Inside the sordid world of America's for-profit colleges | Hacker News Reader

Inside the sordid world of America's for-profit colleges

theguardian.com

139 pointsSmkyMt65 comments

When I first started teaching in higher education the implied client was society at large. It was my duty to ensure that those who passed knew the material sufficiently well. This was when a student's tuition paid for 1/3 of the cost and the government funded the other 2/3.

Now it's the other way around. Now the student is the client. Now I no longer think it's my duty to ensure that those who pass know the material. It's my duty to keep enrollment up because we need the tuition dollars. I'm constantly hounded to increase my passing rate. No one who matters to our funding cares about people knowing the material they are supposed to be learning.

In the last assignment for the algebra course I'm teaching a student changed all fractions in a weird inconsistent way. For instance they changed 3/4 to 34 but then changed 5/7 to 75. No apparent rhyme or reason. This is the type of person we recruit and the type of person I'm supposed to pass.

The for profits are bad but we aren't much further behind.

At my current institution a new lecturer got a chewing-out from the departmental chair because the pass rate in an introductory class was too low. The institution managed to keep enrollment constant but had to drop admission standards markedly this year to be able to do so. Other faculty members noticed the poor performance of the incoming freshman class compared to previous years as well.

New kid came fresh from a PhD program at a credible university and thought the purpose of a university lecturer was to teach to a minimum standard. The naivete!

This is at a large state school in the Southern US.

I'm doing a CS degree currently and I'm somewhat amazed at how easy it is but also at how much the other students struggle. I do a bunch of extracurricular activities such as mathematics problem-solving seminars with two professors (there are only 4 students that attend and I'm not even a math major!), cyber CTF events, hobby projects, etc. These extra activities are making my learning far outpace my education and I really wish I was at a "harder" university. I've sort of reached a stage where the units themselves are formalities and just provide a framework where I build other knowledge.

The majority of my class struggled with mathematical induction, which literally has two steps and is not designed to present a challenge. The C programming assignment that required a simple use of fork()? A major problem for a lot of people. I could go on and on about it.

The only upside is that every single professor I've had seems to enjoy passing on knowledge when you're actually interested. I've had 500+ word replies to questions I've asked on the forums. I've had professors help me weeks after a unit has finished with problems that are only slightly related to what they taught. If you treat your university experience as an opportunity to learn and have exposure to brilliant people then it is really productive.

Ha. I've told new hires that one thing they must keep in mind is that this job is not about teaching.

As Robin Hanson has said, school is not about learning [1]. Increasingly it feels that higher education is becoming a cargo cult, a coming-of-age ritual where you jump through certain hoops in order to be awarded a piece of paper which then gives you access to jobs.

[1] http://www.overcomingbias.com/2010/08/school-isnt-about-lear...

IMO there is a difference between K-12 and higher ed.

K-12 is actually more about enforcing cultural norms of dilligence, punctuality and ideally some civic norms.

Higher ed (paraphrasing Peter Thiel) is a mix between insurance and a tournament. It is _supposed_ to ensure a basic living standard. But it's also a competitive tournament where the high prestige colleges grant access to higher pay/prestige careers.

Agreed that Hanson focuses on primary education in that article. I could've sworn he has written similarly about higher education but couldn't find anything relevant by quick googling.

Yeah, Hanson has similar thoughts on higher education:

https://www.businessinsider.com/is-college-a-waste-of-time-a...

> Higher ed (paraphrasing Peter Thiel) is a mix between insurance and a tournament. It is _supposed_ to ensure a basic living standard.

No, it's not.

Whether it's supposed to or not, that's how it's viewed. Also viewed as an economic ladder by lots of people including low-income and minority.

I was fortunate (?) enough to have a Ph.D. advisor who told me flat-out: "Don't express an interest in teaching. It's career suicide. Undergraduates are stupid and you'll waste your time." It still bums me out, first of all that this is how a tenured professor thinks about undergraduates, and second that this is probably a clear-eyed and honest appraisal of the system as it stands. What exactly are we doing at big land-grant universities, if not trying to educate the young citizens of our state?

