in the universe is not compound interest, or even the forces of atomic particles the study of which won Einstein the Nobel Prize.  If you ask me, the most powerful force in the universe is the force of the status quo. 

Think about it.  Can you recall any program instituted by government that was totally de-funded and abolished?  And, is it not easier to move a mountain than to have one organization accept competition that might upset the status quo of its monopoly. 

Thus it is with the escalating war of words and dollars between traditional (that is, status quo) universities and colleges and the “new kids on the block” — proprietary or for-profit colleges.  Considering the vehemence with which the federal government and others are bashing proprietary schools, one might think these institutions were serving up curricula advocating degrees in terrorism, pedophilia and marijuana cultivation.  

The reality is that proprietary schools are simply fulfilling a market need by providing many of the same degree programs offered by their more traditional public and non-profit counterparts; but in locations and at times that more conveniently meet the needs of “non-traditional” students.  The schools are successfully competing in the market place of academia; and they are upsetting the status quo.  For this, they are reaping a whirlwind of regulations and calumny that threatens their very existence. 

Two baseball bats with which legislators in Congress and bureaucrats in the administration beat up proprietary colleges, are an undercover investigation conducted earlier this year by the congressional Government Accountability Office; and a 2009 study, also by the GAO, purporting to show that proprietary schools graduate too-few students and saddle them with too-high debt. 

The undercover study, in its initial version issued in August, was rife with titillating anecdotes of students being lured into signing up for programs at proprietary colleges by admissions personnel fibbing about costs, job prospects, and graduation rates.  The GAO was forced to significantly soften much of the more inflammatory language in the report, and issue a revised version in November.  The implied admissions of inaccuracy have caused the credibility of the entire report to be questioned. 

The 2009 GAO report was a primary basis on which the Department of Education proposed rules that would severely hamper the ability of proprietary schools to compete with other colleges and universities for access to federally-guaranteed loans.  This report claimed that too many proprietary school students graduate with what the feds consider more debt than graduates from other schools.  There are sound reasons why this may be the case for many such graduates – they often are members of minority groups, and are already saddled with families and lower-paying jobs that hamper their ability to enter the job market as easily as graduates of traditional schools. 

Such facts matter little to those in Congress and the Obama Administration who are busy bullying for-profit schools.  More likely what lurks beneath the lofty rhetoric is resentment that these institutions are managed so as to actually make a profit – something taxpayer-funded public colleges and non-profit universities don’t have to worry about. After all, “education” is supposed to be “above” something as crass as profit

Perhaps the incoming Republican majority in the House will understand that “profit” is not a four-letter word, and that competition challenging the status quo in secondary education is actually a good thing.

-by Bob Barr, The Barr Code

59 comments Add your comment

Jeff Pruett

December 20th, 2010
6:26 am

I work at a public university and let me tell you; we don’t turn up our noses at money! My concern is that for profit colleges may not be as sound as traditional, accredited institutions. They may not offer the same quality of education and thus, the student will not be able to succeed. Otherwise, let the best service provider win!

Tracy

December 20th, 2010
6:31 am

Not really sure what to call on this one. I do know this though, at my company people who went to “online” colleges have about a 0.00% chance of being hired. You’d honestly have a better chance simply saying you have zero college experience and hope we’re in a mood to take a chance on someone who’d need extra training. I’m sure they’re able of providing a solid education, but it’s too easy to assume “hey, they could have had their friend do all the work or test, who’d ever know ?”

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Jimmy62

December 20th, 2010
7:39 am

What’s ridiculous is that Harvard profits far, far more than The University of Phoenix and their ilk could possibly dream of. The Harvard endowment is like $30 billion, but somehow that’s not counted as profit because Harvard is elite! And half the people who are making the decisions on U. Pheonix went there and aren’t going to attack their alma mater. And lest we forget, the vast majority of people responsible for our financial crisis went to the elite Ivy League schools. Seems like those are the schools charging too much for what people are getting out of them. Bernanke went to Harvard, they should pay reparations to the American people.

sean smith

December 20th, 2010
7:47 am

Bob, I’ll agree that “For Profit” isnt a four letter word when you agree that “Governement” is not a four letter word.

