Private Colleges “Ain’t That Private”

It’s very interesting to see the private career college (PCC) sector receiving recent popular media attention in both Canada (Crushing Debt…) and the US (Hard Times…) [1]. For those unfamiliar with the work of private career colleges, a little refresher, or you can go back and take a look at one of my previous blog on this topic.

The gist of it is this: private colleges are not publicly funded. They are licensed to operate, but overall are weakly regulated for quality relative to public institutions. Consequently, shenanigans include high-pressure recruitment tactics, inflated claims of the worth of PCC credentials in the labour market, and, for some real fly-by-nighters, closing an institution’s doors overnight and leaving students stranded. However, PCCs also fill a number of important functions that have not been filled by the public sector: they offer short, intensive programs designed to provide rapid labour market entry[2]. For this reason, they are an attractive alternative for adults who don’t feel they have the luxury of time to obtain a 2 year diploma, or 4 year degree.

So that’s the quick-and-dirty. I’d like to focus now on a couple of interesting issues, misconceptions, and opinions coming out of the comments accompanying the recent Globe & Mail article noted above. First, Elizabeth Church, the author of the article, is criticized by a number of readers for claiming that tax payers are on the hook for default student debt; they are quite right that this is untrue. Student loans cannot be discharged through bankruptcy.

However, tax payers are, technically, on the hook in another very interesting way. Despite the fact that career colleges are privately owned and operated, many are quite comfortably tied in with government programs funding the training or re-training of unemployed youth and adults. Vocational training looks great for the government: rapid, practical training programs promise quick turn-around of clients, hence bigger bang for the public buck. So although individual students are indeed on their own for repayable loans, it is quite reasonable, I think, to scrutinize private colleges that receive government funding, indirectly, through grants, bursaries, or training programs whose operations are directly funded by government[3].

A fascinating case study of government involvement in the growth of the private college sector describes how policy and funding in Newfoundland in the 1990s simultaneously squeezed public colleges, and opened the door for private colleges to bid on government-funded training initiatives[4]. Authors McBride and Kealey make the case that the expansion of the private college sector was basically ideologically driven; neo-liberal policies of this era (still with us today, by the way), stemmed from a belief that stripped down government and the facilitation of the free market would improve the efficiency of education, among other traditionally public funded services[5].

The ironic thing here is that, by farming out vocational training contracts to (often upstart) private colleges and training providers, the government didn’t really “get out of the business of education” at all. It just re-directed funding from public to private institutions. So the important thing to draw from the Newfoundland case – and it is not dissimilar from present state involvement in vocational training – is that the private sector ain’t that private. Indeed, government policies and government funding, as illustrated by the case above, are intimately tied to the success or failure of both public and private institutions. So when we evaluate the virtues of private versus public institutions, we need to keep the very central role of government funding in mind.

More to come on the private colleges stories. They’re important. In my next blog, I’ll look at how the growth of the private education sector is symptomatic of much deeper issues plaguing the post-secondary education system as a whole.

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[1] Also see a recent Frontline documentary on private colleges/universities in the US: College Inc. http://www.pbs.org/wgbh/pages/frontline/collegeinc/view/

[2] For a defense of private colleges: Auld, D. (2005). Selling post-secondary education: The role of private vocational and career colleges. Ottawa: CD Howe Institute. Retrieved September 20, 2008 from http://www.cdhowe.org/pdf/commentary_219.pdf

[3] Here’s an example of how government puts out proposal calls for government services: Service Canada

[4] McBride, M. & Kealey, G. (2000). The impact of privatization on Newfoundland college students: The case of the Career Academy. , Toronto: Centre for research on work and Society, York University. Retrieved April, 2009 from http://www.yorku.ca/crws/network/members/McBride-Kealey.pdf

[5] If you’re not familiar with neoliberalism, you are probably familiar with “Thatcherism,” or “Reagonomics.” All three terms describe a fundamental shift in western governments away from a welfare state (where a publicly funded infrastructure supplies health, education, and other public goods) to a state that supports markets as the best way to provide these services. The idea here is that markets, according to economic theory, anyway, promote, through competitition, innovation (better products) and lower prices/costs over time (improved production of those products). The rise of neo-liberalism over the last 30 years has fundamentally altered the way public services are delivered. It’s a big deal.

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