Change the system for professional program admissions, internships, masters, etc.

If they depend on marks and references so much, resourceful students will focus on acquiring those.

Is it a "top 10 public school" by chance?

I would be interested to see how the school has changed over that time period. Specifically, the administrator to student ratio, the number of new deans or other fundraisers, and the number of new buildings erected.

It seems like every school has a brand new student union and student workout facility.

This. A major reason that college is so expensive is that they aren't really schools, but mini cities within a city. Don't see why they can't just offer classes and let the students live the rest of their lives like everybody else. Works fine in Europe.

Well, the federal government decided to extend a $70K line of credit to 18 year olds, and university administrators aren’t going to miss a chance to exploit the naïveté of these vulnerable young people. So it’s not a matter of whether or not we should fleece our students, but how long will we allow university administrators to get away with it (Note that none of this is particular to private universities, public universities are every bit as bad).

nailed it

At my college not much. We are a public institution and cater to urban students who mostly are working adults.

The for-profit education model would work much better if there were no special class of “student” loans, and instead the loans offered were normally dischargeable in bankruptcy. This would cause colleges to charge manageable tuition and bankrupt the colleges that produced graduates unable to pay.

The current situation of student loans is a racket, and for-profit universities like Corinthian exist specifically to fleece the government. Destroying the lives of their students is a byproduct.

Don't forget Grantham University and University of Phoenix. They specifically prey on veterans for their GI Bill money.

yes, this dynamic is by now a well-known moral hazard, and yet we still have this system. why? one reason is because it's advantageous to capital holders, who are more effective at attracting and aggregating that risk-free money (the fairness rebuttal, that non-dischargeability reins in fraud, is a non-sequiter obscuring the main underlying issue).

people rightly correlated education with social and financial success, but wrongly inferred a causal relationship between the two. universities were more a way for the wealthy to identify and promote each other, rather than bestowers of magical money-making skills to all (although it can do that too, but that's not the majority or primary outcome).

so politicians, in an effort to level the playing field, saw that loans were one (minor?) impediment to higher education. in the rush to address that issue (and earn kudos, jobs, money, or whatever), those politicians ignored (possibly willfully) the real, and much harder, barriers to upward mobility. they wanted a clear win, and government-guaranteed loans were it.

and this (simplified) narrative leaves out many other proximal complications. it's very hard to identify the root cause(s) of systemic problems, much less fix them. most people are not incentivized, nor have the patience, to do so. politicians were trying to provide upward mobility, but rather solved a financing problem instead.

(n.b. - i benefitted from government-guaranteed loans to attend a good university that otherwise would have been out of my reach)

If students can discharge their loans in bankruptcy, then what stops this from becoming standard practice on graduation day? After all, a student has no assets to auction off. The education they received cannot be taken away from them.

They were dischargeable in bankruptcy until 10-15 years ago.

I don't believe declaring bankruptcy on graduation day was ever a standard practice, nor do I see why reversing the discharge exception would change that.

By and large, people intend to repay debts they incur, and they don't want to deal with the 7 to 10 years (not sure of exact duration) of bad credit that results from bankruptcy if they can avoid it.

Having difficulty buying or leasing a home or car without paying the total cost up front, inability to get those jobs where a credit check is involved, etc... that will never be standard practice by choice.

Why should that be stopped? That should be part of the risk the underwriters take into account when making the loan. Of course, the outcome of that would be that a large number of degree programs would no longer offer any meaningful loans, and then students would hopefully not be graduating with 50-100K in debt for a gender studies degree.

The only way to have institutions underwrite a loan for a degree that has limited economic value is to make the debt nondischargeable.

So, you either have nondischargeable loans for these types of degrees, else you start having the difficult conversation that maybe everyone doesn't actually need to go to college.

Obviously, one of those arguments plays well.