BlahBlahBlah

December 20th, 2010
7:50 am

Funny how Mr. Barr fails to mention the terrible graduation rates at these sham schools, which it the most damaging fact of all.

Pats and Taps

December 20th, 2010
7:52 am

nice einstein ref.

paleo-neo-Carlinist a/k/a Joe the Plutocrat

December 20th, 2010
7:56 am

on one hand, in a truly libertarian, free market the government has not dog in this fight. in addition, “education” (public or private) is still a business. ergo, with so much of the “revenues” of these privtae businesses coming from the government (G.I. Bill, Pell Grants, etc.) the entrepreneurs who’ve built this cottage industry have two choices; submit to Uncle Sam, or refuse to accept ANY government-assisted tuition. it’s no different than State Universities complying with Title 9, ADA or any other Federal Law, in exchange for Federal dollars.

carlosgvv

December 20th, 2010
8:36 am

Scammers are everywhere and you can be sure if they are able to turn a fast buck by suckering students into schools they are not actually qualified for, they will. History teaches that when Government looks the other way, scammers appear like vultures. That’s just the way it is.

f

December 20th, 2010
8:47 am

Proprietary colleges account for less than 10% of student enrollments but receive 25% of federal student aid disbursed. 23% of students at proprietary colleges default on their loans. The rate of student defaults at private non-profit colleges was 6.5%.

Analysts noted that answers on test forms had been tampered with, these tests were to determine student’s capabilities.

When a proprietary school must help students cheat to get federal money, it means those students should not be going to college in the first place. They are unlikely nto get a quality education and have a higher chance of defaulting on payments which will hurt taxpayers and take away aid from other more deserving students.

GreedAbounds

December 20th, 2010
8:50 am

“Proprietary colleges” are to traditional colleges as Life College is to Emory Medical school. Prey on the poor, uneducated and naive student to make a buck. No different than sub-prime mortgages or the pay-day used car business. Anything to honor the profit-motive. It’s the human way, it’s inherent in us all and it’s called greed. It’s bad and it needs to be controlled.

Eric

December 20th, 2010
9:16 am

When I went back to school for my masters degree, I checked into several of the for-profits and found their tuition to be sky-high. Furthermore, they would not provide any assurance for getting a job and would not let me talk to recent graduates about they got their job. So I felt the risk-reward was in favor of the public universities. I’m very glad not to feel “ripped off” by a for-profit and feel that the public university I went to was outstanding and in no way status quo, given the high-quality of research. For the well-being of the majority of citizens, I’m surprised you’d advocate private schools as a solution, Mr. Barr.

Jethro

December 20th, 2010
9:57 am

I went all the way to fifth grade got into medical school and don’t see nothing wrong with that.

John K

December 20th, 2010
10:02 am

Bob Barr: Going down in history as the defender of diploma mills.

onpatroll

December 20th, 2010
10:07 am

Barr is just mad his school; the fake law school he teaches at, is probably one of the schools referenced in the report. Listen, you can’t sit here and chip a long winded BS story. Are you wanting me to believe that the University of Phoenix is a real college? Real colleges offer classes at night. I have taken many myself. So to say they offer class at times real colleges don’t is a lie. Have you seen the commercial saying you can go to college in your PJs? Well you can’t; that makes you lazy and lazy people don’t graduate college; much less get a good paying job and actually keep it.

onpatroll

December 20th, 2010
10:14 am

Lincoln Tech…had a friend who paid 20,000 for a two year degree that’s worthless. you can’t get a IT job with an associates. And he could have got a bachelors’ degree from GSU for half the price that would actually allow him to get a job. Fraud is what it is.

Road Scholar

December 20th, 2010
10:29 am

“the most powerful force in the universe,” ? Stupidity!

Bob, perhaps you were asleep when reading personal accounts of experiences students have had in regards to ‘for profit” colleges. Students did not do the work, did not pass the tests, may not have even attended class, but they passed the course work and graduated? Filling the void in the market? Yeah, if you want to hire unqualified, and uneducated employees! I thought there were already a glut of these on the market, esp in Georgia!

Bryan G.

December 20th, 2010
10:50 am

John K – I assure you that the for profit colleges are a lot of things, but not diploma mills!

