Higher Education Bubble News…

I was away from the computer for a day and one-half.  I get back to my desk and Instapundit has a post up about for profit colleges under attack by the Obama administration.  Later he points us to a hit & run piece on the perverse incentives set up by student loan programs.  The Reason post has this wonderful comment which I find very accurate.

Don’t let anybody tell you otherwise, the schools are run for the benefit of the faculty and select administrators.  I guess we can make an exception for the for-profits like DeVry and Phoenix, they are run for the benefit of the shareholders.  In neither the for-profit or the non-profit does anybody give a rat’s ass about the student.

I am new to higher education and I just went through the year end sales push to end all year end sales pushes.  It is clear to me that the only significant difference between a non-profit and a for-profit is tax status.  Both types of institutions are profit maximizing organizations.  The profit is just shared differently within the two types.

I do think, given the advances in technology and the returns available to the “correct” types of human capital, that some for profit organization is going to make a killing in the next 10 to 20 years.  The existing for-profit higher education organizations were set up to milk the current financing scheme our government has created.  I envision a real for profit outfit that will provide its students higher income in return for a small share of that higher income.

Many people will hate this development.  It can’t some soon enough for me.

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