They have to go in front of a judge. Do that the day after graduation, and the judge will not be inclined to approve the bankruptcy.

yes. just have them do it. student loans are fundamentally unsecured loans because they aren't collateralized. amounts loaned should be comparable to credit cards and other unsecured loans, and support of student enrollments should be through grants and scholarships, not loans.

Your threat model is crazy. Yes people can cheat the government but only at a greater cost to themselves. Working 6 years at a good job to do nothing but repay student debts is still far preferable to being bankrupt and ruining the first 6 years of your career.

I'm not sure how bankruptcy works in USA but I doubt it is instantaneous. In Germany you have to liquidate your assets and your income is taken (often everything above minimum wage) to repay your debt and only after 6 years have passed is your debt fully discharged if you cannot cover the whole debt within those 6 years. This means that if your goal is to pay less back than you owe you will have to earn below minimum wage which is far more damaging to your career and well being than just paying the debt without bankruptcy.

Even if for some unbelievable reason degrees are now worthless and only give you access to below minimum wage jobs then the demand for them will shrink and therefore the cost per degree will also go down until it is possible to pay them via minimum wage jobs.

Different degrees have different rates of ROI. When people declare bankruptcy banks have to increase the interest to cover the loss from bankruptcies. If engineering students have a lower rate of bankruptcies because they earn a lot of money then they will pay less interest on their loans which reduces their debt burden and encourages more people to study this degree. On the other hand if a degree has a 30% bankruptcy rate then the interest will rise which increases the debt burden and discourages people to choose that degree.

This is exactly the type of situation that calls for a free market solution.

Wouldn't that require that the school provide the loan? If the debt is not held by the school then they are not impacted by bankruptcy. I like the theory of what you are saying but I'm not sure I want schools to become creditors.

If you have to get a loan from a private company, and all of these students default, then the private company will not longer offer loans for education from the bad institution. If the college’s students can’t get loans, they either shutdown or charge tuition that can be paid out of pocket.

The root cause of the entire problem is outrageously large loans, provided by the government, that can never be discharged. Until we solve this problem, tuition rates will continue to rise inline with the maximum the government will allow.

>The root cause of the entire problem is outrageously large loans, provided by the government, that can never be discharged.

And given without any regard for the value of the investment. We don't allow banks to lend people $200,000 to buy a house we know is only worth $20,000 so why is it okay for Sallie Mae* to?

edit: Sallie Mae, not Fannie Mae

If student loans granted to students studying in for-profit schools became dischargeable in bankruptcy, then lenders would be incentivized to consider their graduation rates and employability of their graduates before granting loans.

I wonder what percentage of the current population would be unable to attend school under your model. If you couldn’t get a loan, you couldn’t attend or you would have currency exchange level interest rates for the poor.

Other countries have a more socialized system and still maintain lower costs (same as healthcare). Maybe the problems actually lie elsewhere.

I’m talking about for-profit colleges. If you want a socialized model where profit isn’t the goal, the game changes, but I would argue that ostensibly “non-profit” colleges (and other types of non-profits as well) are considered for-profit by the people who earn salaries, especially the upper echelon of employees with 7 figure salaries. They are non-profits in terms of goals and not having shareholders, but the employees earning money are incentivized to keep revenues flowing.

Although for-profit colleges are the most egregious, the absurd rise in tuition across the entire education industry is driven by government-backed loans that cannot be discharged. If we moved the loan system to the private sector, and forced hard decisions to be made about the cost/benefit of education, there would be short-term disruption but longterm stability.

> and instead the loans offered were normally dischargeable in bankruptcy.

Well yes, when you can legally steal money, it logically follows that it becomes much easier to spend said money.

I can't begin to describe how corrupt these institutions are.

A few years ago, I had to (for stupid work reasons) take an official test to get a Cloudera certification. I went to a for-profit university testing location to do so.

It was one of the big chains.

