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Comment by nickff | Hacker News Reader

There is informational asymmetry in every transaction (as well as in non-profit schools); this is a red herring (unless you can show that it is causing a specific, large, unsolved problem). The current administration has repeatedly demonstrated hostility towards for-profit schools, and has chosen to use discretionary enforcement of rules against them rather than enforcing standards universally, because they know that the standards would hit many non-profit schools as well. I am not sure about the specifics of this case, but the Department of Education has been looking at for-profit schools much harder than non-profits.

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>There is informational asymmetry in every transaction

Yes, but informational asymmetry is a much bigger problem for larger, less frequent decisions, like buying a house, or going to college.

With small, frequent decisions, like buying groceries, you can quickly learn from your mistakes and the harm done from potentially choosing an inferior/overly expensive grocer a few times is small.

With college, if you don't figure out that the educational provider was poor until after you've graduated, you're already wasted tens of thousands of dollars and years of your life for a useless degree. That's a much bigger issue.

> if you don't figure out that the educational provider was poor until after you've graduated

Is using google that difficult?

After all, I went to college before the internet, and didn't have any trouble finding reviews of the various options, and used that to form a list to apply to. With google it's a few minutes' job.

There's never been less information asymmetry.

So you base your life-changing decisions on Google?! That's smart, go on, you'll go far...

What source of information do you suggest starting with when researching which colleges to attend?

> I am not sure about the specifics of this case, but the Department of Education has been looking at for-profit schools much harder than non-profits.

This seems fair to me. You can argue that wasted money at NFP schools ends up in someone's pocket, but bald faced "every buck not spent educating you" going into the pocket of capital seems worse.

If the outcomes at FP higeher education aren't better, why not avoid funneling federal money (in the form of no interest loans, etc) directly in private profits?

Non-profits are often compared by examining their overhead as a percentage of total spending, rather than their efficacy per dollar (or overall). This holds back many great charities, and benefits others which consistently waste money on doomed projects with low overheads. It seems to be just as wrong to assume that retained earnings or dividends are wasted overhead and compare organizations on that basis alone.

No doubt ITT's problem is that Kaplan University had already hired Anita Dunn and there wasn't another White House staffer ready to transition to the private sector.

Kaplan University? Somehow affiliated with the test prep company?

The existence of information asymmetry isn't per se the problem, no, of course not. But it's not a red herring to mention if we can look at the world and see the information asymmetry doing active harm, which I think most commenters here would agree with. The opinion that large numbers of for-profit schools are convincing people to give them money and then providing almost nothing useful in return is so widespread now that I'd assume it to be everyone's default unless they specifically mention otherwise.

I would agree that "[t]he opinion that large numbers of... schools are convincing people to give them money and then providing almost nothing useful in return is so widespread now that I'd assume it to be everyone's default unless they specifically mention otherwise." According to the signalling theory of education and the opinion of many commenters here, a great deal (possibly a strong majority) of post-secondary education is a complete waste of time and money. It's not that I think these schools are providing useless experience and knowledge, I just think the non-profits are doing about the same.

Graduation rates at non profit schools are appalling. University of Pheonix routinely graduates less than 20% of its students within six years. Even if all of the benefit is signaling, which I disagree with, the students at many for profit institutions aren't even getting that benefit.

>>Graduation rates at non profit schools are appalling. University of Pheonix routinely graduates less than 20% of its students within six years.

I am talking about both (for and not-for profit) universities.

Isn't graduation a responsibility of a student too? If a student is not graduating, isn't there a chance that he/she is not sufficiently working for it?

If a student is not graduating, isn't there a chance that he/she does not have what it takes to learn a subject?

The students should do a little bit of homework before joining any university: does the university seem suitable for me? do I seem suitable for the university? do I think I am capable of handling the study work? what is the quality of the faculty? what the almuni are saying about this university? what the other academics are saying about this university?

If a student cannot or will not do this little bit of homework, then I guess he/she deserves to be surprised (may get a good surprise if lucky else bad surprise).

Many state colleges have low 6 year graduation rates too (as they vary widely), should they be shut down too? Is there any reason 25% or 30% are unacceptable, but 50% is fine?[1]

[1] http://collegecompletion.chronicle.com/

A 50% graduation rate is literally double a 25% graduation rate. You're arguing that the only reason for the US government to care about the fact that students at for-profit institutions are half as likely to graduate is because they've got a grudge against them, as though this is some minor difference that no-one should care about.

And, sure, a 50% graduation rate at a state college is a big problem that should be investigated as well. But it's definitely not true that "all of the state colleges" have this problem, whereas it (as least seems to be) ubiquitous among for-profit schools.

"Department officials say they are acting out of concerns raised by the for-profit chain’s accreditor, the Accrediting Council for Independent Colleges and Schools, that ITT is not living up to the demands of its accreditation. ITT is under threat of having its accreditation revoked"

Thanks, but I read the article. Do you have any additional insight?

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