For-Sale Romney Is A False Prophet For For-Profit Universities

The New York Times panned Mitt Romney—on its weekend front page no less—for claiming that the way to cut soaring college tuition is through competition by for-profit colleges. "Mitt is shamelessly shilling for his donors," was the story's not-so-subtle message. And about that, the Times might well be right. After all, Bill Heavener, the chief executive of Florida's Full Sail University that Romney singled out twice during campaign stops as his model, has contributed $2,500 to Romney's campaign (as has his wife), the maximum allowed. Heavener also gave $45,000 to Restore Our Future, a Romney "super Pac" as did C. Kevin Laundry, the chairman of the private equity fund that owns Full Sail.

None of this would have mattered if Full Sail actually had a record of providing an affordable, quality education. But NYT found that the college charges more than $80,000 for a 21-month program in "video game art" that graduates just 14 percent of its 272 students on time and only 38 percent at all. And its students carried a median debt load of nearly $59,000 in federal and private loans in 2008.

This is pretty damning stuff— and Full Sail might well be the dog that NYT makes it out to be. But remember what they said about the University of Phoenix? Its recruitment practices are over aggressive. It's over priced. Its class hours are skimpy. Its graduation rates are low. Its faculty and instruction are sub par and yada, yada, yada. All of this was absolutely true, Katherine Mangu-Ward's 10-page investigation of the university two years ago found—but also utterly irrelevant. That's because, she explained:

The university aims to meet underserved demand for post-secondary education, tailor-made to fit the individual circumstances of harried adults. Like other for-profit schools such as DeVry and ITT, Phoenix offers the educational equivalent of a subprime mortgage: not the best product the industry has to offer, but a potentially valuable option for people who might not otherwise get into a desired market.

As with subprimes, a nonnegligible portion of consumers won't be able to stay afloat, exiting school moderately poorer and perhaps not much wiser. But the students who do graduate—like the millions who use subprime deals to gain a firmer foothold in the housing market—have a much different story to tell. Their tales are not about sunshine on the quad, Saturday night football games, or ivy-covered walls. They're about a kind of practical, bare-bones education that you never see in coming-of-age films but that is usually superior to no education at all.

In other words, context matters, and, call me cynical, but I just don't trust the NYT to offer it. For-profit colleges offend liberals so much that they'd find something wrong with Aristotle's Lyceum if it happened to make money.

That said, I think Romney is wrong even about the substance of his claim. I don't think for-profit colleges can cut tuition rates any more than private schools have helped rein in the cost of the public K-12 system. They might make a difference on the margins, but they are no panacea. Why? Because when government pours money into an industry, it bids up the price of the factors of production for everyone. Doling taxpayer dollars to public universities means that they can: pay more to hire professors (which is not an entirely bad thing as my husband works for Michigan State University); spend more on erecting Club Med campuses with hot tubs in dorms etc. etc. And private universities that wish to compete have to match the salaries and facilities offered by their public school peers or go out of business.

Hence, the first step in cutting college tuition inflation is to get government spending out of higher education—not getting for-profit colleges in. But don't expect Romney to say that — unless, maybe, if a donor pays him to do so.

Perhaps we should start a collection?