Academic journal article AEI Paper & Studies

More Than Meets the Eye: The Politics of For-Profits in Education

Academic journal article AEI Paper & Studies

More Than Meets the Eye: The Politics of For-Profits in Education

Article excerpt


In the aftermath of President Barack Obama's "education-obsessed" State of the Union address in February 2011, one savvy education policy observer declared that we are on the verge of a new "Washington consensus." (1) In some ways, it certainly feels like it. A Democratic president has pushed for charter schools, teacher incentives, and innovative models of schooling. The secretary of education has bluntly told educators and established interests that they will have to adapt to a "new normal" by cutting costs and rethinking business as usual. Democratic- and Republican-led states have signed on to the Common Core standards.

At the higher education level, the president and prominent foundations have set ambitious goals to raise college attainment and have focused attention on productivity, cost cutting, and accountability for results. This "college completion agenda" has mobilized Republican and Democratic governors, and states across the country are adopting performance-funding measures that reward campuses for courses and degrees completed rather than enrollment.

Beneath this cheery consensus, however, a serious fissure remains over what role, if any, private, for-profit organizations should play in providing education. Recent policy developments have widened these divisions. At both the K-12 and higher education levels, the Obama administration and congressional Democrats have made it clear in word and deed that they are skeptical of for-profit providers. In K-12, the Democratic majority in Congress explicitly barred for-profit providers from individually applying to the administration's high-profile Investing in Innovation (i3) competition. Eligibility for the administration's Charter Schools Program Grants for Replication and Expansion of High-Quality Charter Schools was also limited to nonprofit charter management organizations. (2) These limits on for-profit involvement have prompted vocal protests from providers and sympathetic observers. In higher education, Democrats have successfully phased out private student lending, pushed for new "gainful employment" regulations that will hold for-profit colleges responsible for the debt-to-income ratios of their graduates, and led a highly visible investigation of recruiting and financial aid abuses at for-profit institutions. Republicans in Congress have criticized the Democrats' single-minded focus on for-profits and have threatened the administration's new regulations through legislation.

This report argues that while the current debate about for-profits in education reflects basic philosophical differences between liberals and conservatives, there are important nuances that are critical to understanding politics and policy. A closer look reveals that even policymakers and citizens who are skeptical of for-profits in education are not opposed to for-profit involvement across the board, but are quite supportive of for-profits acting in particular roles. At the K-12 level, for instance, while congressional Democrats successfully thwarted Republican attempts to create voucher programs for private schools, they assented to federal Title I dollars flowing to for-profit providers of SES under No Child Left Behind. Shortly after Congress barred for-profits from applying to i3, Secretary of Education Arne Duncan urged for-profit providers to join in the turnaround efforts of the School Improvement Grants (SIG) program. And in spite of the recent rhetoric about for-profit colleges and universities, there are significant divisions within the Democratic caucus over the issue, with many Democrats from urban districts voicing serious reservations about the effects that regulating for-profit colleges will have on access to higher education for their constituents.

These crosscutting political dynamics--easily missed in the heated partisan rhetoric that often surrounds the for-profit question--mirror public ambivalence about the role of for-profit providers in education. …

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