‘Lower Ed’ looks at the controversial role of for-profit colleges

Hayley Hershman Mar 3, 2017
A sign identifies DeVry's Chicago campus. DeVry University is part of the DeVry Education Group, a publicly traded global provider of educational services. Scott Olson/Getty Images

‘Lower Ed’ looks at the controversial role of for-profit colleges

Hayley Hershman Mar 3, 2017
A sign identifies DeVry's Chicago campus. DeVry University is part of the DeVry Education Group, a publicly traded global provider of educational services. Scott Olson/Getty Images

In her new book “Lower Ed,” sociologist Tressie McMillan Cottom explores the controversial place for-profit colleges have in today’s economy. She sat down with Lizzie O’Leary to discuss her book and the problems with for-profit colleges. An edited transcript of the conversation is below.

Tressie McMillan Cottom: It is true that those who enroll in for-profit colleges are what we broadly call nontraditional, right? But that doesn’t just mean that they’re older which is normally what we think of as traditional. Nontraditional really means pretty much anybody who doesn’t go straight to college immediately upon graduating from high school. For-profit college students tend to be nontraditional. I think the most interesting thing about the for-profit college student universe is that they are overwhelmingly women. Almost a full three-quarters of those enrolled in for-profit colleges are women. They’re disproportionately African-American and Hispanic.

Lizzie O’Leary: One other thing that for-profit students often do is take on a tremendous amount of debt relative to their own personal income.

McMillan Cottom: Yes.

O’Leary: Why does that happen?

McMillan Cottom: That happens for reasons that are the fault of for-profit colleges and then for some reasons that are not their fault. So, the first reason it happens is there’s a lot of evidence now, economists have demonstrated, that for-profit colleges essentially set their tuition conveniently to be the maximum allowable that students can borrow from this federal student aid system. It just so happens that most for-profit colleges set their tuition right at the top of what’s allowed to borrow.

O’Leary: What a coincidence.

McMillan Cottom: I know it’s very convenient. And so as it turns out in our effort to make college more affordable or accessible for people by allowing them to borrow money to attend college, what for-profit colleges have sort of figured out how to do is, as long as they match tuition for that they can extract additional revenue from students. The flip-side of that is the students who are most likely to attend a for-profit college have very little wealth, if not negative wealth, meaning they have more debt than they own. So they need a fast sort of credential solution because they can’t waste a lot of time because time is money and well for-profit colleges specialize in exactly that; fast credentials.

O’Leary: One of the reasons this is so relevant right now is that there are thousands of students who attended for-profit schools that then collapsed and who are trying to get debt relief from the Department of Education. I’ve reported on them, I know you’ve talked to lots of them. As taxpayers, how should we think about this because these are students who are saying ‘wait a minute, this contract wasn’t fulfilled’ but also schools are saying ‘tough.’

McMillan Cottom: Right. One of the downsides of us turning higher education into an individual consumer good the way that we have is that the public does forget how much we are all collectively invested in higher education. That’s why I like to keep pointing out that when we talk about for-profit colleges making $15 billion in profit in a given year, well over 90 percent of that profit is from federal student aid money. That means that profit is really just the transfer of public tax dollars to the private sector. I think if we think of people’s student loan debt then is not their individual problem, but as a collective social problem, because their individual debt is something that we have paid for. It’s the public that isn’t getting its return not the individual that has failed. So when schools do not honor their commitment to individual students they are also not honoring their commitment to taxpayers. Now on that what we should be hearing then every time we hear a story about a for-profit college that closes without notifying students or notifying them well, or that leaves students with more debt than a usable credential because they weren’t accredited, or because they weren’t suitable for students to get the licensure to work in their field. We see student loan debt, we should say ‘oh they stole from taxpayers’ and the public should be asking for someone to be held accountable for that.  

O’Leary: Well, yeah, but you know that the counterargument to that is someone saying we don’t have to take out that debt in the first place.

