Upon learning he and the rest the Omega Fraternity were being
expelled from Faber College, John Belushi’s character in the 1978
film Animal House elicited audience laughter with the line
“Seven years of college down the drain!”
The fact of the matter is a sizable percentage of students
in bachelor degree programs do not graduate in four years.
According to statistics
from the U.S. Department of Education, nearly 43% of students who
enroll full-time in a 4-year bachelor degree program fail
to graduate in six years. The graduation rate also varies
by race and gender. The Ed Dept does not make available data
break-down based on socio-economic status.
Notwithstanding this reality, the Department of Education
is fixated only on career colleges. Unlike state-owned public
institutions and private, not-for-profit colleges, career colleges
operate on a for-profit basis. In addition to 2-year, 4-year, and
master’s degree programs, career colleges also include
post-secondary schools that offer certificate, continuing
professional education or occupation-specific education such as
golf academies and culinary, technical and cosmetology
schools.
In November, the Ed Dept
charged ahead with a slew of new rules that would impact the
ability of career colleges to enroll students who rely on federally
backed student aid. The typical career college student is already
in the workforce, 25 years of age or older, minority, oftentimes
single and female, has lower income, cannot rely on family
resources to finance college, and comes from a family without
college degree experience.
In general, the demographic of
the typical career college student is more prone to
defaulting on loans, much like the high loan default rate of
students attending
historically black colleges and universities.
Because of these demographics, career colleges tend to
have a much higher percentage of students who rely on federal
student financial aid that is parceled out under Title IV of the
Higher
Education Act of 1965 (federally insured loans, Pell Grants,
etc.) than do students at public universities and private
colleges.
The most significant of the new Ed Dept rules focuses on
“gainful employment,” an arbitrary standard to determine if
graduates are earning enough income to repay school costs. Schools
whose graduates and former students fail to meet this standard will
be cut-off from enrolling students using such aid.
The gainful employment standard is not only arbitrary but
also applies only to career colleges. Applied to public
universities and private colleges, the same rule would severely
restrict aid to medical, dental, law and engineering school
students as well as students attending some of the most elite
private schools with high enrollment costs.
This narrow focus is justified, claims Education Secretary
Arne Duncan, because career colleges “benefit from billions of
dollars in subsidies from taxpayers.” It is true that career
colleges have student enrollments that more heavily rely on
federally backed student aid than do public universities and
private not-for-profit colleges.
When judging the “value” of for-profit versus
not-for-profit schools one ought to assume a broader approach.
There are trade-offs between for-profit and not-for-profit schools.
Public universities and not-for-profit colleges receive billions of
dollars in taxpayer money — directly in the form of government
outlays and/or indirectly by taxpayer subsidies due to non-profit
status. In contrast, career colleges do not receive government
monies and instead pay taxes to federal, state and local
governments.
These taxpayer subsidies significantly add to the cost of
education. An
analysis prepared by Professor Bradford Cornell of the
California Institute of Technology found that when accounting for
direct taxpayer subsidies the overall cost is an additional $25,000
for a student to graduate from a public 2-year college than from a
2-year for-profit college.
There are other tangible differences between for-profit
and not-for-profit colleges. The extracurricular activities of
college students such as Faber’s Omega House that are prevalent at
campuses around the nation are virtually non-existent at career
colleges.
Briefly scouring news headlines in just one week in
October revealed these campus gems:
• Police find drug lab in Georgetown [University] dorm
room.
• Fraternity pledge’s chant [trivializing rape] raises
concerns at Yale.
• 4 sought in armed robbery on [University
Maryland-Eastern Shore] campus.
• Calif police investigate forcible [Sacramento State
University] campus rape.
• Reports: Alcohol played key role in UW-Stout
student’s death.
• Student robbed on College Park [University of Maryland]
campus.
• Ypsilanti police seek more information on rape of woman
just off [EMU] campus.
• Northern Illinois University locks down dorms amid probe
of student death.
• Police release [Cal State University-Bakersfield] murder
suspects.
• [University of Cincinnati] student
dies in Clifton Heights fall.
• Duke student dies after accidental fall.
• Hall pleads guilty to manslaughter [of Frostburg State
student].
• [Arizona State] students on edge after student
dies.
• St. Ambrose [University] student dies in
accident.
• Fraternity at Radford University has troubled past with
alcohol.
The following incidents occurred during the same week at
career colleges:
• [Insert sound effects of crickets chirping.]
Among the reasons why students choose career colleges over
“traditional” colleges is the expense. The skyrocketing cost of
tuition and other school costs at traditional schools greatly
exceed the rate of inflation. According to a recent report from the College
Board, this year students will have to pay nearly an 8 percent
increase in tuition and fees at public universities and a 4.5
percent increase at private not-for-profit colleges. Runaway school
costs have been the trend for years.
Another troubling new rule taking effect is how the Ed
Dept scores repayment compliance. Career college students who elect
federally approved repayment options that include limited-time
interest-only payments or whose payment is based on post-graduation
income levels are judged to be in non-compliance.
Clearly, the Ed Dept is stacking the deck against career
colleges. This may be due to the
anti-corporate attitude that is prevalent throughout the Obama
Administration. In retrospect, the Administration’s
nationalization of the private student loan industry was
clearly the first salvo.
There may also be elitism
at play regarding what some may view as the pedestrian career
colleges in contrast with the Ivies and other elite programs.
Additionally, this may also represent payback to academia, which
gave
heavy political support to Obama during the 2008
campaign.
Lastly, there is good old-fashioned competition playing
out between the for-profit and not-for-profit college sector.
Public universities have been
losing financial aid dollars to students attending career
college programs.
The Ed Dept’s effort to cut off federal aid to students
attending career colleges has created a backlash in the minority
community. This is because career colleges enroll a larger share of
minorities than do
traditional schools. The National Hispanic Caucus of State
Legislators has urged
the department to reexamine the issue. The National Black Chamber
of Commerce is
firmly opposed to it. And a number of members of the
Congressional Black Caucus have criticized the
rule.
