The for-profit college industry: An education in moral depravity

[AthenaAwakened]

http://video.pbs.org/video/1485280975/

A link to a PBS Frontline episode on the topic

 

[Jimmy Higgins]

Dateline had a great program about this years ago. The Socialist Commie Obama has done absolutely nothing about it.

ACK!!! I meant Frontline!!! Sorry Frontline.

I also do not recommend watching it right before trying to go to sleep.

 

[doubtingt]

We are talking simple fraud here. You graduate from an accredited school, you have a degree from an accredited school. May cost a mint, but you have a degree that has a particular value in the market. You graduate from a for-profit college, and you have a piece of paper whose value is very unknown and likely to be worthless. So when you advertise that your product will get people jobs, but the school knows that isn't true, we call that fraud... and the US taxpayer is paying for this ruse.

I had a co-worker, pretty good guy, who got his degree from one of these unaccredited places. Got him a job as a manager and he was sitting pretty good (all managers were required to have B.A.s or B.S.s). Wasn't long after that the hospital system required all degrees to be from accredited schools. He could get his degree from an accredited school and keep his job or he was canned. Of course virtually none of his credits would transfer so they canned him.

That's largely a separate issue, except for the credit not transferring which they definitely should not be allowed to. Whether gov subsidized loans are allowed for these kind of schools doesn't mean that anyone with a degree from them should lose their job they already have. Even if the hospital he was at switched to only hiring people with accredited schools, they good grandfather in people who already have jobs they have shown themselves competent for.

On another note, "managing" is probably a job where the school is least relevant since it rarely requires more skills and knowledge that depend upon higher education than the jobs of the people being managed (usually less). Being a manager is often about being an authority, and thus having a superficial degree is sufficient for that perception, even if you know nothing more than those under you. This is about the only thing that makes and MBA a useful graduate degree even from accredited schools.

 

[doubtingt]

Dateline had a great program about this years ago. The Socialist Commie Obama has done absolutely nothing about it.

ACK!!! I meant Frontline!!! Sorry Frontline.

Ah, that makes much more sense, not coincidentally because the non-profit Frontline is far superior in its journalism (which requires honesty and ethics) than the for-profit Dateline.

 

[Underseer]

John Oliver had a great show a few weeks ago skewering the for-profit higher “education” industry.

Here are some of the things he discussed about for profit colleges:

Student loan debt is 3 times higher at these schools than for public college students. The cost is 5 times higher than community colleges and twice as high as 4 year Universities. They spend only half as much on instructors as they do on marketing (i.e., lies and emotional manipulation to get people to make the self destructive choice to attend). They graduate less than 1 in 3 students, which is less than public colleges, and ultimate employment in the profession is very low, even for private trade schools whose sole function is training for a particular profession (under 10% for ITT grads). For profit colleges have formed a coalition organization that spends millions in political lobbying, such as their successful killing of legislation attempting to require them to actually prove their false claims of job placement. They also target military vets with their marketing because this allows them to go beyond the 90% Fed limit in terms of tuition at any school that can be paid via loans (vet loans do not count toward that limit). Schools have gone to vet hospitals to sign up brain damaged vets. The marketers speak about finding people’s “pain points”, which refers to identifying things about which people feel bad in their lives and emphasizing it. During training seminars they illustrate the utility of this “pain point” approach with actual images of Nazi torture.

Oliver spoke with a representative of the coalition organization and asked about the 2:1 spending on marketing versus instruction. They guys response was that it made sense and was just like selling people perfume. The actual cost of the perfume is a few cents, but if you want people to pay hundreds for it, you need to spend much more than a few cents on marketing. IOW, these schools view the higher education they provide like expensive perfume, a useless product of little value in itself that suckers must be manipulated into paying ridiculous prices for via emotional manipulations that are nonsensical in terms of having no relation to any objective qualities of the product being sold.

Why do you hate capitalism?

The profit motive always results in lower prices and higher quality results, therefore your claims about for-profit colleges are obviously a bunch of lies. How can for-profit colleges possibly result in greater student debt and poorer job placement numbers when compared to communistic government-run colleges? Your claims don't even make sense.

