Colleges Are Not Equal

In the Washington Post's latest unsurprising effort to keep taxpayer money rolling into Kaplan (okay... maybe they truly believe it's for the good of the country, not just the company), they offer another defense of the high student loan default rate at private... no, let's use the word "career" colleges.

Although isn't "private" far more accurate, given that they're not including community colleges within that new conceit? And for many of the "careers" at issue, there's no degree requirement for entry to the field? And community college classes to get a certification or to build an equivalent body of knowledge come at a significantly lower price? And many graduates don't in fact find the degree earned helpful when starting a career? But I digress.

Minority students attend career colleges in much higher proportions than do other students, and these are the only schools targeted by the proposal.

I've addressed this before:

[I]f privatizing education is supposed to be a miracle cure for K-12 education, why is "our students are harder to teach" supposed to be an acceptable excuse for the performance of for-profit institutions of higher education? Their students want to go to school and, either with cash or student loan money, are paying for the privilege - you can assume some degree of motivation. Why is it only appropriate to blame schools and teachers for poor outcomes, and insist that the composition of the student body should be irrelevant, when they're part of the public sector?

Also, as previously suggested, the alternative to full-time enrollment at a "career college" that doesn't provide a career - hence the high default rate - is community college. Why is part-time enrollment at a significantly lower cost per credit, or even full-time enrollment if an equivalent community college program is available, a bad thing?

Many career colleges receive their accreditations through the same agencies as the nation's top private and nonprofit universities, which would be spared from the effects of the rule (though 93 percent of historically black colleges would fail the rule's repayment rate test if it were applied to them).

You only need a rudimentary knowledge of the difference between four year colleges and private "career colleges" to understand why you can't compare apples to oranges. And frankly, if a four year college is performing so badly that it can be fairly compared to a "career college" diploma mill, the solution is to apply the new rule to that college as well, not to keep throwing away public money to subsidize private "career colleges" that offer useless degrees.

Career colleges are different only in that they are the schools of choice for many at-risk students, including minorities, parents and full-time workers who believe these schools offer them the best shot at a good job in a field they will enjoy.

If we assume that true, shouldn't the solution be to better educate them such that they recognize that many "career colleges" are a waste of time and money? Believe it or not, if you end up with $40K or more in debt for a "career college" degree that turns out to be worthless in the job market, and you also incur two years of opportunity loss association with your time off of the job market while attending the program or working part-time, you're not better off for the experience. And if you can't make enough money to pay back your government-backed student loans, that's horrible for you - you are stuck with debts that will hound you for decades - and for the taxpayers who pick up the tab. When students default, the only people making out like bandits are the proprietors of the colleges. Talk about moral hazard....

I personally believe we would be better off taking a look at student loans across the board, and putting more responsibility on all colleges to ensure that the loans they convince their students to take are ultimately paid back. Such as by insuring student loans rather than guaranteeing them. That would create a nice, equal playing field for "career colleges" - but I can already hear the squawking.