I worked at a for profit college as a professor. I was amazed at how uneducated the FACULTY was. It’s just a business meant to shuffle students around and it’s all based on numbers. And, at the end of the day, the education is crappy and no employer takes a graduate from one of these colleges seriously.

I mean, do you know any CEOs who have an MBA from University of Phoenix?

JM

December 20th, 2010
11:02 am

Considering for-profit colleges receive 90 percent of their revenue from federally subsidized student loans, I wouldn’t say they’re being “bullied” by the government. These diploma mills are akin to the banks who extended mortgages to unqualified borrowers, and then sold said loans to Fannie and Freddie, leaving taxpayers on the hook.

point out the obvious

December 20th, 2010
11:10 am

Better question is, can you point out any program that the government has concocted and controlled that has actually worked?

LeeH1

December 20th, 2010
11:13 am

The true education is the fool who went to one of these for profit schools to get an education. They pay a lot of money and get a worthless degree, or more frequently, find out they have to take even more courses to get the degree than was originally required.

At the end, the student has an education in fraud. A fool and his money are soon parted. All the government wants to do is make sure that the tax payers are not paying for the education of this fool.

Criminal Justice Ph.D.

December 20th, 2010
11:18 am

I am a Fenix.

Dr. Pangloss

December 20th, 2010
11:24 am

Figures (not from the government but from College Results Online):

Phoenix U Central Florida

Graduation Rate
Four-year graduation rate 0.8%
Five-year graduation rate 3.9%
Six-year graduation rate 14.1%

Phoenix U–Bay Area

Graduation Rate
Four-year graduation rate 2.6%
Five-year graduation rate 4.9%
Six-year graduation rate 14.4%

Phoenix U–Chicago Area

Graduation Rate
Four-year graduation rate 2.4%
Five-year graduation rate 2.4%
Six-year graduation rate 8.2%

Need we go on?

Dr. Pangloss

December 20th, 2010
11:30 am

point out the obvious
December 20th, 2010
11:10 am

Better question is, can you point out any program that the government has concocted and controlled that has actually worked?
———–
How about winning WW1, winning WW2, putting a man on the moon, building the interstate highway system, the TVA, the REA, the WPA, and so on forever?

“Libertarian” is a synonym for “seriously deluded.”

Michael

December 20th, 2010
11:41 am

Stop government gauranteed student loans then the problem would quicky go away!
The for profit schools that actually depend on these low graduation rates and govt loans for their survival would vanish. The ones that offer a good value and instruction will prosper. This is very similar to Fannie and Freddie and our current housing mess.

killerj

December 20th, 2010
12:03 pm

Wikileaks says it all,its all about money the tax payers foot and how much they can extort from people who are unaware of being drove in one direction to serve a higher class? Go Tea Party,someone needs to check out Harvard at what they are teaching behind closed doors,sound familiar?, its no longer “We” the people who choose to do as they want,its “you have to do it this way or else”proven by the heath care scandal and Goldman & Sach,s robbing this country blind to its core,take away the money and the door,s will open to see who is there, 10 to 1 who you thought was in your best interest is not.

John K

December 20th, 2010
12:15 pm

Bryan G. do you know what “diploma mills” means?

Daniel

December 20th, 2010
12:34 pm

Sorry Bob, but taking in $25-billion a year in federal student loan money brings federal oversight.

If the for-profits want to be taken seriously, they need to provide a quality product and use their taxpayer subsidies responsibly (or not at all). So far, they’re not doing either.

Big Jim

December 20th, 2010
12:49 pm

Yet another swipe at our Government. Imagine if Bob Barr and others were MUSLIMS taking daily swipes at the US,constantly questioning America, stating their lack of confidence in OUR GOVERNMENT. They would be called TRAITORS! Stop this crap. Weak minded individuals adopt what you say just as they accept what limbaugh(high paid nazi,allowed by the FCC to operate….where is this BIG government to stop this guy?). When Michael Powell was head of the FCC, Bush’s “little government” allowed him to do what he wanted(remember janet jackson was going to get in trouble, but not justin timberlake). Michael Powell=Colin Powell’s son.

I guess that’s what conservatives/libertarians mean by “family values”.

