The Trouble With For-Profit Education

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For-profit education has taken heat lately, and that heat turned up considerably this week with a The New York Times story on Kaplan. The Times' Tamar Lewin documents how the test-prep company has "moved aggressively into for-profit higher education, acquiring 75 small colleges and starting the huge online Kaplan University." She reports that concerns are rising about students graduating laden with debt, promised higher-earning jobs that don't materialize. There are stories of recruiters targeting single mothers, the unemployed, and those with "low self-esteem" or who have been "physically or mentally abused," assuring them that "massage therapists earn $100 an hour, and that student loans need not be paid back." Pending lawsuits "allege Kaplan kept students on the books after they dropped out, inflated students' grades and manipulated placement data to continue receiving [government] financial aid." Kaplan denies the allegations, but the Times talks to a number of former employees who side with those critical of the company.

The piece has made the rounds slowly, with bloggers examining, in particular, Kaplan's connection to The Washington Post through the parent Washington Post Company. The Post has provided defenses of for-profit education on its editorial pages.

  • Please--Plenty of Students Graduate With Debt  "If you're going to go after schools for charging a lot and graduating students with poor job prospects, there's no reason to focus on the for-profit sector exclusively," writes a skeptical Glenn Reynolds, conservative blogger. "Unless," he continues, "you're just attacking the competition on behalf of the existing education establishment."
  • Dividing Along Political Lines  Reynolds doesn't come down terribly hard on Kaplan, but liberal Think Progress's Matt Yglesias does. He himself points to evidence of the for-profit debate dividing along political lines: "the new GOP majority in the House of Representatives," he notes, "has decided that taxpayer subsidies to low-performing for-profit colleges like Kaplan is one of the forms of wasteful government spending they like."
  • How Kaplan Is an Issue for Taxpayers  Yglesias distills the issue, taken from the longer New York Times story, into a more easily-consumed paragraph:
The basic business model of the Washington Post Company's key business unit is as follows. They say "in exchange for paying us money, we'll provide you education services that pay off in the long run." Potential customers think that sounds like a good proposition, and they avail themselves of taxpayer-subsidized loans in order to take the Post up on their offer. But 72 percent of the Post’s customers find that they're actually unable to repay those taxpayer-subsidized loans.
  • The Conflict of Interest for the Post  As Yglesias also clarifies, "the Washington Post company is most identified with its newspaper, the Washington Post. But in fact its biggest source of revenue is its Kaplan subsidiary." Columbia Journalism Review's Ryan Chittum takes it from there, noting that the troubling part of the story in terms of journalistic ethics is that "the Washington Post's chairman, Don Graham ... 'has emerged as the highest-profile defender of for-profit education,' which is somewhat problematic for somebody who controls one of the most important newspapers in the country." To make matters worse, "the Post itself has campaigned against regulating its cash cow in its own editorial pages, while the news side hasn't exactly done much on this significant story." He's glad to see the actual paper's print ad revenue on the rise, because as more exposés like this come out, "it's looking less and less likely that its Kaplan cash cow is going to be able to support the whole enterprise quite like it has been."
  • Why This Is a Big Story  This sort of complicated, slightly worrisome business model is "nothing new in the world of conglomerate journalism," writes popular blogger Atrios. "But something like the WaPo has unique power and prestige which it is employing fully in order to increase profits in the profitable bits of its empire."
  • Is This Journalistic Conflict of Interest a Trend?  "As national newspapers become increasingly unprofitable," worries DougJ at Balloon Juice, "it may be that their own value is as a source of prestigious-sounding propaganda in the service of the money-making branches of the conglomerates that own them."

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