Cato Institute's Richard W. Rahn Defends For-Profit Colleges

While there is no denying critics of PSCUs have been vocal recently, so have supporters. The Department of Education's Gainful Employment has forced the higher education community to have a discussion (or debate or argument, depending on how one views the matter) about the respective merits and shortcomings among the various actors in the higher education space. While traditional universities and community colleges have certainly not been spared the rod of criticism, they've also received lavish praise from those who are concerned with maintaining their preeminence and placement in higher education. PSCUs, on the other hand, have not been so lucky.

That's why it is encouraging to see experts and the informed, like the Cato Institute's Richard Rahn, issue a full-throated defense of for-profit colleges. He centers his argument on not only the successful practices of PSCUs, but the very nature of how their competitive market can often provide the student (read: consumer) the best available outcomes. To wit:

Higher education has not suffered as much from the corrosive influence of the department because there is so much competition among colleges and so many of the leading schools, such as Harvard, Yale, Columbia, Princeton, the University of Chicago and Stanford, etc., are private institutions. In recent years, there has been a rapid rise in for-profit colleges - the University of Phoenix, perhaps, being the best known. Many of these for-profit schools have been more innovative and have delivered more cost-effective education than many of their government-run counterparts; yet the department and many of its big-government allies in the media have been running attacks on the whole industry because of the actions of a few bad operators. These attacks ignore the fact that many government schools run up huge taxpayer - and often student - costs for a very shoddy education.

Some in the department and its allies in the states have been using their power of the purse to try to influence the accrediting agencies not to approve for-profit institutions even though they achieve or exceed the same benchmarks as their public competitors. One attack on the for-profits has been the use of online education by some - while at the same time, many of the accredited state-run universities no longer require students to attend all of their classes as long as they view the professors' lectures online. Unfortunately, accreditation is being used increasingly as a political tool to keep out new competition and, particularly, the new, for-profit competitors that are finding important niches for serving many who do not have ready access to leading public schools.

The nation is best served by having a highly competitive mix of public, private, nonprofit and for-profit educational institutions. As the new Congress considers where to cut the Department of Education budget, it would do well to look at those areas where there has been hostility toward new and for-profit educational institutions. If you wanted to get the best education in finance for the money spent, do you think you would be better off taking the courses provided by those who run a public high school cafeteria or from those who run McDonald's?