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Are Proprietary Colleges Worthwhile?

Just when the heated debate over the payoff of a four-year college degree seemed to have died down, The Weekly Standard published a piece in the July 5-12 issue that is sure to reignite the flames ("Obama's Crusade Against Profits"). Andrew Ferguson, the magazine's senior editor, argued that the only genuine difference between non-profit (traditional) and for-profit (proprietary) colleges is that the latter earn a profit. He believes "nowadays that's enough to make you suspect."

Actually, there's more to the story than what Ferguson maintains. Let's start with the numbers. Despite the cost, enrollment in proprietary colleges has soared. Average tuition is about twice that of state colleges or community colleges, and approximately half that of private non-profit schools. One quarter of all adult undergraduates are enrolled in a proprietary school. If the growth continues at the present rate, 42 percent of this population will be attending by the end of the decade. This compares with seven percent of the country's overall college population enrolled in these schools.

Why would so many non-traditional students (high school dropouts, single parents, part-time workers et al.) opt for these proprietary institutions when they could attend state schools at a fraction of the cost? The answer is they provide flexibility and convenience in the form of multiple locations, rolling admissions, night and weekend classes and emphasis on online instruction. In other words, they're easier to get into and easier to graduate from than traditional colleges because the aim is to generate volume, which in turn enhances profits.

Yet it's highly doubtful in the final analysis if the degree opens more doors than a certificate from a community college would. That's a fair point because with some notable exceptions, the primary - perhaps sole - objective of these students is to land a job immediately after graduation. There's nothing at all wrong with this goal, especially in this recession. But why spend the money, time and effort to earn a degree that is of dubious value?

Charles Murray raises this same question in Real Education (Crown Forum, 2008). He believes that far greater emphasis should be placed on vocational education in high school. The notion that college is for everyone is "educational romanticism." He's right. I've written before about the unintended consequences of counseling all students to apply to college ("Rethinking the Value of a College Degree"). If more students were directed to a vocational curriculum, they would enhance their chances of being steadily employed in the decades ahead. That's because the only jobs that will be secure will be those unable to be sent abroad electronically.

There's another factor that needs amplification. Proprietary school students are more likely to default on their student loans than traditional school students. Although proprietary schools receive 20 percent of all federal loans, their students account for 40 percent of the defaults. These students typically possess characteristics that would make them candidates for default at traditional schools as well. But at least the size of their default would not be as great if they had enrolled in state colleges or community colleges. That's no small consideration when credit is so hard to get.

All college degrees are not equal because they signify different accomplishments. With all due respect, is a bachelor's degree from an Ivy League school considered the same as a bachelor's degree from a state university? By the same token, is an on-line bachelor's degree perceived in the same way as a bachelor's degree from a bricks- and- mortar college? The question is something that students need to ponder before they commit to any form of tertiary education. The trouble is that too many students have been seduced by the allure of a sheepskin.

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The opinions expressed in Walt Gardner's Reality Check are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.

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