While I waited and waited for the grossly incompetent staff to get the testing machine working, I sat and listened to students coming in to an office concerned with payment. The door was wide open, and I could hear the conversations clearly.

People who weren't equipped to a level of waking up on time, let alone getting to class, were trying to stop attending classes and leave. They were repeatedly goaded and told that they should stick with school, despite the fact that there was zero chance these folks were going to be able to get jobs with these bullshit degrees.

All financed by US taxpayer subsidized loans that aren't covered by bankruptcy. Truly depressing and made me sad.

On its face, some entities just oughtn't be for-profit. The evidence for, and obvious risk of, perverse incentives going totally bananas is just too high.

- Educational institutions

- Hospitals

- Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld)

> Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld)

Can and do. Check out Grant's Pass, OR.

Three competing private fire companies, one of which was dubbed "the worst fire department in America" and after repeated excursions into infamy/incompetence, was yanked by the Oregon State Fire Marshal:

* https://www.youtube.com/watch?v=RhD_5T4F7aw&t=255s

* https://www.youtube.com/watch?v=PaG6fYBKXg8

Prisons. Especially prisons.

> - Fire departments (i don't think these exist, at least not yet, but the idea comes up in Discworld)

These have existed.

(Reference: https://www.smithsonianmag.com/smithsonian-institution/early...)

And in Rome, where famously Marcus Licinius Crassus' private fire fighters would arrive to a fire but first haggle over the price before attempting to put it out.

If memory serves, "fire fighting" as we know it now didn't really exist at the time. He would negotiate to buy the land. Once he did, his slaves would basically tear down the building and potentially any nearby ones to contain the fire.

- police forces

- military

- prisons

I think we'd be fine with private security for many cases where one can possibly hire private security today. Events or locations where lots of people are present (concerts, train stations) or places where service is so terrible you need a cop on hand to scare people into not flipping out(city hall, DMV) should probably use private security.

Having a security company to sue or to not hire next time corrects the lack of incentive to not be jerks that a lot of police departments seem to lack. The publicly funded police should do more investigating and less patrolling/standing around.

It's not so much that it's for profit, but who pays. For most things we don't care if not everyone gets it so free market works best. Things that we require everybody to have are best paid for by taxation. And hybrid systems are a disaster. I can't think of any exceptions. But if the government pays $100 to put a cast on a broken arm and a hospital figures out how to do it for $50 and profits, I don't see a problem.

Health insurance industry. To maximize profit for shareholders, they minimize payout to clients.

The minimum payout is fixed by law. Of course this create the incentive to increase costs rather than reduce them, given that their margins are capped.

I can't say that I've ever seen the word "oughtn't" before. I get that it is a contraction of "ought" and "not", but it seems more difficult to say and the same amount of characters.

Seems familiar enough to me (as a UK reader). Some dictionaries suggest it has become rare in North America, however.

I can't say I see it in text much, but it is fairly common in spoken UK English (though in my particular dialect it often gets further shortened to something approximating ough'n't).

- pharmaceutical companies

I'm also highly aware of how much UK higher education has changed. Warwick University for example has grown enormously and advertises heavily, relying on attracting overseas students and research grants.

The bigger question in my mind is whether this is inherently 'bad'. The Academy of Art University in San Francisco was founded as the Academy of Advertising Art by Richard S. Stephens in 1929 as a vocational training. Like Warwick in the UK AofA Uni is now enormous (biggest property owner in San Francisco) and attracting foreign and out of state students.

There seems to be pretty low barriers to entry (except high prices) to attend AofA and be taught about the arts. Whether this is a good use of time and will lead to a career is highly debatable. I wonder about the regulatory aspects as these giant institutions become an important part of local economies and seasonal housing, and whether the money gets in the way of the academic realities

I feel like the difference lies in that Warwick (and some other UK universities who do the same thing, including my own) do still have a relatively high barrier to entry that sets them apart from the American for-profits.

