The Wall Street Journal today chronicled a huge leap in investor's confidence in for-profit higher educational institutions. Effectively post-high school trade schools, these businesses have partially filled a void the public and nonprofit sectors have been unable to completely fill and doing so at a gain for the investor-owners.
In as recent as only a few months ago, the Obama administration was establishing regulations that would have seriously limited the prospects for these for-profit providers. Unlike their counterparts again in the public and nonprofit sectors, the number of "graduating" or certificate completing students was low and federal loan default rates high. Two patterns were evident: the for-profits didn't do much to prep or support students for their education AND they didn't do much to help them actually get jobs when they completed their programs. This pattern is notably different for public and nonprofit institutions which place an emphasis on prep, support and placement.
But the current Federal Administration is rethinking the facts and offering that the for-profits can likely do the job that's needed. Admittedly, the public and nonprofit schools are challenged by either reduced funding or too much demand so there is a space for more. But shouldn't the question be: how can we better support the institutions that are all about their students as guided by their mission and volunteer boards rather than supporting the institutions whose only goal is to make money for its owners and investors? Is it not more cost effective and does it not produce better outcomes to invest in what has a stronger track record?