According to a recent article published by Forbes, the for-profit college debate is heating up in anticipation of the release of the controversial “gainful employment” rule. The regulation will link eligibility for federal aid to an unproven “debt-to-income” ratio of a school’s former graduates. Many of the rule’s critics wonder why non-profit school will not be held to the same standards. According to Richard Vedder, a member of CCAC, a group dedicated to researching the cost and efficiency of higher education, “a large portion of the educational malpractice going on in American higher education is occurring at the not-for-profit school so richly subsidized by the taxpayers.”

According to the article, “profits can and do play an important role in education. Traditional higher education has historically done a lackluster job of offering vocationally-oriented education programs and meeting the needs of non-traditional students. The for-profit sector recognized that an entire segment of the higher education market was largely untapped, and it stepped up to the plate to meet that demand. That’s largely why for-profit education has been successful and provides support for the argument that education can be governed by a market.”

Regardless of where one stands on the issue, one of the strengths of America’s higher education system is its plethora of programs and providers. “Having a variety of different institution types that serve a diverse student base is a plus for consumer choice and welfare, especially given that students have differences in their abilities, preferences and constraints for postsecondary education. A healthy and competitive market for postsecondary education is essential to meet this demand, as there is no one-size-fits-all prescription for education. Furthermore, there is nothing intrinsic about the tax status of an institution that determines how effective it is at meeting the needs of its students. A healthy and functioning market will likely include a number of organizational types, with each institution having both strengths and weaknesses. The essential ingredient is a level playing field that is accessible by all competitors, with the winning team determined by fair officiating of the game.”

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