Sunday, August 22, 2010

Selective Indignation and Student Debt

Momentum seems to be building for a crackdown on for-profit universities and trade schools that allegedly foist large debt loads off on students, for credentials that don't always translate into higher earning potential in the job market, leading to higher-than-average default rates. The Pueblo Chieftain has a story on the issue today. I've seen many just like it popping up of late. But there seems to be a double standard, and perhaps a bit of hypocrisy and opportunism, behind such criticism, given that non-profit schools are only a little less guilty of the same things.

I agree with those who see a "student loan bubble" building to the breaking point, driven by the upward spiraling cost of higher education, easy (government-backed) credit, and the continued willingness of young people to gamble that a college credential will make paying off that debt relatively painless. But singling out for-profit schools for vilification, when the entire system is guilty of the same thing, seems unfair.

It also conveniently sidesteps the real problem, which is the unrestrained increase in tuition, resulting from a stubborn refusal of most schools to control costs and deliver a better product for less money. Such reforms aren't necessary as long as government-backed credit is easily and widely available, and students are willing to keep shouldering more of it. Normal market forces, which push private sector players to deliver a better product for lower cost, simply don't apply in higher education, thanks largely to the student debt industry.

Politicians are afraid to bring the hammer down on these big, bloated, bureaucratic institutions, and they're reluctant to demand across-the board reform, for fear of appearing "anti-education." So they're content to use for-profit schools as a whipping boy, when "the system" itself is to blame.

P.S. The always-astute Vince Carroll has a column in today's Denver Post on a related matter, the largely-taboo topic of professorial productivity.

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