Should For Profit Colleges be Responsible for the Gainful Employment of Graduates?
The Association of Private Colleges and Universities is suing the Obama administration over regulations released last week. The new rules are intended to address the alleged inability of their graduates to find employment sufficient to provide an adequate income while paying off their student debts. Specifically, they would stop funding for training programs which yielded a poor ratio of earnings to debt for graduates.
Considering that a large portion of the funds used for tuition at these for-profit institutions originates as tax-based student loans, the attempt to keep this income flowing to the institutions can seem to be a sign of an entitlement mentality with little regard for either the taxpayers who are footing the bill or the students who should be benefiting.
Many may be reluctant to interfere with the current system out of the belief that privately operated education (even if it is publicly funded) is superior to public, and therefore best for the economy in the long run. This ignores the fact that the high student loan debt rate is having a crippling effect on entrepreneurs’ capacity to fund a small business, or buy a house. As Christian Broda explained in ValueWalk, this has had a ripple effect on the economy. There has to be a better way to help young people prepare for their careers.