It's because of people like you that America now lives under a brutal socialist dictatorship. I hope you're happy about destroying democracy and freedom. [/conservolibertarian]

 

[doubtingt]

John Oliver had a great show a few weeks ago skewering the for-profit higher “education” industry.

Here are some of the things he discussed about for profit colleges:

Student loan debt is 3 times higher at these schools than for public college students. The cost is 5 times higher than community colleges and twice as high as 4 year Universities. They spend only half as much on instructors as they do on marketing (i.e., lies and emotional manipulation to get people to make the self destructive choice to attend). They graduate less than 1 in 3 students, which is less than public colleges, and ultimate employment in the profession is very low, even for private trade schools whose sole function is training for a particular profession (under 10% for ITT grads). For profit colleges have formed a coalition organization that spends millions in political lobbying, such as their successful killing of legislation attempting to require them to actually prove their false claims of job placement. They also target military vets with their marketing because this allows them to go beyond the 90% Fed limit in terms of tuition at any school that can be paid via loans (vet loans do not count toward that limit). Schools have gone to vet hospitals to sign up brain damaged vets. The marketers speak about finding people’s “pain points”, which refers to identifying things about which people feel bad in their lives and emphasizing it. During training seminars they illustrate the utility of this “pain point” approach with actual images of Nazi torture.

Oliver spoke with a representative of the coalition organization and asked about the 2:1 spending on marketing versus instruction. They guys response was that it made sense and was just like selling people perfume. The actual cost of the perfume is a few cents, but if you want people to pay hundreds for it, you need to spend much more than a few cents on marketing. IOW, these schools view the higher education they provide like expensive perfume, a useless product of little value in itself that suckers must be manipulated into paying ridiculous prices for via emotional manipulations that are nonsensical in terms of having no relation to any objective qualities of the product being sold.

Why do you hate capitalism?

The profit motive always results in lower prices and higher quality results, therefore your claims about for-profit colleges are obviously a bunch of lies. How can for-profit colleges possibly result in greater student debt and poorer job placement numbers when compared to communistic government-run colleges? Your claims don't even make sense.

It's because of people like you that America now lives under a brutal socialist dictatorship. I hope you're happy about destroying democracy and freedom. [/conservolibertarian]

To be fair in relation to the bolded part of your sarcasm, I am not sure that public Universities in the US have better "job placement", but they don't really claim to be training people for particular professions.
The point of a "liberal arts" education is not to narrowly train people for specific professions into which they would be placed. That said, countries like Germany do have gov funded professional training schools that are infinitely superior to the US for-profit ones.

 

[Bomb#20]

We are talking simple fraud here. You graduate from an accredited school, you have a degree from an accredited school. May cost a mint, but you have a degree that has a particular value in the market. You graduate from a for-profit college, and you have a piece of paper whose value is very unknown and likely to be worthless. So when you advertise that your product will get people jobs, but the school knows that isn't true, we call that fraud... and the US taxpayer is paying for this ruse.

I had a co-worker, pretty good guy, who got his degree from one of these unaccredited places. Got him a job as a manager and he was sitting pretty good (all managers were required to have B.A.s or B.S.s). Wasn't long after that the hospital system required all degrees to be from accredited schools. He could get his degree from an accredited school and keep his job or he was canned. Of course virtually none of his credits would transfer so they canned him.

And this is the root of the problem. We have collectively chosen to evolve into a society that relies heavily on credentials and practices an enormous amount of credential-based discrimination. That creates demand for fake credentials, just like demand for fake IDs. Griping about the evil purveyors of fake IDs is pointless; so is griping about the evils of the profit motive leading people to sell fake IDs, as though outlawing profit ever stopped people from constructing fake IDs for one another. If you choose to set up a society where IDs are a necessary part of life then you also have to choose whether to go to the effort of making them forgery-proof or to tolerate massive fakery. Likewise, if you choose to set up a society where credentials are a necessary part of life then you also have to choose whether to go to the effort of making them forgery-proof or to tolerate massive fakery.

So there are three obvious solutions. We can (1) tell the University of Phoenix "Yes sir may we have another?", or (2) have our government go to the effort of investigating institutes to see if they're actually training people effectively and stop paying people to go to ones that aren't, or (3) quit canning people for not having degrees.

