Wednesday, December 28, 2011

The Continued Assault on For Profit Education

For profit education has been demonized over the past couple of years by the Obama administration. In the past few weeks, I have seen that attack take a different turn. In front of the Chicago Economic Club, Chicago mayor Rahm Emanuel said we need to make a larger investment in community colleges.

The larger investment in community college education is not really an investment in education at all. It’s a carefully planned attack against for profit colleges veiled in the “invest more in human capital” vein. For a free market fiscal conservative, it’s a sticky tightrope to walk when you criticize their rationale.

Amid a myriad of problems in American education, there are two that potentially can be answered by community colleges. One, as Erik Hurst correctly analyzed, there is a mismatch right now in our economy between the skills of the labor force and the needs of the business world. It is one of the contributions to our high unemployment rate. Second, the amount of debt that our college graduates assume to get their degree hampers their ability to take risk and work once they graduate. By the way, this has a corollary with government debt and the US too.

Community colleges can be a great solution to the crippling amount of student debt that we are seeing as the cost of education spirals higher. For a variety of reasons, I went to a community college for two years before finishing my degree in the College of Business at Illinois. I graduated debt free, and it made a huge difference in my career. Because I didn’t have to burn through money paying off loans, I was able to take a lot of risk early in my life that helped me later on. Using a community college for your first two years can be a great, economical way to get a college education.

However, that’s not the target market for the Democrats. They are targeting the unskilled labor force that is unemployed. The idea is to retrain them and get them employed into jobs that the private market needs. It’s a noble goal, the real question is should government be behind the satisfaction of that goal? Maybe it’s a deeper question that that. Why haven’t the community colleges already responded to the forces in the market to tailor their curriculums to the needs of the market?

For profit colleges (FPC) have an entirely different set of forces that determine what courses and degree paths they offer. If they don’t offer degrees that allow their students to quickly monetize their investment, they go out of business. FPC’s must respond quickly to market changes by designing and implementing new programs so they can compete with all other forms of education.

After speaking with a person from a for profit college, I found that their thinking was very similar to a start up. They put out a product, and then keep iterating it based on feedback from students and employers. FPC’s are forced to be on the cutting edge of changes in the market because both sides of their supply and demand equation expect it. FPC’s aren’t unionized with legacy teachers unions. They can be run far more efficiently than community colleges.

When you invest in human capital, it’s an investment for life. All of the certifications and degrees you get throughout your life travel with you from job to job. That’s why private employers have found that it is a more efficient use of capital to decrease the amount of tuition reimbursement employees get for outside education. If they do reimburse, they tie it to time of future employment so the company gets a return on investment.

The employee does have opportunity costs. They have to put in the time and effort to get the certification or degree. But the benefit to them is they can take that shingle and get a better job somewhere other than where they are working today. They might be able to raise their wages in their current situation by pitting one employer against another if their degree is valuable enough.

In many cases, tuition reimbursement is creating grade inflation too. If colleges know that students will not get paid for classes they take when receiving a low grade, colleges have an incentive to give higher grades to keep revenue coming in from employers. Lower grades put more economic responsibility on the student, and too many low grades will hurt the supply chain of students coming in from private company tuition reimbursement programs. Grade inflation can affect both community colleges and FPC’s similarly.

Are FPC’s perfect? Not a chance. They have their own problems. But at least when they have problems they can go out of business. That’s not the case for community colleges.

I don’t think the goal of the Democrats is to create a better match between the market and community colleges. The real goal is to increase government spending on teachers unions that populate the community college campus, and to increase the unionized administrative jobs that will be created to support the increased spending at community colleges. It’s also to take unskilled labor and retrain them so they are prepared to take unionized jobs in emerging industries like home healthcare. Having a high unemployment rate along with a poorly trained workforce just gives them a convenient excuse to advocate for higher spending. They are simply trying to expand their base.


