
The Rise and Fall of For-Profit Schools - bpolania
http://www.newyorker.com/magazine/2015/11/02/the-rise-and-fall-of-for-profit-schools?mbid=rss
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exelius
This is a good thing for the country; the education provided by these schools
is often on par with sources like Kahn Academy and Coursera -- at a much
higher price. It seemed like many for-profit colleges are simply a way for
"schools" to collect federally guaranteed loans that the students then have to
pay back. The student assumes all of the risk.

The other side of this industry are charter schools. These are for-profit K-12
schools, often paid for by state / local governments. The problems with them
are:

1) Graft is common, with charter school administrators sometimes taking home
ludicrous salaries ($500k+ for schools with ~1,000 students)

2) Funding often comes directly from the local school district, most of which
are already severely cash-strapped. The problem here is that the cost of a
single student attending a school district is largely buried in fixed costs:
when the state takes $6000/yr from a district and gives it to a charter
school, the district's costs do not decrease by $6000. This makes school
districts worse, which accelerates flight to charter / private schools.

3) Educational standards are different -- in most states, faith-based charter
schools are totally ok. As long as they teach some bare-minimum requirements,
they can teach as much religion as they want. Also, most states offer some
sort of funding incentive based on test scores -- which just encourages
schools to play the numbers game by finding reasons to suspend/expel
struggling students, encourage cheating on tests, etc.

To be fair, not all charter schools are for-profit, and there are good charter
schools and bad ones. But the entire system stinks; it cuts funding to
struggling districts, leaving them in a perpetual budget crisis. It often does
little to improve the education of students, while placing more of the burden
on parents to go shopping for a school.

~~~
ThomPete
As someone with a kid in a charter school (Success Academy) I have to disagree
with the very premise for how you discuss them.

Some charter schools is a response to the problem of amongst other issues, a
way too strong teachers union and it's inability to develop contemporary
learning environments for children. In California teachers union have in their
agreement that they can't get replaced by new technology.

The high salaries is a tradeoff from the high pressure they put on the
teachers and the very fact that they can get fired.

My son start 7.30 in the morning and ends 4.30 in the afternoon you can guess
how much the teachers work. They are 32 children in each class.

Success Academy started in Harlem and was responsible for taking the kids out
of their social fragile environments and starting to give them good habits and
start showing that that others expected things from them and believed in them
to deliver. Success Academy is one of the best performing schools in NY state.

Compared to the usual public school system, charter schools when done right is
an amazing alternative to the public system.

Now I don't believe charter schools are the only way to do things, but I do
believe that teachers unions are way to strong and until they start to change
I will do what I can to keep my kids out of them.

Success Academy is privately run but publicly funded and the school have to
fight for every dime they get while still staying out of the control of the
teachers unions influence through the DOE.

So it's a much more complex discussion than the one you paint here. If
anything when charterschools are done right they are a much better model for
how the public school system should work IMO.

~~~
exelius
Right; I don't think all charter schools are bad. But the way the system is
implemented in many states, there is no way to know what the quality of a
school actually is. The way it's funded causes a disproportionate drop in
available resources for students who aren't in charter schools, which stresses
an already broken system to a level that endangers students safety.

Private schools are and have always been an option if you don't like the level
of education provided by your local district. If we feel we're not getting our
money's worth from our public schools, that's fine -- but fix the public
schools, don't divert the money elsewhere. Schools don't react to competitive
pressures, so all that causing competition for state funding is going to do is
decrease quality.

~~~
ThomPete
I don't buy the premise that they are somehow stressing an already broken
system. Again 32 to students in every class. We aren't talking about small
classes here we aren't talking luxurious schools. And then on top of that the
positive influence it has one socially challenged areas.

There is a world of difference between a public school in Tribecca and one in
Harlem. To be able to attend the one in Tribecca you need to live in Tribecca,
you have to be zoned.

Success Academy have a lottery which means kids from harlem, bronx, tribecca,
williamsburg all will attend the same school regardless of where they live.

What you are claiming about charter schools are many many times worse in
public school system where you get a lot of lousy education and very strong
teachers unions on top of it.