A good start toward either 2 or 3 would be to separate out the function of training from the function of measuring how well people have been trained. Combining the two functions was all very well when the goal was to create eloquent sermon-givers and a witty aristocracy for our salons, but it's a conflict of interest when admission to lucrative professions is at stake. We already let people test out of listening to four years of high-school lectures; we could do the same with college lectures. I'll bet your co-worker could have passed a test on hospital management.

 

[doubtingt]

I had a co-worker, pretty good guy, who got his degree from one of these unaccredited places. Got him a job as a manager and he was sitting pretty good (all managers were required to have B.A.s or B.S.s). Wasn't long after that the hospital system required all degrees to be from accredited schools. He could get his degree from an accredited school and keep his job or he was canned. Of course virtually none of his credits would transfer so they canned him.

And this is the root of the problem. We have collectively chosen to evolve into a society that relies heavily on credentials and practices an enormous amount of credential-based discrimination.

We didn't choose that, it is the only practical way that countless applicant could be sorted into those likely vs unlikely to have the actual skills required.
Without this, every job would have 10,000 times the number of applicants, and every one of them would need to be directly tested for the required skills, and a valid and reliable and quick and easy to score test would have to exist for all required skills.

That creates demand for fake credentials, just like demand for fake IDs. Griping about the evil purveyors of fake IDs is pointless; so is griping about the evils of the profit motive leading people to sell fake IDs, as though outlawing profit ever stopped people from constructing fake IDs for one another.

Not true. First, loud public discourse about how these schools are scum and clearly have no motive to provide a real education will greatly reduce the people who go to them. Since the existence of these schools increases fake credentials of the sort in question by many times over, this will greatly reduce the % of credentials that are fake. In addition, acknowledging the objective fact that profit motive is scam motive and virtually incompatible with providing a quality education that is what it claims, helps both consumers and government to identify the most likely scam schools giving out fake credentials and thus be extra cautious in going to them or allowing given loans to attend them.


So there are three obvious solutions. We can (1) tell the University of Phoenix "Yes sir may we have another?", or (2) have our government go to the effort of investigating institutes to see if they're actually training people effectively and stop paying people to go to ones that aren't, or (3) quit canning people for not having degrees.

A good start toward either 2 or 3 would be to separate out the function of training from the function of measuring how well people have been trained. Combining the two functions was all very well when the goal was to create eloquent sermon-givers and a witty aristocracy for our salons, but it's a conflict of interest when admission to lucrative professions is at stake. We already let people test out of listening to four years of high-school lectures; we could do the same with college lectures. I'll bet your co-worker could have passed a test on hospital management.

As I said above, credentials are essential to any plausible system of sorting people into level of qualification, at minimum as a first step. This requires minimizing fake credentials of having trained expertise and prior testing of skills. Recognizing that profit and legit credentials of this sort are not compatible takes us a long way to doing the very plausible things that would make such fake credential producing institutions unprofitable and thus non-existent. Your analogy to a simple fake ID to get a beer is absurd since its much easier to fake an ID than an entire accredited institution whose records employers can check to verify your enrollment.

 

[dismal]

or (2) have our government go to the effort of investigating institutes to see if they're actually training people effectively and stop paying people to go to ones that aren't

Yeah, just like the government does with the crappy public schools that are giving students a shitty education at a high cost.

Oh, wait.

 

[Axulus]

STUDY HAUL

How for-profit schools leave their students high and dry.

96% of students at for-profit colleges take out loans. 13% of community college students, 48% of public college students, and 57% of nonprofit private college students do.

For-profit colleges enroll 13% of higher-education students but receive 25% of federal student aid.

The 15 publicly traded for-profit colleges receive more than 85% of their revenue from federal student loans and aid.

42% of students attending for-profit two-year colleges take out private student loans. 5% of students at community colleges and 18% at private not-for-profit two-year colleges do.

1 in 25 borrowers who graduate from college defaults on his or her student loans. But among graduates of two-year for-profit colleges, the rate is 1 in 5.

Students who attended for-profit schools account for 47% of all student loan defaults.