Not to say that Warwick & other institutions aren't as for-profit as places like Corinthians, but they definitely manage to get away with it by still maintaining academic excellence.

You could make the argument that the ivy league is 'for profit' but their qualifications will typically get you a career to pay off your massive student loans...it's the quality of what's being sold that is the interesting element here, I'd suggest.

Academy of Art University SF has been controversial for decades, however amazing locations .. it might be great fun .. Art schooling is non-linear anyway.. this may not be your best example to refute the integrity of a private college.. there are other for-profit colleges in the greater US that certainly do fit the "diploma mill" stereotypes, but not this one.

As a former employee of one of these (quite famous), the curricula are oftentimes relatively good, with an emphasis on practical skills. But it’s difficult for me to see them as a good thing given the issues marked out. Many of them take lots of government money (through GI bill etc) as well

"For profit" College is fine. No one is making you give your money to them. Especially when you could attend a much cheaper community college in the middle of nowhere for a 1/50th of the price.

"Government subsidized loans" given to people which no creditor would rationally give you money are the problem. Who would honestly lend you $175k to receive a music therapy degree and hope for a return on their investment? I'm not to say that such degrees could not be a satisfying career path for an individual, but the "fund everyone" program in the USA is the root issue.

In the middle of this entire mess sits the federal government with its interest payments, payment deferments, and loan guarantees.

Loans are made to people who not only have no business going to college, but have no business taking out a life-altering loan as their first step into adulthood.

Everyone is affected by this problem, as the flood of easy money has contributed to the steep rise in tuitions across the country. The result is a vicious cycle of inflationary bubble economics.

Here's hoping the documentary covers this angle.

I worked at a call center for a random online for profit uni as one of my first jobs.

Quickly saw we were calling random leads generated by click bait ads like “become a swat expert” or enter to win type stuff.

We would call people who had no idea they had signed up to get called and push them to “further their education and future”.

First priority was to check to see that they could get a loan. Then aggressively get them to sign up for school.

I had access to the online courses and they were absolute trash.

Complete racket based on federal funding.

Couldn't you start a small for-profit uni that uses all the tactics described in the article to recruit students, but then pay teachers to deliver a high quality, practical education?

You'd get all the benefits of the loan lock-in. Your grads would have a higher likelihood of getting a decent paying job that would pay back the loan in a shorter time. Then you could aim your collections aholes at your dropouts and use the loan lock-in as leverage-- either they keep getting their part-time wage garnished or they finish the program so they can get a higher paying job.

The main problem as I see it is the dynamic that "if you pay, you pass". I've seen first hand the unwillingness to fail students who have done no work and have zero aptitude or willingness to learn. And that's just the lazy ones. I'm not even including the students who tried but will do poorly. They all get passed! I've only seen one person be failed, and it took several months of investigation before it happened. They didn't attend any sessions or lab project work for months, but they didn't want to kick them out because they were a rich foreign student.

This clearly devalues a university education for those who do work hard and succeed. And it also devalues the institution for its lack of intellectual rigour and enforcement of strict standards.

I would be more than happy for paying students to be held to strict and high standards, but having money be a big part of the equation seems to have corrupted even well regarded universities. (My perspective is from the UK universities; when the courses were completely funded by the government through local education authorities, they didn't have a problem with giving mediocre or bad students the boot, but today it's nearly impossible.)

Is this really a problem? America seems to place far more importance on the freedom of an individual to scam or fleece other people, rather than on protecting people from their own weaknesses.

Scammy for-profit colleges seem like one of dozes of byproducts of this mentality and there's no reason to think Americans would like to have it any other way. In fact, it often seems to me as if Americans reserve extra respect for these scammers for being so good that they're able to convince and con so many people.

You're right that we seem to have extra respect for these scammers. After all we did elect one President.

Most of your presidents were scams. Obama, for example extended the surveillance state much more than even Bush did.

Haha good one!

I wasn't even trying to make a joke. The guy literally had to pay a $20 million settlement for the fraud around "Trump University."

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