~~~
exelius
Let's say a public school has grades K-5 with 2 classrooms of 32 students per
grade. That's 12 classrooms, for a total of 384 students. Let's also assume
that school gets $6000 per year, per student (total of $2.3 million). The
budget is already threadbare, so there aren't many places left to cut.

Now let's say you take away 10% of the students from that school, such that
you now have 29 students in each class. The school's budget is now $2 million,
but they haven't shed any costs: they still have the same number of teachers,
the same buildings to maintain, etc. So they have to get creative with their
budget, which is how you end up with crappy local schools that don't have arts
classes, a school nurse, or enough books to go around. This causes more
students to flee to the charter school system, making the problem worse and
creating situations where kids are frequently unsupervised. Worse, these
schools are often forced to take on students with no additional funding in the
event a charter school goes bankrupt (which happens to 1-2 charter schools a
year in most major cities).

I'm sure my take on this issue would be different if I had kids, and the
teacher's unions are part of the problem. But we should fix the unions and the
schools, not provide an unregulated system where government money is funneled
into private businesses with little to no oversight.

~~~
ceades
I also take issue with your characterization of charter schools as all being
run as for-profit corporations. The charter school environment and laws vary
from state to state. California as one example has 1,198 charter schools. Only
six of them are incorporated as LLCs, the rest are all either non-profit
organizations or run by school districts. There certainly are for-profit
charter schools, and in some states they have been an issue, but the majority
of charter schools are run as non-profits.

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madaxe_again
Here in the UK, there's an ongoing headlong rush driven by the incumbent
robber baron^W^Wconservative government to turn a majority of schools into
"academies", which is a back-door to complete privatisation of the
"educational sector" (it's only a "sector" to those who see it as a profit-
bearing industry, rather than an investment in "our" collective future).

Any negative news about the effects of privatisation elsewhere, such as this,
is sidestepped deftly, as, you see, academies aren't privatisation, they're,
uh, enabling, um, better education, for the children, saving the taxpayer....
look over there, shiny thing!

Academies have already come under fire for all varieties of corruption and
improper practice, but individuals ("a few bad eggs") are being blamed rather
than the system which promotes the viewing of and engagement with children as
nascent consumers.

 _shakes head_

~~~
gjm11
I broadly share your opinion about the "academy" movement in the UK, but it's
not terribly relevant to this article, which is about what in the UK are
called universities rather than schools.

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randcraw
IMHO, a better strategy for government would be to encourage community
colleges to do more, especially: 1) to emphasize skills that are in demand
locally, in the community where the school serves, and 2) to provide
instruction for more advanced subjects as part of professional continuing
education. Of course, they'll need more funds to do this, as badly cash
strapped as they are today.

For example, I'd dearly like to take some advanced math courses like those in
the junior/senior years of any good undergrad curriculum. But no college in
the Philadelphia area offers these on evenings or weekends, and no college (I
know) offers them online. I can't imagine that there's no market for this. Why
should this be?

Given the wide availability of community colleges and today's computers and
networking infrastructure, it should be easy to teach strong uppergraduate
courses to nontraditional students in a wide range of useful tech subjects
like engineering, physics, astronomy, chemistry, etc. Using the physical
resources of local community colleges, even many uppergrad lab-based courses
could be supported.

But to expand their charter, community colleges will need better support, and
not just from their local communities. Most CCs today are overwhelmed with
lowergraduate demand, given the universal unaffordability of college
education.

If congress wants to do something constructive, they should shift their
support and attention away from for-profit schools and transfer to community
colleges.

~~~
vezzy-fnord
Sounds like what you really want is more decentralized education networks,
i.e. democratic free (as in freedom) schools. There's already several of these
slowly emerging across the U.S., and indeed carry the advantages of lecturing
on all sorts of niche subjects without a formal bureaucracy and instead based
on principles of self-governance with a coop-like structure. They're
exceptionally adept at serving local communities and the lecturers or
educators invited do not undergo a certification process (as is commonly
advocated by laissez-faire and left-wing proponents alike).

My suggestion would be to simply extend the accreditation process to such
networks, and have more of them appear grassroots on the level of individual
communities and neighborhoods.