Sources: Sen. Harkin, Consumer Finance Protection Bureau, Education Sector

http://www.motherjones.com/politics/2014/01/for-profit-college-student-debt

The core problem seems to be, in large part, that they are trying to serve poor students and marginal students that the traditional colleges pass over, and that the federal government is too generous in giving out financial aid to these marginal students (there needs to be some sort of criteria that must be demonstrated before allowing someone to qualify for financial aid, something relevant in determining their likelihood of completing a degree).

It is my understanding that these for-profit colleges do have to meet minimum standards to be accredited and qualify for students to receive financial aid. If they are below those standards then it makes sense to not give students financial aid when attending. We need to be careful though that the poorer performance is not due do the significantly different demographic they serve compared to traditional colleges.

What evidence can you show that these exact same students are better served at non-profit colleges? Like a controlled randomized study, for example? How much of a difference does it make?

Also, is employer discrimination against individuals who hold degrees from for-profit institutions playing a role?

 

[barbos]

Yes, the school scams taxpayers as well. The difference is a degree. Real universities do so to a much lesser degree than DeVry like scams.

Sure, if "a much lesser degree" included virtually none. A core definition of a scam is "a stratagem for gain", which in the case of exchanging educational services for money means a gain in profits. IOW, a scam is a method of increasing profits, and therefore motivated by profit motive itself. Without the opportunity to profit, there is no profit motive and thus no scam motive. Public Universities go to lengths to turn people away and not admit people from whom they could get $, because they do not profit from having more and more students. They have no real profit motive. In contrast, the top level decision makers at for profit institutions get a direct $ for every additional student. Unlike real schools that have limited capacities that are hard to expand, a for profit school will just rent more space anywhere in town to create more space for as many students as they can con into paying.
A scam means that the scammed party is deceived into giving more than they think they are getting. Amount of profit is the difference between how much one gives and how much they get. Since there are far more ways to increase that difference via deceit than honest methods, scamming is a primary means of increasing profits, and thus engaged in proportionately to the degree of profit motives over other motives (such as ethical motives of fairness, societal betterment, pride in what one produces). As an institution, there is little to no motive to scam by public Universities, whereas that is the main motive at for profit colleges that exist for the sole purpose of profit to shareholders. The only limit to their motive to scam is if their scam becomes so well known due to public outrage about it that they can no longer find enough victims. But even there, the decision makers are often more interested in maximizing short term gains than hoping for more modest but sustained profit, so they may not care that the school goes under in 5 years. The same people will just file bankruptcy and open under a new name with a similar scam.
With Public Universities the level of scam on students is minimal because it is not the function of the school to profit/scam. Once hired, tenured, and secure in there positions, some individual professors may "scam" the school by not really doing the amount of work they are getting paid for. This can indirectly impact the education the students are paying for. This does happen but on a level incomparable to when the entire institution is built around the objective of giving the students as little of what they paid for as possible (i.e., profit). Also, public university profs spend decades in near poverty and lack of job security just to get to that level of post-tenure job security for usually rather modest pay given their select skills and expertise. That requires lots of internal motives other than profit motive, which will limit how much they take advantage of their opportunity to give very little when it arrives. Usually poor quality courses at public universities are more do to incompetence than intent to scam. Incompetent instructors can make it through the system in some places if they persevere, especially if they get well funded for their research, because underfunded schools are desperate for outside financing and will allow a less than stellar instructor to get tenure if they bring in lots of $.
But even there, it isn't a profit motive or intent to scam to increase profit. The school is trying to keep afloat to provide quality education at below cost to the students, but it needs outside funding to do that and if the gov and donations are not enough, then it looks to cut of the $ it gets from professors getting outside research grants.
In sum, the degree of intentional scamming of students to get them to apply and pay tuition at public Universities is very low, and even when students don't get the education they deserve for what they pay, it is rarely the result of any intention to scam for personal profit.

Ordinary folk underestimate amount of scam and incompetence perpetrated at top universities, but this is another topic.

 

[RavenSky]

Sure, but not for words as abstract as "University". First, they would have to provide a clear objective definition of what that word means, then require all schools to show proof they meet that definition. It is more straightforward, what something says it "contains peanuts", because peanuts are a well defined concrete thing and there are straightforward methods for measuring whether something contains them.

