Diploma Mills: How For-Profit Colleges Stiffed Students, Taxpayers, and the American Dream

Diploma Mills traces the historical origins of today’s for-profit colleges, illustrating the roots of the continued tensions within the sector. The book shows that the crackdown on the for-profit sector in recent years is not the first of its kind. Rather, the sector has a long-standing history plagued from the outset with deep tensions between seeking profit and educating students. With a historical overview of the sector, it makes the core argument that these two tensions cannot be reconciled. As an historian of education, Angulo brings a new set of insights to understanding the sector. His historical analysis of for-profit colleges provides a perspective that helps shed light on current issues within them, and his analysis traces how this sector formed from a genuine need but was plagued at the outset with ethical contradictions.

Diploma Mills begins the historical review in the Colonial era, where classical education dominated and practical education was eschewed. This context gave rise to the emergence of for-profit business and commercial colleges, which among many things, served to educate merchants in reading and writing. The sector at the time filled a need to provide practical education for business and public leaders. However, in meeting this need, the sector also demonstrated many questionable practices that have continued to emerge throughout their history, including an overemphasis on profit seeking and misleading marketing campaigns that lead to inflated expectations.

Each chapter shows how for-profit colleges over time rode the tides of other historical developments, but core tensions remained unchanged. In the early parts of the 20th century, multiple forces challenged the sector but did little to halt its development. Professionalization increased in addition to the expansion of other educational options, including technical colleges and graduate programs approved by professional organizations. The Smith-Hughes Act, which established vocational education in the K-12 system, created another source of competition for the sector. In the context of the progressive era, for-profit colleges began to receive more scrutiny, as major studies revealed problems with the sector such as the diverting of funds from student instruction to recruitment, and providing students with largely false promises.

The book demonstrates how the sector was bolstered at multiple points with the influx of new revenue sources. The GI Bill fundamentally changed the dynamic, opening up a new phase in the history of the sector. With this large influx of funding for education, the for-profit sector ballooned, along with many examples of blatantly fraudulent activity. Congressional investigations revealed abuses within the sector; notably, some of these abuses arose from the lack of regulation within states over higher education institutions. The Higher Education Act of 1965, while not aimed at for-profits, was another key inflection point providing access to federal financial aid programs, fueling a massive growth in the use of student loans to fund attendance at for-profit schools. As in previous points in the sector’s history, little oversight existed, and eventually reports in the 1990s uncovered large scale problems, which again involved false advertising to recruit students with unrealistic promises by commissioned recruiters. At the same time, the sector organized efforts to lobby for their schools and make the case to keep the sector away from scrutiny. The next big shift occurred with the influx of investor money in major for-profit operators that went public, having been fueled by the steady income stream guaranteed by student loans. Again, the same dynamics arose in the sector of a large investment in advertising eclipsing lesser investment in learning. Additionally, certain universities advertised student outcomes that were exaggerated, and simply too good to be true. With this latest development, shareholders now also demanded to see profits returned from the schools, further increasing the pressure to bring in students and generate income. Over and over, Angulo highlights the core contradiction of the sector that has played out: the tension between the profit motive and serving student needs.

Diploma Mills highlights the political arguments on both sides of the spectrum in favor of for-profits. The for-profit sector is politically contested, and Angulo seeks to explore these arguments from both sides of the political spectrum. Class-based differences in enrollment make the for-profit sector amenable to proponents on the political left, with the argument that the for-profit sector provides access to programs that would otherwise not be addressed in the existing educational system. Those on the right side of the political spectrum often value the sector for the idea that it brings innovation, responsiveness, and competition to the education marketplace. Angulo argues that the pursuit of profit overshadows all other motives, and makes a reasonable academic mission impossible. The bottom line of the book is that throughout the history of higher education in the U.S., for-profits have over-promised and under-delivered, largely due to the underlying profit motive that leads schools not to invest their resources in quality instruction, but instead in ushering more students through the door to pay tuition.

Angulo sets out to provide an historical account of the for-profit sector to fill in a missing piece in the understanding of the field, noting that others have examined the field using other perspectives. The book succeeds in filling this gap in historical perspective. However, it leaves questions about how to interpret findings, the highly troubling set of tensions revealed in this historical analysis, from other perspectives. For example, other accounts such as Rosenbaum, Deil-Amen and Person’s (2006) examination of private colleges, including some for-profits, highlighted effective practices in student engagement and retention at these schools. While not a comprehensive analysis of the sector or evidence to negate the historical analysis, this analysis does leave open the possibility that some schools in the sector may have offered examples of successful institutional practice. It is unclear how these findings can be reconciled with the analysis in this book.

Nonetheless, the long view of the sector and the ongoing tensions between profit and quality raise serious concerns. By taking an historical view of the for-profit sector, it becomes clearer that the recent problems with the sector are not new, and have reoccurred in different forms over many years. This raises the question of whether it is possible to solve these problems or whether they are simply inherent to the sector. Angulo concludes the latter and advocates eliminating the use of public funding in the for-profit sector. Policymakers would be well advised to consider the history of the sector and its implications for policy moving ahead. Diploma Mills provides an excellent primer on this history that is engaging to read and highly informative.

Reference

Rosenbaum, J. E., Deil-Amen, R., & Person, A. E. (2006). After admission: From college access to college success. New York, NY: Russell Sage Foundation Press.