~~~
randcraw
Yes, I think the accreditation process probably should be central to any
revisions/extensions of the current college system. That may have been the
achilles heel of for-profit schools -- the lack of accreditation and their
disinterest in delivering a product that must live up to recognized academic
standards.

Any entity or means that delivers a high quality education, and especially
does so affordably, works for me. Ideally such accreditation would work to
improve (or expand) the reputation of community college themselves. Too many
provide a second rate experience, (probably due to their often demanding less
from the student than the better four year schools do).

If CCs were to offer some sort of degree beyond the Associate's by augmenting
the existing CC workload (perhaps with courses and material arising from
groups like Western Governors or even Kahn or Udacity) that met the standard
of a good accredited university, that would be useful to many and a good start
toward customizing their offerings while assuring academic repute and
respectability.

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peter_l_downs
_The crackdown is long overdue, but there’s an important consequence: fewer
nontraditional students will be able to go to college._

Sure, but why would we want to encourage anyone to attend "colleges" like
Corinthians and University of Phoenix, if the effects are on average as
harmful as described in the article? Not sure if this is just the author
trying to shoehorn in some "debate" at the end of the article but it feels
like it, given the details of the rest of the piece.

~~~
jccalhoun
The whole article has a weird tone when it comes to its descriptions about
for-profit colleges. It starts with "Not too long ago, for-profit colleges
looked like the future of education." When was that? People that knew anything
about for-profit colleges have known they were mostly ripoffs for years. What
people might have thought is that online colleges were the future. Those
aren't dependent on the for-profit model at all. Lots of real colleges offer
online courses - and quite often for less money than for-profit ones. Those
will still be around for nontraditional students even if all for-profit
colleges were eliminated.

~~~
geomark
"...they were mostly ripoffs..."

Maybe my experience is not the norm. I've heard a lot of bad things about
schools like Phoenix and DeVry. But I went to DeVry (quite a few years ago)
and got a 2-year tech diploma. They also offered a 4 year accredited BSEE at
the school I attended (Arizona). It was failry challenging, a lot of people
dropped out, but literally eveyone who graduated had a job offer waiting for
them, several if you had decent grades. I had three offers from which to
choose. It launched a nice career for me, including getting an employer to
sponsor me to complete my BSEE.

Things must have changed, because it was pretty solid at that time.

~~~
resolaibohp
What a lot of people seem to forget is that there are some for profit schools
that are regionally accredited. This includes DeVry.

Unfortunately all of the for profit school hate lumps them all together which
makes people biased towards any for profit degree regardless of accreditation.

------
laotzu
Jon Oliver did a great bit on privatization of education:

[https://www.youtube.com/watch?v=J6lyURyVz7k](https://www.youtube.com/watch?v=J6lyURyVz7k)

------
peter303
A lot of military and older prefer the online experience. It takes time to
commute to classes. Also the straight out of high school students are immature
and aimless. In the beginning the for-profit college offered a better online
experience. But regular colleges are catching up.

------
mucker
Can we kill the "teachers aren't paid enough" heads in here? They are the
weakest of all performing of all majors
([http://blogs.edweek.org/edweek/rick_hess_straight_up/2011/09...](http://blogs.edweek.org/edweek/rick_hess_straight_up/2011/09/want_a_38_gpa_major_in_education.html)).
Get a business degree and you can end up in Starbucks. Get a Ed degree, work
less in college, and end up with an above average starting salary when you
calculate in time off.

Or go STEM, work your butt off, and get paid well. These are grown up choices.

~~~
kjdal2001
I think the "teachers aren't paid enough" thing is about the opposite of this.
Its not that teachers would be better at their jobs if they get more money.
Its that if you wan't to attract the type of people who currently go STEM
instead of the people who currently major in education, you need to pay
teachers more. Sort of a "you get what you pay for" type of thing.

