The Politics of For-Profit Higher Education

Back in June, David Brat, an economics professor at Randolph-Macon College, defeated then House Majority Leader Eric Cantor in the Republican primary for Virginia’s Seventh Congressional District. It ...

Back in June, David Brat, an economics professor at Randolph-Macon College, defeated then House Majority Leader Eric Cantor in the Republican primary for Virginia’s Seventh Congressional District. It was a remarkable achievement for Brat, a political unknown. He rode to victory on a surge of local pro–Tea Party sentiment, arguing that Cantor was an establishment figure in the thrall of corporate interests and a moderate who understood neither the principles of limited government nor the religious values on which the country was founded.1 When Cantor tried counterattacking, he reached for a powerful weapon in the conservative arsenal, claiming that Brat was nothing more than a villainous liberal professor in disguise. The charge didn’t stick, given Brat’s conservative reputation, but Cantor’s assumption that it would says a lot about what GOP policymakers are thinking these days when it comes to higher education.

I read Degrees of Inequality, political scientist Suzanne Mettler’s account of the rise of the for-profit sector in American higher education, not long after Brat’s win. The book is many things: well-researched, engaging, and, for what it reveals about inequality in the US and higher education’s contributing role, profoundly disturbing. It can also be a touch myopic. Though subtitled “How the Politics of Higher Education Sabotaged the American Dream,” it fails to recognize that the support given to for-profit institutions by Republican lawmakers (who figure prominently in Mettler’s story) is undergirded by strong political commitment—the same commitment that informed Cantor’s failed retort.

America’s colleges and universities have long been viewed by conservatives as bastions of liberalism, their professors as corrupt elites who exercise monopolistic control over higher education, bent on converting young minds to their redistributionist, relativistic, and secular ways. What conservative politician, then, could pass up the opportunity to shake loose the perceived monopoly by green-lighting the rapid expansion of an institutional competitor? Political dysfunction, which Mettler places at the center of her narrative, certainly factors in the string of bad decisions by policymakers that has allowed schools like the University of Phoenix, Kaplan University, and DeVry to achieve exponential growth in student enrollment and revenue. But strategic political action is also a crucial part of the story—discomfiting though it may be to those who think that straightforward policy fixes are all that are needed to restore American higher education to its mid-20th-century glory.

In recent years, as readers of Public Books will know, scholars, journalists, and reformers have turned their attention to the American university’s cost crisis. That crisis also serves as the backdrop for Mettler’s book. To illustrate its magnitude, Mettler notes that while tuition costs at private colleges and universities ate up about 16 percent of an average family’s income in 1973, that number had risen to 36 percent by 2010. (Because of scholarships and grants, most families don’t pay the full price, but the real increase is nevertheless considerable.) Public colleges and universities are a bargain by contrast, but even they take a hefty 11 percent out of the average family’s budget, up from only 4 percent 40 years ago. These cost increases threaten to make higher education the exclusive province of the upper-middle class. High school students today almost universally aspire to attend college, and lots of young adults enroll in some kind of post-secondary program. But where nearly 75 percent of young Americans from the top family income quartile end up earning bachelors degrees, only 10 percent from the bottom quartile does. This is not just a matter of differential preparation. Mettler shows that sizable family income differences in college completion rates persist even after accounting for scores on standardized tests. Once upon a time, going to college was a pathway to social mobility, a stepping-stone to a middle-class life for bright but underprivileged students. Now, regardless of a student’s talent, the costs of attending are often too much to bear.

But there’s an even more unseemly side to contemporary developments that Mettler thinks has been sidelined in all the talk about tuition hikes. Issues of cost notwithstanding, the US has a vast network of nonprofit colleges and universities able to deliver quality education and training to students in a bewildering variety of fields, and capable, at the top end, of producing shockingly good, innovative research that feeds directly into the knowledge economy. By most accounts, the American college and university system remains one of the best in the world. Yet more and more students are stepping outside that system for their undergraduate instruction. In 1993, Mettler points out, only 1.6 percent of college students were enrolled in for-profit schools. Such schools had existed in small numbers for decades but, being vocationally oriented and typically staffed by faculty without advanced degrees, were not in the same orbit as the more established institutions. By 2010, however, for-profits had come to enroll a remarkable 9.6 percent of American undergraduates, and new ones were opening their doors almost daily. These schools, catering largely to working adults from lower tiers of the class structure, offer students flexible schedules, online instruction, and coursework and degrees that promise to be immediately convertible into improved job prospects. Some are trade schools, but the largest grant bachelors degrees, and even masters and doctorates in select fields.

