Bruce Bialosky

America’s accumulated college-loan debt will surpass $1 trillion this year; what is our leadership doing about it? The Obama Administration took over the student loan market and expanded Pell Grants, but hasn’t accomplished anything to address the root cause of the crisis: exploding college fees and related costs. The only thing they’ve done is criticize innovators and entrepreneurs.

The Senate Committee on Health, Education, Labor, and Pensions (HELP), chaired by Senator Tom Harkin (D-Iowa), issued a new report calling into question the costs and performance of For-Profit universities. There are actually hundreds of these schools, perhaps the most well-known being University of Phoenix and Devry University. The report provides some damning statistics about For-Profits which should concern us all, since a large amount of free federal money (Pell Grants) is handed out to their students. Their cost of recruiting is much higher than private and public universities (the Establishment), and their four-year graduation rate 31 percent compared to 52 percent for Establishment schools.

When I read the report and its analysis, my only thought was “Wow! Is the committee staff really this dense?” Here are a few points:

1. Wouldn’t you expect the graduation rates to be lower at For-Profits? After all, how many of the best students in the country are going to University of Phoenix rather than Yale, Stanford, UCLA, or Texas? It’s obvious that they’re not attracting top-tier students, so it makes sense that their dropout rate would be higher.

2. The fact that more money is spent on recruitment also makes sense. Every high school in America has guidance counselors who direct students to Establishment colleges. Have you ever heard of a high school counselor telling a student that he should be going to Devry? The report leads one to believe that Establishment schools average a little over one staff person who does recruiting. Obviously, the people who compiled that statistic never had a kid go to college. That is just foolish.

3. The report also talks about the cost per student, but the numbers used don’t reflect the huge costs underwritten by states for public schools, or the cost to the federal treasury for tax deductions taken for “charitable” donations to Establishment schools. The comparison of costs is absolutely and totally slanted.

This is the fourth “study” done by this committee on For-Profit colleges in the last two years. And how many have been done on Establishment schools? Zero. One might come to the conclusion that someone has a vendetta against For-Profit schools. Since the Committee Chair is Senator Harkin, the finger must be pointed at him.


Bruce Bialosky

Bruce Bialosky is the founder of the Republican Jewish Coalition of California and a former Presidential appointee. You can contact Bruce at bruce@bialosky.biz