Already hit by rising enrollments and funding cuts, community colleges will face even more demand as high-cost for-profits lose students due to new Education Department loan rules. Proposed rules linking loan eligibility to default rates and debt ratios will affect only eight percent of for-profit students in five percent of programs, Education Secretary Arne Duncan predicts. However, 55 percent of for-profits will have to warn students of their graduates’ high debt loads and limit enrollment growth.
For-profit college shakeup
Community colleges don’t have the capacity to serve these displaced students, unless they receive money to expand. And it will have to be federal money, because states are well and truly broke.
Even if community colleges receive new funding to serve displaced students, the public sector has proven to be no better than the private sector – and perhaps worse – at educating poorly prepared students and training them for jobs.
When he was at the Bill & Melinda Gates Foundation, Tom Vander Ark commissioned a study on how to double the number of low-income college graduates. The private sector is critical, he concluded. The report he commissioned says that most private-sector providers “do a better job graduating students, deliver superior income gains, and do so at a societal cost comparable to public institutions. This is an especially important perspective, as many of these graduates represent a high-risk student profile.” Vander Ark is now a partner in Revolution Learning, a multi-stage private equity investor in education.
Community colleges are trying to redesign remedial classes to help more at-risk students succeed. Colleges are revamping job-training programs for low-skilled, low-income adults. But these efforts are in the early stages.
Community colleges will need to imitate the for-profit sector’s flexible scheduling and online options to meet the needs of working adults, parents and other non-traditional students.
In the long run, community colleges should worry that a crackdown on low-performing for-profit colleges could spread to the public sector.
Loan-default rates are lower when taxpayers subsidize most of the costs: Students who borrow less find it easier to pay back their loans. But long-term default rates are high for community college students, reports the Chronicle of Higher Education. And it’s reasonable to ask if taxpayers should keep subsidizing college programs with very low completion rates.
Joanne Jacobs, formerly of the San Jose (Calif.) Mercury News, is a freelancer journalist who blogs at joannejacobs.com. She also writes The Hechinger Report’s blog on community college issues, Community College Spotlight.