Require accreditation to use the term.

They are accredited.

 

[RavenSky]

The DeVry commercial just came on...

I shudder to think what they must be charging in tuition if they are currently offering a $20,000 "scholarship" to attract new suckers.

I think, rather than trying to regulate the word "university", the government should simply regulate universities. No "for-profit" universities at all. Private non-profits or state-run universities and trade schools only; and the loans should be made directly from the government at a very low interest rate - no middle-man lenders.

Frankly, many civilized countries don't charge anything for university, and that would be my first choice for the USA too

 

[barbos]

Require accreditation to use the term.

They are accredited.

But they should not be.

 

[barbos]

The DeVry commercial just came on...

I shudder to think what they must be charging in tuition if they are currently offering a $20,000 "scholarship" to attract new suckers.

I think, rather than trying to regulate the word "university", the government should simply regulate universities. No "for-profit" universities at all. Private non-profits or state-run universities and trade schools only; and the loans should be made directly from the government at a very low interest rate - no middle-man lenders.

Frankly, many civilized countries don't charge anything for university, and that would be my first choice for the USA too

In principle I agree. But I still think that line between profit and not profit is blurry.
Suppose I have developed math course which is fully off-line and involves no actual human teachers. Just an artificial intelligence holo-teacher, then what? I am not an university but if I (as a private for profit company) offer holo-teachers to university, then what would that be?

 

[Axulus]

The DeVry commercial just came on...

I shudder to think what they must be charging in tuition if they are currently offering a $20,000 "scholarship" to attract new suckers.

I think, rather than trying to regulate the word "university", the government should simply regulate universities. No "for-profit" universities at all. Private non-profits or state-run universities and trade schools only; and the loans should be made directly from the government at a very low interest rate - no middle-man lenders.

Frankly, many civilized countries don't charge anything for university, and that would be my first choice for the USA too

Yep. Screw those marginal or non-traditional students who are bypassed by traditional colleges. Relegate their useless asses to unemployment or make them bow down and kiss ass to manage a "living wage" job should they be one of the lucky ones.

 

[barbos]

But why would the government give loans to anyone going DeVry?
Don't they realize that they are not getting money back? unless they themselves are graduates of DeVry, that would explain a lot, in fact everything with US government.

 

[J842P]

The DeVry commercial just came on...

I shudder to think what they must be charging in tuition if they are currently offering a $20,000 "scholarship" to attract new suckers.

I think, rather than trying to regulate the word "university", the government should simply regulate universities. No "for-profit" universities at all. Private non-profits or state-run universities and trade schools only; and the loans should be made directly from the government at a very low interest rate - no middle-man lenders.

Frankly, many civilized countries don't charge anything for university, and that would be my first choice for the USA too

Yep. Screw those marginal or non-traditional students who are bypassed by traditional colleges. Relegate their useless asses to unemployment or make them bow down and kiss ass to manage a "living wage" job should they be one of the lucky ones.

How do you twist that out of what RavenSky is saying?

 

[Axulus]

Yep. Screw those marginal or non-traditional students who are bypassed by traditional colleges. Relegate their useless asses to unemployment or make them bow down and kiss ass to manage a "living wage" job should they be one of the lucky ones.

How do you twist that out of what RavenSky is saying?

Dumb solutions like "we just need to eliminate profit" really piss me off. It shows an utter lack of understanding of unintended consequences. Her solution leads to these kind of consequences (if the non profits were doing such a stellar job of serving these students, there wouldn't be a need for these other kinds of educational institutions).

It always amazes me how much the comfortable middle-class left wants to simply ban businesses that serve the poor, the group which they feign sympathy for, leaving them hanging high and dry.

- - - Updated - - -

But why would the government give loans to anyone going DeVry?
Don't they realize that they are not getting money back? unless they themselves are graduates of DeVry, that would explain a lot, in fact everything with US government.

I don't know much about DeVry, but do you have actual evidence that they are completely useless?

 

[barbos]

Axulus, but they are not serving poor, not at 2:1 marketing to teaching ratio.
Poor with good grades could and should get to regular university. They are serving themselves taking money from the stupid poor.