Ronan

December 20th, 2010
12:51 pm

Sorry Bob, the “status quo”, while debilitating, is nothing compared to compound interest. The problem is everyone has been conned into you’ve got to have a degree to succeed. Education is just another business model, selling its widgets. I’d have to agree with Ben Stein, the value of a four year degree is questionable, at best.
People come out of college with massive debt and then can’t find a job because your philosophy major is in limited demand.

On average, in seven years, the vast majority of workers are in a field other than what they were trained in at college.

Big Jim

December 20th, 2010
12:54 pm

Ronan

Bulls-eye!

Grob Hahn

December 20th, 2010
1:02 pm

Since I was suckered by a private college I can’t help but agree. Among the many things I was promised was the services of their placement office which boasted over 90% placement. I was also told that my student loan was locked in at a repay of $50 per month. I was too foolish to realize this was $50 per month per loan and I had 8 loans by the time I graduated. Some say I got off light with only $12,000 in loans, but it still took me a while to pay it off. The placement office put me in a basement surrounded by asbestos warning signs and other nerds arguing about code segments for slightly less than I made working for Circuit City. What I didn’t know about the placement office was that they weren’t part of the college, they were a contract agency who could easily boast 90% placement when some of the “jobs” were only 2 weeks long. The only way I would suggest anyone get a degree from a private college is to take their lawyer along for every sliver of paperwork. I will not say that my degree was worthless, but technologically I hit the market behind the curve and it took years to catch up. I was also put out that I would have to buy 2 books for some required courses only to find that they were written by the “professor” and in many cases they were little more than local business and professional people moonlighting since they were stagnant in their own careers. So I have a degree that’s augmented by the advice of people who fell behind in their own lives. Until that industry develops REAL standards and weeds out the mills I’m not going to hold them with any more regard than I have for pawn brokers.
Grobbbbbbbbb

Jefferson

December 20th, 2010
1:30 pm

Those who don’t understand compound interest, pay it — those who do, earn it. You can’t get ahead until you get even.

bob

December 20th, 2010
2:25 pm

If the traditional colleges are so against these for-profit schools then why don’t more of the traditional colleges give people an opportunity to get the same degree in night school that they give in day school? Most traditional colleges offer night classes but there is often restricted degree programs offered for night students. Why is that? Why is it that most traditional colleges do not offer the full range of their services for night students? Most people can’t afford to quit their jobs to go get an good education during the day.

point out the obvious

December 20th, 2010
2:52 pm

Dr. Pangloss –

Hmmm…..not exactly what I had in mind, as well you know. But you do make my point for me. The liberally deranged left cannot cite a single entitlement program that has succeeded.

Mishap

December 20th, 2010
3:03 pm

bob,
Going to night school to get a degree in comparative women’s lit doesn’t seem like a great way to increase one’s income and a lack of demand would doom any regular school attempting it. Core majors and vocational education are widely available at night. What majors do you not see being offered at a traditional/community college that give for profit schools a legitimate edge outside of being there for people unqualified to get into any college?

It’s called market segmentation and schools that actually expect you to finish tend to pick and choose majors that add value. There are plenty of vocational programs available at night b/c many non-traditional students are already working and are likely to choose fields of study that advance their careers or move them in a different direction. Getting a degree in philosophy is useless in the day so why bother getting it at night when there are fewer students?

Traditional schools are already strapped for cash these days w/ slashed budgets and providing education to those already on the fringes of qualifying for a college degree so why dig deeper into the unqualified masses where there’s guaranteed failure? Most school administrators dream of having an engaged student population and prepare students for a post graduation career. For profit schools dream of inventory turns and cost minimization by stuffing as many bodies into a classroom (or webpage) as humanly possible. Traditional education is far from perfect but for profit hasn’t demonstrated its ability to teach students any better or any cheaper.

