Introduction: College for Dollars?

Here is a Benno Schmidt anecdote to go with the one my co-editor, Susan O'Malley, uses in her article (below). Some years back, at a conference for administrators organized by University Business magazine, former Yale president Schmidt gave the keynote address. He had become head of Edison, the for-profit schooling company, and he spoke enthusiastically about the benefits his new project would bring. During the question period, I asked him if we could expect its benefits to rival those enjoyed by health care consumers since the system's takeover by HMOs, insurance companies, and big pharma. He paused a second to take in the hostile intent of my question, then replied, "Even better," and went on to enumerate. I do not remember his list, but one thing we can certainly enjoy about the privatization of higher ed is the rich vein of black humor in news reports of recent years. For instance:

• • Bridgepoint Education Inc. bought a private, accredited college in 2005 and another in 2007. The total enrollment of the two, at purchase, was 400 students. At the end of 2009, it was 53,688, 99% of whom took courses exclusively online (Daniel Golden, "Your Taxes Support For-Profits as They Buy Colleges," Bloomberg.com, March 4, 2010). [When a for-profit takes over the accreditation of a college it acquires, it represents that it will preserve the mission of the college.]

• • A number of for-profits receive 80-90% of their revenue from the federal government in the form of financial aid for their students. This is the free market?

• • An associate degree from one of Education Management Corp's (EDMC) art schools costs on average about $50,000 ("With Goldman's Foray Into Higher Education, a Predatory Pursuit of Students and Revenues," huffingtonpost.com, Oct. 14, 2011). EDMC, which owns a bouquet of around 70 "colleges," gets 70% of its income from us taxpayers.

• • Given that income stream, enhanced by the fact that, unlike subprime mortgages, default on these subprime tuition loans is entirely a matter between the student and the government, it is no surprise that recruitment of students has become ruthless. When Goldman Sachs became one of three partner-owners of Education Management, the admission staff tripled, to a sales force of 2,600, around the country. Heavy advertising; cold-calling; on-street hustling ("With Goldman's Foray"). A Radical Teacher board member walks regularly along Broadway, near 33rd street, past for-profit recruiters hailing passers-by like carnival barkers. Our guy told two men hearing the sales pitch that it was a scam; they should go to a community college. They agreed and walked off. The recruiter followed our guy all the way to his gym, yelling "I don't shit in your kitchen, don't you shit in mine," and the like. Bounty payments for such recruiters were common until the federal government began investigating them.

• • When Christopher Beha went underground to take classes at a New Jersey "campus" of the University of Phoenix, and write about it for Harper's, his application form asked for his high school and year of graduation; that was the entire academic portion of the form. No transcript required; Phoenix did not check with his high school to confirm. I call that wide open admissions (Christopher R. Beha, "Leveling the Field; What I Learned From For-Profit Education," Harper's, Oct., 2011).

• • Really wide open admissions: a spokesman for Phoenix defended the University against allegations of especially lowdown recruitment, saying the company does not allow recruitment at homeless shelters, and "any employee who violates this policy faces disciplinary action up to and including termination" (Melissa Korn, "Party Ends at For-Profit Schools, Wall Street Journal, August 23, 2011"). Wider open still: "Frontline" told of a college recruiter at Camp Lejeune who signed up Marines with serious brain injuries; the fact that "some of them couldn't remember what courses they were taking was immaterial," so long as they qualified for G. I. Bill benefits. (Hollister K. Petraeus, "For-Profit Colleges, Vulnerable G.I.'s," New York Times, Sept. 21, 2011).

There are signs of...