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Higher Ed Archive

Thursday

26

June 2014

1

COMMENTS

Another Industry In the Obama Administration’s Sites

Written by , Posted in Education, Government Meddling

The private sector is under assault from the Obama administration. We’ve seen it most famously with the war on coal, but as this post from Center for Freedom & Prosperity President Andrew Quinlan demonstrates, we can add for-profit higher education to the list. And once again, it is unelected regulators usurping legislative powers in order to eradicate entire industries:

Now, the Department of Education is targeting private-sector colleges through so-called “Gainful Employment” regulations. The rules not only punish an entire business model for the wrongdoings of a small few schools, but by closing one of the best avenues for working class adults to improve their education and increase employability, they also threaten jobs and the economy.

The proposed rules would cut off federal loan and financial-aid eligibility for programs that fail to meet certain federal standards, such as graduates with high student-loan debt relative to their earnings in the first few years after graduation. This is a deeply flawed approach for reasons both practical and philosophical.

While there is a strong case to be made for ending or severely reducing government financial support for higher education, allowing government to distort the market by picking winners and losers would be even worse than the current system of heavy subsidies. The “Gainful Employment” regulations amount to a thumb on the scale, which unsurprisingly would benefit government-run institutions at the expense of the private sector.

The so-called “Gainful Employment” rule will limit loans and financial aid on the basis of high student loan debt relative to post-graduate earnings, among other things. Problems with the rule are numerous. First and foremost, if it is truly needed to protect students, why are public and private non-profit universities excluded? For-profit schools only serve about 20% of all higher education students, and yet are the exclusive target of the regulation.

Second, the rule fails to account for the market being served. For-profit schools provide opportunities for a lower economic class of students that is often closed out of the prestige-conscious university system. Any rule that punishes schools whose students have relatively lower post-graduate earnings is going to in effect punish schools that take on students who start with lower earnings potential. The rule is thus a perverse attack on economic opportunity at a time when opportunities are already few and far between.

Like much of the Obama agenda, the effort has already run into legal trouble. A prior version of the rule was thrown out by a federal judge for being “arbitrary,” but that hasn’t stopped anti-market ideologues from coming back for another bite at the apple. Quinlan quotes industry expert Donald Graham’s scathing letter in opposition to the rule, which includes an account of the true objectives of the rule’s chief architect:

Why is Mr. Shireman still relevant? Because it is he who decided there should be a gainful employment regulation in the first place.

…With his speech last week at the Center for American Progress, Mr. Shireman lets the cat out of the bag: he simply does not believe that a business should own a college or serve students. Now this is a perfectly respectable point of view. But one could ask: is a person who holds this point of view a fit regulator of a sector consisting of colleges owned by businesses? The judgment on whether businesses were fit to own colleges was made by the Congress of the United States in 1965. Mr. Shireman and now his successor regulators seek to substitute his judgment for that of Congress.

Obama administration officials substituting their lawless judgment for that of duly elected members of Congress seems par for the course these days.

Friday

19

November 2010

0

COMMENTS

Rethinking Tenure

Written by , Posted in Education, Free Markets

I’ll let this article by Naomi Schaefer Riley at the WSJ mostly speak for itself:

…[The Franklin W. Olin] is showing what’s possible when a school sheds tenure, one of the most antiquated and counterproductive employment policies in the American economy. Instituted at a time when people in most professions remained in the same job for life, tenure today is an economic anomaly. The policy protects laziness and incompetence—and rewards often obscure research rather than good teaching.

F.W. Olin was an engineer and industrialist who amassed a fortune from a variety of manufacturing enterprises in the early 20th century. In 1938, he transferred much of his wealth to a foundation that bore his name, and, for the next 50 years or so, the foundation supported higher education on more than 50 campuses across the country.

…Olin students—a significant number of whom turn down more prestigious schools like MIT, Stanford and Berkeley partly because of Olin’s significantly lower tuition—take a variety of liberal arts courses as part of their general curriculum, as well as courses at Babson College, a business school adjacent to their own. During senior year, they work with a local company as consultants for an engineering project.

Some have worked on products like a photovoltaic system to power greenhouses. Others have helped develop advanced robotic devices and medical instruments that will result in less invasive surgeries. Their school is ranked 8th in undergraduate engineering by U.S. News and World Report.

Mr. Miller says that promoting a culture of entrepreneurship has been especially important. Like entrepreneurs, “engineers are people who envision things that have never been and do whatever it takes to make them happen,” he says.

Olin’s trustees put some structures in place to keep that entrepreneurial culture strong. In addition to the lack of tenure, the entire curriculum must be re-evaluated every seven years. There are no formal departments.

…Though Olin doesn’t offer lifetime employment, the school’s vision has been appealing enough to attract an average of 140 applicants for every faculty position. In all but three cases, Olin got its top choice to fill each teaching slot.

Mark Somerville left a tenure-track position in the physics department at Vassar to teach at Olin. “It was not a hard decision to make,” he says. Mr. Somerville says he has found that the lack of tenure has changed his teaching and research interests for the better.

“When one is on the tenure track,” he says, “the clock is ticking. There is a certain day on which you will have to produce a stack of papers.” He’s no longer worried about publishing a certain amount by a particular date. Instead, he’s free to pursue research he finds interesting—something Mr. Somerville says has been “liberating.”

According to Olin’s website, one of the school’s Founding Precepts is avoiding government entanglements:

9. The College to Remain Independent

The College shall remain a privately supported institution committed to supporting itself from private, rather than government or public resources. However, government grants from programs subject to peer review and open to other institutions on a competitive basis may be sought. Grants from so-called earmarked funds will be rejected.

Once again, innovation is found where government is not. Take that, Joe Biden!