British parents driven to desperation in trying to find a safe school for their kids

An increasing number of parents are lying to secure places for their children at the most sought-after schools, figures reveal.

Over the past five years, more than 700 children are believed to have had their school places withdrawn after false information was submitted on application forms.

In the past year alone, some 420 parents are suspected of cheating the application process to ensure their children get into the best primary and secondary schools, a rise of 13 per cent on last year.

Falsehoods include claiming children have been baptised to get them into faith schools and using the addresses of friends or relatives within catchment areas.

Many parents are said to feel driven to ‘desperate lengths’. Brian Lightman, general secretary of the Association of School and College Leaders, said: ‘The assumption that parents need to shop around to find the best school has led parents into getting very anxious about admissions. ‘They are now more likely to go to fairly desperate lengths to get children into a particular school.’

The findings – the result of a freedom of information request to local education authorities in England - come amid fierce competition for school places. In the past year, almost one in six children failed to get into their first choice of secondary school. One in 20 children missed out on at least three schools listed on their applications.

Some schools, including independent academies, now receive as many as 11 applications for each place. Primary schools are also under pressure.

According to data from 93 councils, 421 suspected fraudulent applications were detected this year, which is a rise of almost 13 per cent when compared with the estimated 373 cases from last year. Since 2007, 738 places were withdrawn after false information was entered on application forms. In Birmingham, places were withdrawn on 67 occasions, while in Slough it was 63, Staffordshire, 21, and Kent, 18.

But in an example of the differing way councils deal with cheating, 20 authorities said they had never removed places even when parents were found to have lied. Newham, in East London, said it relied on schools themselves to check all parental information.

However, many local authorities – including Hertfordshire, North Somerset and Reading – randomly cross check around 10 per cent of applications against their council tax files. In over-subscribed schools, some authorities carry out checks on all applications, making unannounced home visits in some cases and setting up hotlines.

Demand for sought-after school places has also driven up house prices, with parents paying premiums of £77,000 to buy homes in catchment areas.

A spokesman for the Department for Education said: ‘Parents have found themselves increasingly frustrated by the lack of good school places. We are ending this unfair rationing. ‘Our radical education reforms and our capital investment will mean there are more good schools, and more good school places, for parents.’


When British parents move heaven and earth

So, 420 parents have been cheating on their schools’ application forms, according to The Daily Telegraph’s front page report yesterday. Desperate mummies and daddies have been caught lying about their address and church attendance in order to get their children into the best state schools.

Well, wouldn’t you? A bad state school condemns children to think seven sevens are 68, that T.S Eliot wrote Wuthering Heights and knives are part of the school uniform. Who can blame those enterprising parents who adopt Granny’s address as their own because she happens to live in the catchment area of a top state primary? Good parents will move heaven and earth (and home, too) to ensure their children get a good – and free – education. Property prices reflect this: when we moved to our present house, we were told that about 10 per cent of the steep price we were paying was due to the Chelsea Academy being built down the road. Once Ofsted rated it “excellent”, the estate agent assured us, the price would go up another 20 per cent; parents calculate that a mortgage costs less than the £30,000 per child per year needed for a public school education.

God, like certain neighbourhoods, is also experiencing a surge in popularity among parents of school-age children. Faith schools have once again topped the league tables; they not only got the best academic results in the state sector, they also came first in achieving the greatest improvement. No wonder atheists and agnostics suddenly find religion. Hypocrites? You bet – and I’d do the same in their shoes. A child’s future is worth a Mass.

The secularist intelligentsia, however, is choking on the confidence trick some parents play as they file into church each Sunday. I once clashed with the humanists’ high priestess, Polly Toynbee, on Newsnight over this issue. Even when the choice was between a sink school and putting in an appearance at the 10 o’clock children’s service once a week, La Toynbee was unyielding. Better compromise a child’s prospects than her own dogma. Thank goodness, for our children’s sake, that so many parents disagree with her.


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