The Cost of Replacing Proprietary Colleges

What are we to make of the new study published by Nexus, “Do Proprietary Institutions of Higher Education Generate Savings for States?”  I had a number of takeaways.

First, its authors are the real deal. Jorge Klor de Alva and Mark Schneider are respected members of the policy and research community.  Second, the reviewers, with people like Pat Callan, David Longanecker, Darcie Harvey, and Chris Bustamente, are a respected and thoughtful group.

Third, as a non-researcher, I thought that the question the study was assessing (what would the cost shift be if proprietary colleges closed) had already been tested in real time in California. The authors predict that the price tag for unmet demand would be in the billions of dollars, but we already know the answer to the “what if this happened” question.  4-5 years ago, tens of thousands of learners were denied access to the community college system in California when the legislature did not fund the existing demand. So the answer is that the learners would be out of luck if these colleges were closed.

Finally, the study suggests that this whole discussion of proprietary institutions as a single class of institutions that is to be suspected, is masking a larger and important reality — namely, that the situation we face and the issues that lie behind it are far more nuanced and complex than some people want to make them.

Let me state my bias that as a former community college and state university president, I strongly support the tradition of taxpayer-funded public higher education, with tiers of subsidy at the three levels: community colleges, state colleges and universities, and land grant universities. The diversity of access and price that result are as American as apple pie.

Beyond that, however, I see plenty of room for private non-profit and proprietary institutions to fill out the opportunity picture with higher prices, in some cases, and no state institutional subsidy. It strikes me that the very diversity suggested by this institutional variety is symbolic of what makes our country strong and durable. This being said, I agree with study author David Longanecker’s cautionary comment, “Don’t wish for these to go away.”

Now is the time for the thoughtful development of appropriate policies to assess the effectiveness of  proprietary colleges in even-handed ways.

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