McMillan Cottom: That is correct. To that I say there are lots of things that we don’t have to do that we have to do, right?  You don’t actually have to go to work every day, but you have to go to work every day. Work is how we organize our entire society. Well one of the things that I try to show in the book is that the choices that we think people have actually aren’t practical choices. If the choices between being employable and not being employable in a world where the social safety net is dissolving before our very eyes, what we’re really saying to people when we say to them ‘you shouldn’t have taken on this student loan debt’ is we’re saying to them ‘you shouldn’t have taken the only chance you had at being employable and having dignified work.’ That’s actually not a real choice.

O’Leary: Where do we go from here? Immediately after the election we saw the stocks for for-profit education companies shoot up. We are entering a new era of education policy. What do you think is going to happen? And as a critic of for-profit education, what do you want to see happen?

McMillan Cottom: I think that what is going to happen is what has been promised. I mean I take this administration at its word and I actually really worry that we don’t do that enough. To riff off of what someone said during the election, ‘the problem is you take Donald Trump literally.’

O’Leary: But not seriously, right?

McMillan Cottom: Actually, you take him both literally and seriously. I think that [President Trump’s] appointment of Jerry Falwell as a special advisor on higher education policy and then Betsy DeVos as the education secretary is a meaningful shot to education to public education. And we need to take it seriously. This administration does not have either a moral or ethical commitment to the idea of public education.

O’Leary: That is a strong charge.

McMillan Cottom:  I’m not even sure that they would disagree. I mean what DeVos said throughout her confirmation hearing was that the idea [of public education] was OK, but that that public education needed to be a market good. Well, then that means you don’t believe in public education, because by definition that is not what it’s supposed to be. Without that we do not have I think the push back that we need against for-profit higher education, which is traditional not-for-profit colleges just need to do better, and we can out-innovate, we can out-serve for-profit colleges all day long. We can’t do it with declining public subsidies, however, and when we have to constantly sue our government for the right to operate. Those political sort of machinations that are happening right now could make it much more difficult for a public higher education to do what it needs to do to better serve the students who are being so poorly served by for-profits.

O’Leary: You study the stuff you now teach at a public university. What would you do to change this?

McMillan Cottom: I think that we should say to a for-profit colleges, ‘if you want the esteem of being a college and if you especially want the access to federal student aid, 90 percent of your profit cannot come from federal student aid. You need to show that you generate some other contribution to the market and to the public that does not come from the federal student aid system. So I’m much more interested in this rolling back what’s called the 90-10 rule which says that for-profit colleges can drive up to 90 percent of their profit from Federal Student Aid, meaning they only have to look around for 10 percent of their profit margins from other places and even that they fudge by going after veterans dollars for example.

I would like to see us address that. It requires politics and that’s why people haven’t been as engaged in that. It would involve congressional action, but that’s the goal for me. More broadly if we can’t do that, or in addition to doing that, I think we need to attack the root reason why students go to these places to begin with. Overwhelmingly people I talked to said ‘I actually don’t want to go to school I just want a good job.’ As someone said to me who had served in the military ‘I’ve shot $50 billion worth of military equipment and they’re telling me I can’t be a bureaucrat somewhere without a master’s degree.’ We need to provide better protections for workers. That means turning back to the role of unions in increasing worker power at work so that employers are forced to invest in the training and development of workers without shuttling them off to for-profit colleges to get it on their off time. It means us going back and saying maybe we need to revisit things like minimum wage and of course my favorite job guarantee programs.

O’Leary: Does any of that seem possible in this political environment though?

McMillan Cottom: Absolutely not. But it doesn’t mean in the words of one of my favorite people, economist Sandy Darity, they once said the same thing about slavery. It’s not over until it’s over. Somebody has to be there asking for it and making plans for it to be logistically possible. That’s what I think academics could and should be doing at this point in time, showing how these things are politically and economically possible and to keep putting them on the table.  I think that things like social movements and people who organized around things like fight for 15 have exactly the right idea, that you can attack some of these things at the state and local level without necessarily relying on national politics, and [that] these are battles we can start to fight at the local and state level, and then take advantage of opportunities at the national level when they occur.

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