“In a Fight to Preserve Their Market, For-Profit Colleges Lobby Hard Against …Proposed Rule [on Loans and Pay for Graduates}”

“Accreditation of On-Line University Draws Fire”

These two headlines reflect issues that now only target for-profits but could easily become a major cause of heartburn at not-for-profit colleges and universities. Should not-for-profit colleges and universities be concerned or is this just an attack against money-grubbing for-profits who only care about making a buck?

The first issue (subjecting for-profits to substantial losses if graduates with federal loans don’t earn sufficient income upon graduation) would subject for-profit institutions to enormous federal oversight and huge penalties for non-compliance with fuzzy outcome measures. Of course, the obvious questions are: why just the for-profits and how will the government measure pay for graduates?

The government claims that for-profits entice students to enroll in career preparation programs with large federal loan packages, and these programs frequently don’t deliver good paying jobs. The government provides some evidence that student loan defaults are more likely in the for-profit sector than the not-for-profit sector. But should laws such as this focus on just one sector when the problem exists to some degree in both? Is this practice OK if perpetrated by a not-for-profit? Of course not! And how will the government measure earnings achievement? Will they measure it through average pay for the job category in which the position falls or will they measure it by requiring the institution to contact every graduate for some period of time (whatever that could be) and report the results? The first method could be imprecise and the second method could be very difficult to affect. Furthermore, the assumption that the pay students receive is the primary responsibility of the college they attended and the college they attended should be penalized for the student’s poor achievement after graduation, runs in the face of our country’s culture and ethos! Doesn’t the student have some personal responsibility for the job and pay he or she receives?

Shouldn’t not-for-profit higher education stand up against this sort of government intrusion on principal (and as pragmatists who know this camel’s nose will find its way to our part of the tent as well)? Of course they should!

The second issue (withdrawing the accreditation authority of NCACS) deals indirectly with a new revenue source and a major revenue stream at not-for-profit colleges, but it challenges one of the basic tenets of higher education. In this instance, the government is threatening to withdraw recognition of North Central Association of Colleges and Schools because NCACS accredited a for-profit college with, in the government’s opinion, questionable on-line education programs. As the law currently stands, and our free-democratic society would seem to require, regional accrediting agencies (an association of autonomous educational institutions) set the standards for accreditation. When a college is duly accredited, it can then disburse federal financial aid funds. This first line of attack by the government sets the stage for federal proposals to replace our long-standing peer review process with government accrediting bodies. This change would severely weaken our academic freedom to manage our greatest service — instruction.

Why is not-for-profit higher education silent?

Originally posted July 22, 2010