American Higher Education as bait and switch?

Thomas Frank at Harper's has decided to spend an entire article kicking what has become of higher education in America. Here's an excerpt from the article, which is available only to subscribers online:

[T]he purpose of college isn’t education per se. According to a report issued last year by the National Survey of Student Engagement, American undergrads spend less time at their studies nowadays than ever. They are taught by grad students or grotesquely underpaid adjuncts. Many major in ersatz vocational subjects, and at the most reputable schools they get great grades no matter how they perform. But we aren’t concerned about any of that. Americans have figured out that universities exist in order to man the gates of social class, and we pay our princely tuition rates in order order to obtain just one thing: the degree, the golden ticket, the capital-C Credential. Doubters might scoff that a college diploma is by the year turning into an emptier signifier. Nonetheless, that hollow Credential is what draws many of the young to campus, where they will contend for one of the coveted spots in that gilded, gated suburb in the sky. Choosing the winners and losers is a task we have delegated to largely unregulated institutions housed in fake Gothic buildings, which have long since suppressed any qualms they once felt about tying a one-hundred thousand- dollar anvil around the neck of a trusting teenager. [More . . . ]

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The college version of the subprime mortage mess

Investor Steve Eisman whose huge wager against the subprime mortgage market was described by Michael Lewis The Big Short has launched an assault on fast growing for-profit college industry. Here's the link at Mother Jones. According to the Eisman, for-profit colleges "raked in almost one-quarter of the $89 billion in available Title IV loans and grants, despite having only 10 percent of the nation's post-secondary students." Here is the main parallel between for-profit educators and the sub-prime lenders:

Eisman attributes the industry's success to a Bush administration that stripped away regulations and increased the private sector's access to public funds. "The government, the students, and the taxpayer bear all the risk and the for-profit industry reaps all the rewards," Eisman said. "This is similar to the subprime mortgage sector in that the subprime originators bore far less risk than the investors in their mortgage paper."
Here's another similarity between subprime lending and for-profit education

Both push low-income Americans into something they can't afford—in the schools' case, pricey programs that leave the students heavily in debt; what's more, the degrees they get mean little in the real world: "With billboards lining the poorest neighborhoods in America and recruiters trolling casinos and homeless shelters—and I mean that literally—the for-profits have become increasingly adept at pitching the dream of a better life and higher earnings to the most vulnerable."

In the Mother Jones article, Eisman pointed to the self-reported (and thus potentially under-reported) 50-plus percent dropout rate at for profit colleges as further evidence that they offer poor-quality education. After reading the above article, I referred to Wikipedia's article one of the biggest for-profit colleges: Phoenix University, subsidiary of the publicly traded Apollo Group, Inc. It offers "open enrollment," meaning that it requires "proof of a high-school diploma, GED, or its equivalent." Phoenix graduates only 16% of its students, compared to the national average of 55%. On the topic of de-regulation and quality of education, consider this:

The school was the top recipient of student financial aid funds for the 2008 fiscal year, receiving nearly $2.48 billion for students enrolled. In 2006, due largely to the efforts attributed to the Apollo group, the 50-percent rule (requiring colleges and universities to conduct at least half of its instruction in person in order to receive federal aid or collect federal student loans) was modified. It no longer classifies students receiving instruction through telecommunications methods as correspondence students.

The Wikipedia article offers a lot more information to feed the fires of my suspicion. I don't claim to know any more about Phoenix University than what I have read in these two articles. What I do bring to the table is that I investigated diploma mills as part of my job while I worked as an Assistant Attorney General for the state of Missouri; I don't like the smell of what I'm reading about these for-profit colleges. Based on what Michael Eisman has stated, it would seem to be a good idea for the federal government to tighten its standards for the types of post-secondary schools eligible for federal loans, and to take a much closer look at the quality of education received by the typical Phoenix University student. Is it really worthy of a federal loan guarantee?

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The real cost of college

Bob Samuels puts the numbers on the table. Here's what a student (and his or her parents) are really paying for when they fork over huge chunks of tuition to a prestigious college.

