These problems appear to be intrinsic features of for-profit education. Markets only work well when there is a shared understanding of product quality among buyers and sellers. But in education, quality is amorphous and multidimensional. Students agree to pay up front, and only find out whether they got a good deal many years later. As a result, students are highly vulnerable to the opportunism of for-profit colleges, which are inevitably tempted to increase profits by cutting corners.
By contrast, community college job training programs substantially increase participants’ earnings, and because tuition costs are relatively low, they typically provide a good return on public investment.
But underfunding and overcrowding mean that the most valuable community college programs are often unavailable to many students. One recent study found that applicants who randomly won a slot in a lottery to attend a nursing program had 44 percent higher earnings four years later. Yet because of budgetary limitations, only one in eight applicants could attend. Separate research showed that when community college funding has increased, the money has generally been spent directly on instruction and academic support for students, boosting graduation rates.
As public institutions, community colleges are not always sensitive to market signals. For-profit colleges offer a disproportionate share of short-term training programs for medical and pharmacy technicians and other fields where jobs are relatively plentiful. Companies like Google, IBM, LinkedIn, and Coursera have begun offering online courses in computer programming and data science. For programs like these, the profit motive is a strength, rather than a weakness.
Nonetheless, community colleges should be the main place to train America’s workers, because they are mission-oriented and well trusted. They can do so in close partnership with local employers and, yes, private providers.
Broward College in Florida offers one promising model. It has built industry certifications into its curriculum, along with internships and other work-based learning opportunities provided by local employers. This program was made possible by the U.S. Department of Labor’s Trade Adjustment Assistance Community College and Career Training program, which funded the development of thousands of similar efforts as part of the 2009 economic stimulus package.
A scaled-up version of the career training program, which spent $1.9 billion to fund work-based learning credentials for more than 350,000 students, could stimulate local economies that have been hit hardest by the pandemic.
