Friday, January 14, 2011

On for-profit colleges

A fine series of essays (here, here, here and here) at the Chronicle of Higher Education by Peter Wood. I am sympathetic to much of the content but have a couple of thoughts in response:

First, I think Wood fails to make a second important case for the for-profits, which is that they have innovated in tailoring programs to the needs of working students on several dimensions, including timing of classes, highly structured programs aimed at a degree representing marketable skills, absence of "distribution" requirements, easy access to academic and employment counseling and so on. These features are emphasized in James Rosenbaum's work on for-profits. I think the non-profit sector, particularly community colleges and non-research-oriented four-year schools, have much to learn here.

Second, Wood could do more to emphasize that we see the misallocation of resources much more clearly in the for-profit sector because students take out loans to pay for their (much higher) unsubsidized tuition. A student poorly suited to post-secondary education who spends a semester or two at a low-end state four-year institution or a community college also wastes a lot of resources, but much of the cost is diffused among the taxpayers and then only indirectly via the state's post-secondary education budget.

Reducing the amount of resources wasted on students poorly suited to post-secondary education is a fine idea in both sectors, provided it is kept in mind that the optimal rate of non-completion is not zero, and likely varies with the nature of the students and of the programs they undertake.

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