Much concern has recently been raised, and appropriately so, about the sleazy practices engaged in by many for-profit colleges…practices that often leave students with large student-loan balances that will never be paid, and training whose value is highly questionable. A study cited in this post indicates that only 36% of the for-profit graduates actually repay their loans. (What does “repay” mean in this context? Repay in full, or does some level of partial repayment count?) But the repayment rates at conventional colleges are nothing to brag about, either–54% for public colleges and 56% for private nonprofits…and many conventional colleges graduate an alarmingly low percentage of their students in four, five, or even six years.
This article suggests that the focus on the bad behavior of many for-profit institutions can act as a red herring, distracting attention from the larger problem: “colleges of every stripe are soaking up tons of societal resources and saddling students with excessive debt loads in the face of dubious job prospects.” The authors note that “In their thirst for the blood of the institutions that are preying on less than 10% of all students, Congress and other critics are often ignoring similar exploitation by nonprofit institutions that enroll more than 90% of postsecondary students.” (Sad story about the experience of some law school graduates here–via Margaret Soltan)
Mark Taylor, writing in the New York Times:
If recent trends continue, four years at a top-tier school will cost $330,000 in 2020, $525,000 in 2028 and $785,000 in 2035.
Yet most faculty and administrators refuse to acknowledge this crisis. Consider what is taking place here in New York City. Rather than learning to live within their means, Columbia University, where I teach, and New York University are engaged in a fierce competition to expand as widely and quickly as possible. Last spring, N.Y.U. announced plans to increase its physical plant by 40 percent over the next 20 years; this summer Columbia secured approval for its $6.3 billion expansion in Upper Manhattan. N.Y.U. is also opening a new campus in Abu Dhabi this fall.
There is a similarity between the debt crisis on Wall Street and what threatens higher education. Just as investors borrowed more and increased their leverage in volatile markets, many colleges and universities are borrowing more and betting on an expanding market in higher education at the precise moment their product is becoming affordable for fewer people.
Meanwhile, Obama and his education secretary have called for increasing the number of college grads, with Secretary Duncan referring to leading the world in college graduates as “the North Star for all of our educational initiatives.”
Update: I had also meant to link this post from Erin O’Connor: What will they learn?