Ezra

December 20th, 2010
3:45 pm

The only institutions of learning are those that teach a skill. This is not the choice of many of our college students. It is simply to memorize information for a test and dump. The degree hanging on the wall automatically entitles you to a good job, regardless of performance. That degree will get your that position regardless of motivation. That degree will hang on the wall regardless of who has to pay for it. Look at our economy! Was it not degree holders that got us into this mess and they profess to be wise? For profit schools are the recipients of government college funding. Of course it going to be expensive. It is free money right? Traditional education infers hard work and values. In liberal control, Traditional education is doomed.

rockconner

December 20th, 2010
5:08 pm

Barr is goofed on this one. The Feds don’t want to give guaranteed loans on college programs that profit corporations but not students. I would argue against federally guaranteed student loans for anyone, but certainly they should be limited to those attending legitimate schools (see Dr. Pangloss’ entries above).

Jethro

December 20th, 2010
5:13 pm

Big Jim … why don’t you get on your carpet and fly back to sandtown.

Dr. Pangloss

December 20th, 2010
5:32 pm

Point out the Obvious, let me point out the obvious: between 1959 and 1970 the number of people below the poverty line dropped from 40 million to 25 million because of the programs championed by JFK and LBJ. That’s a helluva success. Many poor kids were able to go to college and go on to productive careers because of things like NDS loans. The list simply goes on.

Pats and Taps

December 20th, 2010
6:17 pm

Speaking of Einstein, many have attributed a certain vague definition of insanity to Einstein. It’s concerns the evolution of expectations and the willingness to change approaches to problem solving. Einstein was not really trying to set new criteria for insanity at all. He was judging the soundness of quantum physicisists who insisted that the same experiments can yield different results and still be valid evidence for the underlying theries of quantum physics. Einstein didn’t like that. His ego got the best of him. “God does not play dice with the universe”.

AtOddsWithBob

December 20th, 2010
8:21 pm

Read all of the above responses. Very few agree with Impeachment Bob. So what’s up with Bob? He can’t be as naive as he writes can he? Help us understand Bob. Talk to us. Thanks.

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Ronan

December 21st, 2010
7:39 am

I was on the treadmill at the gym yesterday afternoon and saw no less than 8, yes 8 different on line schools advertised in the course of an hour.
I do have a question. Why is is that from k-12 that very few of the children are learning a job skill?

They can only attain training for a job skill by paying a state supported or private school?

Something is horribly wrong with the education system in this country and the people that are in power don’t want it to change, as they would lose their job.

ATF

December 21st, 2010
10:17 am

I don’t want my tax dollars going to for profit schools. That is the answer for me. If the for-profit schools are so good, it is fine with me if they exist. But they have to prove themselves every day in the market place without my tax dollars assuring them of a profit. It is like bailing out banks and Goldman Sachs for them to depend on tax dollars to exist. If they really are that good they will make it. If they aren’t, they will fail.

And, yes, it is an uneven playing field with public supported government-run schools. Fine with me. I have read the stories of the for profit schools who have less than half the kids make enough money to pay back the loans they took-out to get the education. It is a sham, a shell game. I think the school should be stuck with the unpaid loans, not you and I, who subsidize a lot of those loans because they are government guaranteed.

Finn McCool

December 21st, 2010
12:51 pm

These are diploma mills plain and simple. Ask around. Do a google search on what actual hiring managers think about these degrees.

Most will tell you, they see these degrees on resumes and throw the resumes out. Worthless. I’ve heard IT managers say they might as well assume the person has NO degree when they put that on a resume.

It pays to research any school before you register and send your money to them.

Finn McCool

December 21st, 2010
12:51 pm

If they are for profit, why can’t they get by without our tax dollars?

Big Jim

December 21st, 2010
12:55 pm

Jethro

December 20th, 2010
5:13 pm
Big Jim … why don’t you get on your carpet and fly back to sandtown.

Excuse me? Really? Kudos to all of the readers that didn’t jump on this guys’ team with this one.

Big Jim

December 21st, 2010
12:59 pm

Would DeVry fit into category?DeVry sucked me dry in the ’90’s. Why have they expanded since then? Why hasn’t the “BIG BAD GOVERNMENT” shut these guys down? Maybe they’re “paying” their way into the game. Maybe Bob Barr doesn’t think these rip off artists deserve to be taken to task.

Thank Libertarians!

point out the obvious

December 21st, 2010
1:27 pm

Wrong again, Doc. U.S. poverty is at it’s highest peak this year since, care to guess? 1994, yet another year where we had a Dem President and Congress. Care to try again?