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mwsherman
Honest question: what is the difference between a “for profit” school and one
that ends the year with more than that it started with? If Harvard manages
itself such that its endowment increases, is this not a profit? What is the
practical, operational difference?

~~~
piker
For profit schools have shareholders/members who are privately entitled to the
equity that accumulates. They generally will have to pay some form of taxes
(income, capital gains, etc.) on that leftover. Non-profit institutions like
Harvard have received a federal exemption from most US taxes, provided that
they continue to pursue their stated purpose and jump through some hoops. No
individuals are legally entitled to Harvard's endowment.

------
drostie
> Regulators have been cracking down on the industry’s misdeeds—most notably,
> lying about job-placement rates.

One of the services that my company (IntegriShield) provides is collecting
these placement statistics; it is one of the less-profitable things we do, the
sort of grunt work that you'd usually offload to a call center, but we insist
on Doing It Right. It's a messy business: usually contact information is
sparse and incorrect, and graduates mostly just let calls go to voicemail
rather than give us 5 minutes of their time, possibly because they hear "we're
calling you on behalf of <your university's name here>" and think "we're
calling you about your student loans" or so, which we're not.

I guess my point is, I'm totally unsurprised that less-scrupulous employees
faced with that _hairball_ just said, _eh, I 'll make up that I successfully
contacted them, what harm could that do?_ \-- and if that happens, you've got
across-the-board confirmation bias going on, "of course our graduates land
good jobs in the field."

> a 2010 undercover government investigation of fifteen for-profit colleges
> found that all fifteen “made deceptive or otherwise questionable
> statements.”

Yep, that's another service we offer: we'll call your admissions reps
undercover and see if you lie to us. Then you can retrain admissions reps to
scale back or remove those claims.

> For-profit colleges have capitalized on our desire to make education more
> inclusive.

For chrissakes, don't blame the for-profit colleges for this! They did what
any company does: they stepped into a business void. Your typical for-profit
might be a barber/hairstyling/cosmetology college; they don't do anything that
an apprenticeship at a similar business didn't already do; they just made it
their _raison d 'être_. The business gap existed because the apprenticeship
normally takes a while and can't be done by dilettantes (people who have other
jobs going on in their lives).

What _really_ happened was that the economic recession led to lots of people
being laid off, and some of those people had always wanted to move into a
more-artistic service industry instead. They funded this training with
government-issued student loans, which unfortunately have draconian
legislation on them (like they can't be discharged in bankruptcy, the
government doesn't even try to audit where the money is going, etc.). Still,
the people who took these loans in theory were taking an informed risk;
there's been no scandal about "nobody told me how much tuition was until after
I graduated;" nobody's been fleeced.

Yes, there is some chicanery about for-profit colleges making the dream seem
too-good-to-be-true (especially with regard to graduate placement). Combined
with aggressive marketing that encourages people to dream big, there may be a
valid complaint that they're overtraining the population so that more people
are qualified barbers than any city legitimately needs, so that job prospects
bottom out alongside wages. But they didn't provide the dream and they didn't
provide the loan, they just inserted themselves in the middle, to take the
loan money and service the dream. A voice of wisdom saying "hey, are you sure
you want to drop everything for this dream? You're going to be in debt for
quite some time if you take this loan" would be _nice_ but it's also
_supererogatory_ : capitalism doesn't usually breed such saints.

~~~
irl_zebra
> I guess my point is, I'm totally unsurprised that less-scrupulous employees
> faced with that hairball just said, eh, I'll make up that I successfully
> contacted them, what harm could that do? -- and if that happens, you've got
> across-the-board confirmation bias going on, "of course our graduates land
> good jobs in the field."

Well, my experience is that it's more of a selection bias than anything else.
Not outright employee-not-wanting-to-do-their-job lying. When the calls go out
to graduates to get employment data, the successful ones have no problems
giving their data, while the unemployed ones hesitate. This can be seen where
the percentage of graduates reporting data is given.

This also happens with salary data, those working temp jobs or minimum wage
don't as readily give out their salary data as those who are really successful
early on.

One seemingly effective way I've seen universities get more representative
data has been to hold diplomas until a survey is filled out. Obviously this
doesn't capture later data (like salaries/employment 9 months out), but it
gives a good picture of recent graduate data with extremely high reporting
percentages.

