Free Market for Education? Economists Generally Don’t Buy It
The New York Times: Economic View, December 2016
The odds are good that privatizing education will be part of the agenda for President-elect Donald J. Trump’s administration. The Republican platform calls for increasing the role of banks in giving out student loans. And Mr. Trump and the platform advocate an expansion of both vouchers, which enable students to attend the private school of their choice with government funds, and charter schools.
In addition, Betsy DeVos, Mr. Trump’s nominee for education secretary, has supported legislation that would establish vouchers in Michigan, as well as the rapid expansion of the state’s charter school sector.
You might think that most economists agree with this overall approach, because economists generally like free markets. For example, over 90 percent of the members of the University of Chicago’s panel of leading economists thought that ride-hailing services like Uber and Lyft made consumers better off by providing competition for the highly regulated taxi industry. [Read more]
A Conveyor Belt of Dropouts and Debt at For-Profit Colleges
The New York Times: Economic View, October 2016
"As college attendance has risen and investment in public institutions has flagged, the United States has relied increasingly on for-profit colleges, with disastrous consequences for many students.
For-profits, once a tiny corner of higher education, have turned into an important force. In 1995, just 500,000 people attended for-profit schools, a small slice of the 15 million enrolled in all colleges. But by 2010, for-profit enrollment jumped to 2.4 million students and its share more than tripled to 11 percent of all college students from 3 percent.
For-profit enrollment surged during the weak job market of the last recession, when college was a particularly appealing alternative. Increases in the generosity of the federal Pell Grant and education tax credits helped drive demand, but public colleges were unable to absorb the flood of students. Because their tuition prices do not cover the cost of education, these public schools... [Read more]