[T]he reasons why the numbers never add up in higher education is that universities and colleges use a false and misleading method to determine the cost of undergraduate instruction. Many institutions calculate this important figure by taking the total cost for all undergraduate and graduate instruction, research, and administration, and dividing that cost by the total number of students. Schwartz argues that this common method for determining cost is misguided because it assumes that all students will be taught by professors and that there is no difference between the cost of undergraduate and graduate education. In other words, when a university or state calculates how much it has to spend to educate each additional student, it includes in the costs, the full salary of a professor, but everyone knows that at research institutions, professors only spend a small percentage of their time teaching undergraduate students. According to Schwartz, parents are really paying for the cost of undergraduate instruction plus graduate instruction plus research plus administration. To be precise, undergraduates are subsidizing the cost of research and graduate education, and no one admits this fact.
I think that he leaves out another big factor in his informative post. Many people pay big money for prestigious colleges because they want their children to attend school alongside other people who can pay big bucks to go to a prestigious college. Why is that important? Why isn't their only one goal to become smarter, which many people do by self-study? In Spent: Sex, Evolution and Consumer Behavior (2010), Geoffrey Miller explains that universities are often in the business of "educational credentialism."
Harvard and Yale sell nicely printed sheets of paper called degrees that cost about $160,000.... alumni of such schools . . . work very hard to maintain the social norm that, in casual conversation, it is acceptable to mention where one went to college, but not to mention one's SAT or IQ scores. If I say on a second date that "the sugar maples in Harvard Yard are so beautiful every fall term," I am basically saying "My SAT scores were sufficiently high (roughly 720 out of 800) that I could get admitted, so my IQ is above 135, and I had sufficient consciousness, emotional stability, and intellectual openness to pass my classes. Plus, I can recognize a tree." The information content is the same, but while the former sounds poetic, the latter sounds boorish.
Miller also has a lot to say about conspicuous consumption in his book, and it should be another factor for why so many colleges can get away with charging immense amounts for education without justifying those amounts. It doesn't hurt the universities financial condition that the ability to pay exorbitant tuition is a plus for many parents. It is boorish to announce one's high salary at a social function, but it is quite acceptable to drop the following in conversation: "Tuition is coming due for my two kids; one is at Harvard and the other is at Yale." Mission accomplished, because you just announced to the world that your kids both have the minimal intellectual and social requirements for entry at those institutions (and they got those genes from you!) and that you have the financial wherewithal to pay for all of that tuition.

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College classes free, for anyone

If you'd like to attend college classes over the Internet at a wide variety of prestigious colleges, consider visiting Academic Earth. According to the about page,

We are building a user-friendly educational ecosystem that will give internet users around the world the ability to easily find, interact with, and learn from full video courses and lectures from the world’s leading scholars. Our goal is to bring the best content together in one place and create an environment in which that content is remarkably easy to use and where user contributions make existing content increasingly valuable.
The participating universities include Berkeley, Harvard, MIT, Princeton, Stanford, UCLA, and Yale. I just finished watching an informative lecture on "The Origins of the Financial Mess." I'm wondering what I'm going to view next. Maybe I'll watch some more of Shelly Kagan's 26-part series on the topic of "Death."

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Never pay for textbooks again, in six steps.

A college education (and even more, the "college experience") costs a lot of money. One of the most bemoaned college-related expenses is textbooks. Every quarter or semester, students trudge through their local bookstores and shell out hundreds of dollars for the heavy, price-inflated compendiums of glossy photos, useless asides, and (maybe) small slivers of information. The pattern of behavior is always the same: the students scan the bookstore shelves for cheaper, used editions (perhaps $70 a pop instead of $100). Some classes require multiple books; some classes require ten. The students carry the stack of texts to the counter and pony up hundreds. In class, the books may never be used- it's impossible to tell when they will actually be relevant. Later, these students gather the books up and try to return them to the store for a pittance (maybe $20-30). Often a book is not returnable because it is an "old edition"- a new version has just come out, with minor updates such as a new cover photo and a table with a new layout. Next quarter, everyone will be buying the full-priced new editions. The textbook industry is a racket. The books are made unnecessarily expensive, for they are puffed-up with frilly nonsense. My school drove up the price of Psych 100 textbooks by requesting a special "Buckeye Edition"; the only difference was a black-and-white photocopy inserted into the first page, which acknowledge the student reader as a member of Ohio State. It's a hose. Last year, however, I realized that I never really have to pay for textbooks. For the past four quarters of school, I have not laid a cent on a bookstore's counter. As I see it, there is no reason for any student to ever pay for textbooks, ever again. Here are my simple steps to attain free textbook access:

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