But, Mettler reports, there’s a problem with these schools: they’re a sham. First, they are far more expensive than the public four-year schools that are their nearest competitors. According to Mettler’s data, in 2012–2013 the average published tuition and fees at public bachelors-degree-granting institutions came to about $8,600. At for-profits, it was nearly double that: $15,172. Second, outcomes are worse. Fifty-five percent of students at public four-year institutions earn a bachelors degree within six years, as compared to 22 percent of students enrolled in for-profit schools. This fact, and the difference in educational quality it reflects, translates to major disparities in subsequent labor market experiences. (Differential student selectivity is also a contributing factor.) As Mettler explains, “Contrary to recruiters’ promises of high job placement rates and future pay, those who attend for-profits—as evidenced by recent studies—experience higher unemployment rates than those who pursue training in the same subjects at other institutions. And when they do attain jobs, they make lower wages.” Part of the reason educational quality is low in the for-profit sector, Mettler notes, is that for-profit schools—concerned above all with maximizing shareholder return—don’t spend very much on instructional costs or student support services.

So how do low-income students at for-profit institutions afford the high prices for-profits charge? They borrow. Students who earned bachelors degrees from for-profit schools in 2007–2008 racked up a median debt of almost $33,000. This debt is heavily underwritten by the US government through the student aid program. Beyond that, many students at for-profits receive Pell grants, and a substantial number are veterans or active-duty or reserve military whose service makes them eligible for military financial assistance. All of which is to say that the feds are footing a big chunk of for-profit students’ substandard education. The upshot, as Mettler documents, is that the leading for-profit institutions receive between 66 and 94 percent of their revenue from federal sources. They are, as she says, “almost entirely subsidized by government.” And by being so subsidized, they are reaping enormous profits, delivering consistently high returns for investors and staggering compensation packages for their CEOs.

There is, of course, one group for whom the for-profit schools would seem to be a very bad investment: the American public. So why have lawmakers failed to rein them in by, for example, insisting on higher performance standards, as measured by student loan repayment rates?

The growing influence of money in politics has meant that for-profit schools are free to pour millions of dollars into lobbying campaigns to protect and enhance their bottom lines.

It’s here that Mettler’s social-scientific analysis begins. She uses the phrase “policyscape” to refer to the present situation in higher education policy. Most of the policies we have to address things like tuition costs, student borrowing and grants, and accreditation were developed years ago, and “do not function as effectively as they once did.” She identifies several reasons why they’ve become less effective, which she bundles under the generic labels of “drift” (citing political scientist Jacob Hacker), “policy design effects,” “unintended consequences,” and “lateral effects” (as, for example, when increased state-level spending on prisons and healthcare necessitates cuts to higher education budgets). She identifies and invokes all four of these concepts in her detailed discussion of the history of policymaking relevant to for-profit higher education, a discussion that stretches across five rich chapters of the book. However important these factors, though, Mettler argues that two other, more global, developments are also central to our failure in the higher education policyscape: political polarization and lobbying.

Polarization—in the country as a whole and among political elites—has inhibited the formation of bipartisan consensus on higher education matters for the past three decades. Such a consensus generally prevailed through the 1970s and kept education policy sensible and current. At the same time, the growing influence of money in politics has meant that for-profit schools are free to pour millions of dollars into lobbying campaigns to protect and enhance their bottom lines. Mettler observes that until 2006, post-secondary institutions were required “to hold at least half of their classes on campus in order to qualify for federal student aid.” This rule inhibited the growth of for-profit schools, so they began a drive to eliminate it. They donated heavily to the PACs of Republican congressmen like Rep. John Boehner, who was at that point chair of the House Committee on Education and the Workplace. They hired lobbyists to press their case, arguing that working adults, and the economy more broadly, would benefit from a dramatic expansion of online instruction. These lobbying efforts proved successful, and opened the door to federal largesse.

Polarization and lobbying go hand in hand, Mettler argues, to create a “plutocracy”: when the parties fail to work together, opportunities arise for special interests to set the legislative and regulatory agenda. The interests of the broader public then go unrepresented. In a particularly sorry example that Mettler recounts, when in 2011 the Department of Education was preparing a new set of benchmarks that colleges would have to reach in order for their students to be eligible for federal financial aid, the for-profit higher education industry unleashed its lobbyists to rally Republicans and select Democratic lawmakers against stringent rules proposed by reformers. No major public group opposed the reformers’ rules, yet the compromise benchmarks eventually announced by Arne Duncan, under pressure from lobbyists, were significantly weaker. The for-profit industry could easily meet them, and they did almost nothing to incentivize quality improvement.

All this makes for good and important public social science. Mettler knows her way around Washington, and she has managed to produce a book that is at once deeply involved in the policymaking and highly readable.

