Monday, August 02, 2010

Obama's war on low-income people trying to get ahead

Roger Hedgecock writes about how the Obama administration is targeting for-profit private colleges like the University of Phoenix.
There are 14 of these publicly traded private colleges in the U.S., enrolling about 1.4 million students. These private largely non-union colleges provide instruction connected to jobs and careers, using the best technology available, and flexible hours, to allow students to work and learn at the same time. Enrollment is booming as unemployed and underemployed folks seek new training and skills.

Students attending these private colleges are eligible for federal student loans. In Obama's world, this is an intolerable subsidy of the college’s profits.

In a study released this week, the Senate Committee on Health, Education, Labor, and Pensions criticized these colleges for the profit they make, alleging that tuition is higher, student loans larger, and defaults on those loans twice those of public colleges.

The report also charges that students drop out at higher rates, are not properly supervised, and take classes that are not accredited.

The report states that 30% of students from these for-profit colleges have defaulted on their student loans since 1995, as compared with just 15% of public-college students.

The Obama Department of Education moved last Friday to cut off student loans to private colleges where a too-high proportion of the students fail to repay their loans.

Sen. Tom Harkin (D.-Iowa) called for even more stringent federal control of private colleges to ensure that "tax dollars are not wasted and students are not cheated".

This entire attack is bogus. Here at last—transparency in the Obama regime. A transparent power grab.

Most of the students who enroll in these colleges are people who want to get ahead by earning a degree on their own time, maybe while holding down a job. They can't afford to take classes on the schedule of a regular university. They're getting degrees in truly vocational training that most universities don't offer. And the arguments about how they charge more than public colleges and have higher default rates are simply bogus.
Tuition is higher at private colleges because "tuition" at public colleges is heavily subsidized by taxpayers to start with. Therefore, student loans are larger at these private colleges to cover the real cost of the education. The truth is that tuition at these private colleges is much lower than the true cost of public colleges when you add the "tuition" and the taxpayer subsidies.

The default rate for private-college students is also higher because these private colleges are providing the flexible, technical education to minority and poorer students that public colleges refuse to do.

In private colleges, you work on your schedule, at your pace, using the computer with much less (if any) class time. Many of these students "drop out" short of a degree to gain a job when their skill level is high enough. By contrast, public union-run colleges still make students work to the college schedule in centralized campuses with high costs.
Such schools aren't for everyone, but they do serve their particular niche in the education market.
Proprietary schools charge a lot more than public colleges—an average of $14,174 this year, compared with $2,544 at public two-year institutions and $7,020 for in-state tuition at public four-year institutions, according to the College Board. But students frequently choose proprietary schools over public colleges because for-profits do so much to limit the hassle of enrolling and applying for aid, and because students can take the classes they need quickly and get on with their lives. Ms. Ford, the Kaplan student, said she chose it for her nursing degree "because I could get into the class without having to wait."

Still, there are plenty of horror stories about career-college students who never graduate, or those who leave with large student-loan bills and then fail to get jobs. Students from proprietary institutions borrow more than students in other sectors of higher education, and have the largest student-loan default rates. But they graduate from two-year programs at a much greater rate than do students at community colleges: 60 percent in 2007 compared with 26 percent, according to the U.S. Education Department. In addition, for-profit university leaders say their students are bound to have higher loan-default rates because they are more likely than students on traditional campuses to be low income, to live on their own—without their parents' support—and to be the first from their families to attend college.

When it comes to jobs, some for-profit institutions have become key suppliers of workers in certain markets. Keiser University, a privately owned institution with 15 campuses in Florida, has been the No. 1 producer of associate-degree graduates in health professions and related sciences in the state for three of the last five years. "Students like our culture," says Arthur Keiser, founder and chancellor of the university. "It's very personal."

And employers like his graduates. The Cleveland Clinic Florida has hired more than 50 Keiser graduates in the last five years. Keiser students, who become radiology or surgical technicians and medical assistants, for example, are more mature and focused than those from other institutions, clinic officials say.
But they have the word "profit" in their model and the Obama people just can't stand that so they're trying to end federal subsidies for students who, on their own, choose these schools. And so they compare oranges and apples and conclude that they should change the rules for federal loans going to these students.