The War Against For-Profit Education

Obama hates competition. He apparently does not believe that anyone who makes money should be educating people. Or at least that students of profit-making institutions should not be getting federal aid. It’s fine if you don’t make money, of course.

Actually, I agree with Obama. Students should not be getting financial aid. Neither should universities be getting money from the state. But before someone blows his mortarboard, let me parse some of these issues.

Education is essential to humanity, at least in its broadest sense. We human beings survive and prosper in large part because we don’t have to reinvent everything every generation. We enjoy the standard of living we have thanks to those before us who passed on knowledge. In this sense, education is indispensable.

Education, though, is not the collection of wonderful buildings surrounding me every day at work. That is but one model of knowledge transmission and creation, and one that has changed little since the Middle Ages. The biggest change since then is not the technology, wondrous as it is, but the structure of the organization itself. The university has grown into a multi-layered bureaucracy that defies any attempt at justification in terms of either effectiveness or efficiency. In other words, it is a product of state-enforced rules and subsidies–and it looks it.

Universities work, if by “work” we mean they provide value to those who purchase the service they offer. A college degree is a good banner to fly as one marches in the long parade of adult life. Companies think that the sheepskin in one’s hand reflects the knowledge in one’s head. Having spent some years in higher education, I seriously wonder if this is an illusion. What passes for passing work these days is an embarrassment. Nonetheless, getting one’s ticket punched with a degree allows entrance to the Big Top.

Aside from getting a job, there is much to be gained from a college education. My life is immeasurably richer because of my education. In most cases, though, the mechanisms used to deliver that education are antiquated and unwieldy. The market is telling us this in no uncertain terms. Say what you will of the Phoenix-like universities of this world, they are showing us that the megatons of bricks and mortar we surround ourselves with on campuses all across the country are an option, not a necessity.

The Administration’s first beef against for-profit colleges and trade schools seems to be that students emerge with loads of debt. Nevermind that non-profit students do as well. The second is that there may not be jobs for graduates of these institutions. Mmmmm…might want to talk to the parents of some public university graduates whose offspring have not sprung off, opting instead to take up quasi-permanent residence at home as they flip burgers–or do nothing at all.

We subsidize students to go to school, thinking it a good thing. Public universities then grow into byzantine monstrosities because there is no reason not to. With plenty of money to hire more gnomes to dwell in the university tree branches, we should expect no different. Next, for-profits figure out that there may be a better way to do all this and a boatload of students agree. Obama has a fit. Where has all this gone wrong?

The root of the problem is our fetish about “public” education. When we finally let go of the silly notion that education can only be properly provided by the state, several good things will happen. First, markets will determine what those being educated really want. Do they need or want classes in business? How about gender studies? Biology? Astronomy? The people who decide this sort of thing are convinced that they know what is best, lack of demand be damned. When consumers become free to choose, we who ply our trade as academics will have to ask some hard questions about our own worth. I doubt we like the answer.

Second, education is no longer a four-years-and-done undertaking. The world changes faster and faster each day, requiring all of us to learn constantly. Technology has now made that quick and easy, but many of my colleagues are stuck in the medieval model of people physically cohabiting a learning space. Is that necessary, or even desirable? I don’t know, and you don’t either, any more than the high priests of education do. I’ll tell you one thing, though. Free markets will find the answer.

Obama hates anything that shrinks the state. For-profit education is a slap in the face to his monomaniacal devotion to the public sector. Private for-profit schools are pushing the boundaries in terms of both content and delivery methods, making fools of those who are stuck in the 14th century. Look for him to use every dirty trick in the book to squelch any threat to the public education industry.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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