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

Citation

Forsyth, H. (2018), "Diploma Mills: How for-Profit Colleges Stiffed Students, Taxpayers, and the American Dream", History of Education Review, Vol. 47 No. 1, pp. 107-108. https://doi.org/10.1108/HER-10-2017-0020

In this extraordinary piece of educational history, A.J. Angulo offers a sweeping account of for-profit tertiary education in the USA, from the initial growth of tertiary educational institutions in the late eighteenth century to the very recent past.

The story begins innocuously enough with the well-known growth of business practices, in the history of American capitalism, requiring large numbers of clerks. Entrepreneurial for-profit colleges that from the late eighteenth century onwards taught book-keeping and hand-writing were a clever insertion in the shifting economy. A similar growth – for similar reasons – of for-profit law schools was paralleled, more alarmingly, by the development of a wide range of for-profit medical schools, offering very short diploma courses by which many became medical practitioners. By the 1920s, universities had successfully asserted dominance over these institutions, though the idea of entrepreneurial education never truly receded.

In recounting the shifts in this long period, Angulo captures some of the tensions between professional standards and market monopoly that economic historians describe, though they in general have been less successful than Angulo in considering the market for qualifications as a part of those economic developments.

Financial – and thus, many have claimed, academic – independence has often been the foundation on which universities have claimed their authority. In Angulo’s account, however, university authority was only in part grounded in their not-for-profit status. Indeed, it may in fact have been derived from the mistakes of their for-profit competitors. Angulo demonstrates that, even early on in the history of for-profit tertiary education, the profit-motive was often incompatible with high educational and professional standards. The temptation to skimp on quality in order to boost profits was too high. Their authority was undermined by poor quality education and fraudulent activities that were too frequent to “represent the work of a few bad apples” (p. 143), and yet the diversity of America’s tertiary education sector allowed them to limp on.

After the Second World War, hefty amounts of Federal funding made their way into the tertiary education sector, largely a result of the “G.I. Bill”. Here Angulo deftly portrays the risks of connecting government money with for-profit education. The for-profits revived and then grew rapidly, but often offered poor educational outcomes to the veterans – and then to minorities – who needed a good education the most. Fraudulent enrolment and attendance records, misleading recruitment information and inadequate time teaching and learning were as characteristic of the for-profits in this period as they had been in the mid-nineteenth century – and were again in the late twentieth.

Deregulation in the 1960s and 1970s offered yet another round of openings to for-profit colleges. Angulo, clearly an author not afraid of numbers, demonstrates the extraordinary share of federal aid that for-profit colleges acquired by the 1980s – a share of taxpayer funding that far exceeded their share of student enrolment. By the 1990s, scandals and frauds were once again regularly exposed, as the profit-motive encouraged institutions to find yet more ways to reduce the cost of teaching. Then, when the risk of public recriminations was high, the for-profit sector not only invested in new government lobbying, but was also invested in, as a part of the craze for dot-com share trading.

Angulo’s analysis of the connections between education and finance capital in the late-twentieth and early twenty-first centuries is possibly the most insightful segment of his book, though it has plenty of competition. Higher education, as we know, adopted online learning quickly, for good and bad reasons. This also made it a target for the investment of the large sums of surplus capital accumulated by a very small percentage of the population at the end of the twentieth century. What is more, when the dot-com bubble burst as investors realised that an idea for a web-based thing is not actually a thing, for-profit colleges were not as affected – like the real-estate sector that was the next beneficiary of the wealthy’s spare cash, colleges were actually real. Well, mostly, Angulo reveals significant and systematic fraud in the online era, too.

With profits still propped up by government funding, this amounted to a “redistribution of wealth from taxpayers to [for-profit] investors” (p. 131). The alliance of for-profit colleges with the finance sector thus accelerated the process already known as “academic capitalism”, in turn helping to transform the higher education sector world-wide. Their large marketing expenditure compelled not-for-profit universities to shift a much larger percentage of their own budgets into marketing, in order to maintain their share of enrolments. Angulo does not allow himself to be drawn into an analysis of the consequences of this. Nor does he need to, for the ever-increasing casualisation of university teaching, even in not-for-profit institutions, is evidence alone of the squeeze on teaching costs as universities push larger percentages of their budget into marketing and other managerial activities.

In the conclusion, and throughout, Angulo’s analysis is balanced, offering food for thought to liberal and conservative readers alike – though possibly die-hard neoliberals might wish that the long-run did not show such consistent problems associated with the profit-motive in higher education.

Is there anything wrong with this book? Very little, in this reader’s view, and most of those are only petty in nature. The book is short, but covers a lot of ground. As a historian with similar tendencies, I was forced to reflect on what is missed in this mode – the deep, embodied experience of each period. I did not like the acronyms, especially the awkward use of for-profit colleges and universities as the book’s main subject. The book’s sub-title is accurate, but along with its presentation the book’s marketing team have done the author a little disservice, I suspect. From the cover, “Diploma Mills” looks more like yet-another polemic about academic capitalism than what it is: a nuanced social and economic analysis over the longue durée.