For-Profit Colleges Receiving Public Funds Reveals Extent of Higher Education Bubble

In a May 28, 2011 article on Time.com, written by Andrea Ford is this revealing passage:

Since for-profit colleges get huge amounts of government money–they enroll about 11% of all higher-education students yet receive nearly a quarter of all federal financial aid, for a total of $24.6 billion in loans and $7.5 billion in Pell Grants last year–many lawmakers see the situation as tantamount to massive fraud at the expense of taxpayers. ‘The more I’ve looked into this in the past year, the more it’s become clear that this is an open spigot of taxpayers’ money into private pockets,’ says Iowa Democratic Senator Tom Harkin, chairman of the Health, Education, Labor and Pensions Committee. ‘It’s got to be slowed down, and in some cases turned off.‘”

Attaching numbers to the higher education bubble finally allows the layman to see its worrisome extent. The federal government is subsidizing for-profit colleges to an alarming degree when it should know full-well the numerous criticisms leveled at the legitimacy and viability of such often under-accredited institutions. People give their money to these for-profit colleges out of desperation – these schools are often the last hope to attain the new “stamp of approval” for a “good job” in the United States.

The stamp of approval in the 2010s, if not well before, is the iconic 4-year degree from a college or university. Countless employers require a 4-year degree as a requirement of employment. Not a specific degree, mind you, but any 4-year degree. Such a degree is seen as a sign that one possesses the necessary organization skills, social skills, and intelligence to be successfully (and efficiently) trained for the job. Never mind the fact that such assumptions are often inaccurate – many intelligent, capable, and socially-savvy people do not have a bachelor’s degree and many unintelligent, inept, and socially-incompetent people do have a bachelor’s degree – employers want that “stamp of approval” on each and every resume.

And, sadly, the federal government has played into that expensive demand. Countless government agencies require a 4-year degree and tax dollars are strewn about to fund higher education in spite of its diminishing returns. A 4-year degree is now expected and is therefore worth much less than it was only a generation ago…and is in no way is the guarantee of middle-class financial stability that it once was. With college degrees worth less and less you would assume that the government would rein in its extravagant spending on colleges and universities…but it hasn’t.

More alarming that its heavy spending on traditional universities is its heavy spending on for-profit colleges, which are alleged to be money pits that deliver sub-accredited educations and are much less helpful at increasing students’ employment options than originally claimed. By allowing taxpayer dollars to go toward tuition payments at such institutions the government is tacitly supporting the ever-growing (and ever-weakening) higher education bubble. The incessant assertion that every American needs to seek that “stamp of approval” has gotten to the point where the government is allowing a “grey market” of sub-standard higher education to proliferate and expand…all so more “stamps” can be stamped – even if they are cracked, smudged, or bereft of ink.

And people are being hurt – people are, to some extent, basing their decisions to gamble their money and time on higher education’s “grey market” because they see that it is government-accepted. By insisting on this “stamp of approval” and funding any institution that alleges to help grant it, the federal government is doing society, and the economy, a disservice. Rein in the ability for tax dollars to be used as such controversial institutions and pare back the blind insistence on a 4-year degree as the benchmark of employee trainability.

Congress, use the money you save on supporting for-profit colleges to help government employers put in an extra few minutes with each job applicant to get to see the real person and his or her actual abilities…not the check mark in the column for “highest education attained.”

Help de-pressurize the bubble before it explodes over us all.

SOURCE:

http://www.time.com/time/magazine/article/0,9171,2068085,00.html