ITT Technical Institute’s Closing Leaves For-Profit College Industry Struggling To Survive
SEP 7, 2016
CCAP , CONTRIBUTOR
The announcement yesterday that ITT Technical Institute, with some 130 campuses and 40,000 students, was abruptly closing made page one in leading newspapers across the country, and is a major milestone in the Obama Administration’s war on for-profit colleges and universities. The ITT closure joins that of Corinthian Colleges last year, leaving a once vital and important segment of American higher education struggling to survive. Can the remainder of the industry last the 135 days or so until this administration is out of office? If Hillary Clinton is elected, will she continue to try to wipe out the vestiges of a once vibrant contributor to innovation in higher education? After all, husband Bill allegedly collected $17.6 million from a for-profit provider to serve as its bogus “chancellor”—will the potential of some future kleptomania keep the Clintons from doing to the for-profits what Attila the Hun did to the Roman Empire? Try to finish it off? Or, will Trump save the day?
Make no mistake about it: the ITT closing is a function of indiscriminate attacks by the Obama Administration. There is not even a pretense of having a level playing field, or any attempt made to go after badly performing not-for-profit institutions whose sins are greater or equal to those of Corinthian and ITT. There is not a concern for the tens of thousands of persons who attend classes at ITT who now are left in the lurch. There is less concern about the tens of millions of taxpayers who will no doubt eat the loan obligations incurred, as the executioner (the Obama Administration) eases the pain on borrowers by “forgiving” loans.
Why is this happening? First, of course, the Obama Administration has a visceral dislike for capitalism—they are mostly socialists, not of the honest variety like Bernie Sanders, but of dishonest variety that tolerates capitalists only because of their money that feeds their efforts to maintain power. Second, the not-for-profit higher education industry is a major contributor to the Democratic Party, and bashing the for-profit competition helps sustain and nurture friendships that increases potential political contributions designed to provide economic rents both to academics and politicians. Third, there are some who genuinely feel the for-profits are offering a shoddy product (sometimes with justification), although these individuals are myopic in that they show no desire to crack down on the Chicago State’s and University of District Columbia’s of the world, public schools with four year graduation rates in the single digits (four and six percent, respectively). What about the roughly 19 out of every 20 kids that fail to graduate in the advertised fashion from schools like these?
The ultimate reason we have a problem, of course, is the failed, flawed, even retched federal student financial assistance program. It provided the fuel (loan and grant money) for the for profits historically to be large and growing, but also contributes importantly to general tuition price inflation, overinvestment in higher education, underemployment of recent graduates, a massive student financial debt problem, a decline in the proportion of recent graduates from low income backgrounds, and a few other more venial sins.
Moreover, ITT, like several other for profit institutions, largely filled a need that the traditional universities did not want to fill—providing vocational services in a less than four year degree setting. Not everyone wants or needs a degree in sociology or ethnic studies, but would profit from learning a skill in one or two years. A lot of career colleges in the for-profit sector provide these valuable services—people learn how to weld, drive 18 wheel trucks, become an electrician, or do a host of other valuable and honorable jobs, many of which pay more than what a bachelor degree holder in sociology or ethnic studies will make.
So what is Hillary, following Bernie, asking for—“free” college for everyone who wants to go to public community colleges or four year universities that compete with reputable for-profit schools. It is guilt by association: if you seek a profit, then you are bad. It is somewhat akin to saying “Jews are uncouth,” or “blacks are lazy.” Those are unacceptable stereotypes today, for very good reason. Why is it then cool to say “the for profit higher education industry is terrible and needs to be eliminated,” while “public not-for-profit schools serve admirable and needed goals and need to be subsidized?”
The for-profits have brought needed innovations to higher education. They have offered relatively decent instruction at reasonable prices, both online and in traditional classrooms. They operate at a total cost to society per student dramatically lower than that of traditional four year universities. Their presence has reduced enrollment pressures at taxpayer supported public schools. Let’s stop harassing these schools. Sure, there are sleazes, bad apples, and inappropriate practices at some of them, but there are hundreds of other not-for-profit institutions where this holds as well. This is a sad day for tens of thousands of students at ITT, but more for the whole nation that suffers from the damage done to our nation by an increasingly authoritarian so-called “progressive” oligarchy of government bureaucrats who are sapping our nation of its vitality.
Richard Vedder directs the Center for College Affordability and Productivity and teaches at Ohio University.
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The author is a Forbes contributor. The opinions expressed are those of the writer.