But that depth is not without cost. Super attentive to the ins and outs of legislation, administrative rule making, and the maneuverings of K Street, she seems almost charmingly blind to policy’s ideological moorings. (Charming, anyway, from the standpoint of disciplinary difference, or so says the sociologist of the political scientist.) Their ideological predisposition is probably the most obvious reason that conservative Republicans in Congress have lined up behind the for-profit higher education industry. Beyond their support for almost anything with the word “industry” in it, conservative Republicans tend to be antagonistic toward higher education as an institution. Although they may have fierce loyalties to their own alma maters, they see American higher education on the whole, especially after the 1960s, as providing too many degrees in worthless subjects, too little workforce training, and a great deal of left/liberal political indoctrination. That the American professoriate, outside a small number of religiously affiliated schools, is vocal in its support for the Democratic Party—and increasingly so—doesn’t endear the institution to them, either.

Citing growing concern about whether universal post-secondary education is a desirable goal, Mettler quotes Rick Santorum’s 2012 remark that “President Obama once said he wants everybody in America to go to college. What a snob.” But she fails to comment on the kicker in the line of his that followed: “There are good, decent men and women who go out and work hard every day and put their skills to the test that aren’t taught by some liberal college professor.”

Conservatives are simply not going to lend their full support to nonprofit higher education unless they can be convinced that colleges and universities can be made to serve nonpartisan, or at least bipartisan, ends.

Pandering politicians aren’t alone in feeling this way. Echoing Jacob Hacker’s more general point in Off Center, a 2006 book coauthored with Paul Pierson, Mettler suggests that most Americans are supportive of the higher education system we currently have, and would like to see it better funded. There’s a disconnect between public opinion, which leans center left, and policy. But she passes over without comment the sizable partisan gaps in this support. In fact, a 2012 poll she cites registers a nearly 30-percentage-point difference between Republican and Democratic support for greater government investment in higher education. Likewise, a poll I conducted with sociologist Solon Simmons in 2006 for the American Association of University Professors found that while 51 percent of self-identified liberals in the US public have “a lot” of confidence in higher education, only 31 percent of conservatives do. That same poll showed that more than a third of Americans believe “liberal bias” to be a “very serious” problem for colleges and universities.

As I have tried to demonstrate in some of my other work, modern American conservatism as a political identity was built in no small part around opposition to what has been viewed, since the days of William F. Buckley’s God and Man at Yale (1951), as a liberal cultural elite entrenched in higher education. Often tangled up with more diffuse anti-intellectual themes that are no less a part of the American cultural repertoire, this identity has fueled political action. Yes, increased spending on prisons and healthcare are clearly factors contributing to decreased financial support for public colleges and universities nationwide. But in “red” states, at least, conservative hostility to liberal academia is a key piece of the puzzle. At the federal level, where the policy strings that legislators can pull around higher education are fewer, the chance to grow an alternative higher education sector largely devoid of pesky social science and humanities fields, and of the professorial gadflies and activists who sometimes populate them, must be something like a conservative politician’s dream. I don’t doubt that the contributions for-profit schools made to Boehner’s PAC influenced his thinking on whether tighter regulations were needed. But I would be very surprised if he and his colleagues were not favorably predisposed toward the cause.

The reason this matters is that it bears on solutions. In her final chapter, “Restoring the Public Purposes of Higher Education,” Mettler issues a plea for strengthening the nonprofit college sector and for once again making it a ladder to social ascent. States need to do a better job funding four-year colleges and universities, she says, so that families do not have to do so (in effect) through tuition payments. She also argues that it’s also time to reinvest in community colleges, which are well poised to provide post-secondary vocational training, and to increase the generosity of Pell grants. We need to get serious throughout the higher education space about assessing and maximizing student learning outcomes, she insists, and we should also think about offering special financial inducements to private colleges and universities with the aim of increasing the number of low-income students in their entering classes. Most important, she argues, we need to clamp down on for-profit institutions that are failing students and bilking taxpayers.

Mettler acknowledges that these reforms will be tough to achieve in the present political climate, and offers some concrete steps that might be taken to bring us back to an era of sane policymaking. For example, we might reduce the debilitating effects of polarization on governance by rewriting Senate rules about filibusters, and we might push back against plutocracy by putting more restrictions on campaign contributions from lobbyists.

These are reasonable proposals. But the truth is that, whether we’re talking about regulating for-profit higher education or building the nonprofit college sector back up, there won’t be much headway unless conservatives get on board. The GOP faces demographic challenges in the immediate future, but empowered conservatism is here to stay. And conservatives are simply not going to lend their full support to nonprofit higher education unless they can be convinced that colleges and universities can be made to serve nonpartisan, or at least bipartisan, ends. How American higher education (and the liberal arts in particular) might be reimagined within a nonprofit model so as to make it less of a political football may seem to be at a far remove from issues of inequality. But in 2014, there’s no separating partisanship and governance. icon

  1. See Jennifer Steinhauer, “Once Snubbed, David Brat Turns the Tables,New York Times, June 11, 2014.
Featured image: A University of Phoenix campus in Woodbury, MN (2008). Photograph by piratejohnny / Flickr