Private Colleges and Educational Opportunity for African-Americans

By James A. Bacon

There is a tremendous thirst in Virginia’s African-American population for higher education that is not reflected in minority enrollment at Virginia’s public colleges and universities. Only 13.8% of the students attending public institutions in the fall of 2008 were African-American. But 47.4% of the students enrolled in private, proprietary colleges (often referred to as career colleges) were African-American.

What’s going on? Virginia’s public universities are all models of political correctness. They all champion “diversity” on campus. Many recruit African-American students aggressively. Why don’t they have more?

Here’s what Chmura Economics & Analytics had to say in a 2010 study prepared for the Virginia Career College Association: “Virginia’s community college and public 4-year colleges have capacity limitations, implying that they cannot accept all Virginians who want to pursue a post-secondary education. Without career colleges, many of those minority students may be shut out of the higher education system.”

Normally, one thinks of government stepping in to remedy the failures of the free marketplace. In this case, it appears that the free market is stepping in to remedy the failure of the government-run marketplace. It is interesting that so-called progressives are hostile to career colleges. They say that career colleges experience higher rates of student loan defaults. But that’s just cover for a generalized hostility to privately delivered education.

With student debt surpassing $1 trillion and default rates rising nationally, there is every reason to scrutinize lending practices. Overall, graduates of career colleges do default at higher rates than public and private not-for-profit institutions. “As a group,” charges one critic on the Blue Virginia blog, for-profit higher ed “systematically scams the taxpayer, rips off the government, and harms the lives of veterans, minorities and poor people.”

But such observations are dangerously superficial. One could note also that graduates of Historically Black Colleges and Universities, “as a group,” experience higher rates of default. Does that mean institutions like Virginia Union and Norfolk State are scamming the taxpayer and harming their students?

Career colleges encompass a wide range of institutions that provide degrees with a wide range of marketability. Presumably, a degree in business, IT or health care provides superior career prospects to a certificate in cosmetology. All other things being equal, grads whose degrees give them superior career prospects do a better job of paying off their student loans than those whose degrees are less marketable. Why not focus on specific institutions and degree programs with high default rates rather than denounce career colleges generically?

It is worth noting that career college students pay the full freight of what it costs to educate them, an average of $12,682 per year in the 2008-2009 academic year. The relevant point of comparison for public, four-year institutions is the $18,098 average tuition charged out-of-state students. The cost is lower for in-state students thanks mainly to state support equivalent to $2,487 yearly for community colleges and $5,027 per year for public four-year institutions. Career college grads likely would borrow less – and their default rates would be lower – if their tuition were subsidized to the tune of $20,000.

There’s one more consideration. Career colleges serve a population that comes from lower-income households. Many students growing up never learning the basics of budgeting and financial management. Arguably, students from households with similar socio-demographic characteristics default at comparable rates at public institutions.

There are diploma mills that recruit students who are ill prepared for the rigors of higher education and have no business pursuing college degree, putting them deeply in hoc for worthless educational programs. In 2008 Virginia enacted legislation that makes it illegal to issue fraudulent academic credentials. Otherwise, the existence of diploma mills is an argument for the federal government to be more judicious in its lending practices. Rather than punishing institutions based upon their profit/nonprofit status, the feds should focus on institutions, of whatever stripe, with the worst default rates. Stop lending to colleges that offer little educational value added. Stop lending money for fields of study that offer little payback in the marketplace. Curtail lending to students with a lousy credit score and a demonstrated inability to pay their creditors.

If federal and state officials crack down upon private career colleges for the sin of being privately owned, they could damage an important avenue of upward mobility for many Virginians, African-Americans in particular.

Note: This commentary has been heavily edited from the original post.

Share this article


(comments below)


(comments below)


  1. where to start….

    two biggies –

    1. – If you look at the high school (and elem) NCLB/SOL scores – across the board blacks are down 10 or more points… no matter the geography in most schools. There are 3 – 4 distinct kinds of cultures/groups in the schools and they are categorized in the SOL data – white, black, low income and ESL.

    Our schools teach “white middle class”. The other groups do not do as well. Part of it is culture and part of it is parental support but the results are not in dispute. College just dots the “i”.

    The REALLY FUNNY thing is the folks who advocate non-public schools who think that school vouchers will fix this.

    2. – what they do not teach much of in school is financial literacy and the 2nd biggest loan crisis in the US is govt-subsidized govt loans.
    Young kids barely out of their teens are in debt up to their eyeballs from “colleges” both traditional and non-traditional colleges who seem to be just fine with students that are 20, 30K in debt by their junior/senior years.

    As a result, education loans now exceed consumer credit debt.

  2. the really BAD thing is that the govt provides refundable education credits that are capped at $2500 a year. That’s not chump change and it shows up as a real refund at tax time but when the 1099 form shows 10K of debt… for that year alone… you really do wonder what the hey is going on with the kid and their parents.

    Used to be taking on 10, 20, 30K in debt was a BFD …and it meant you could look forward to years of paying it off – to the detriment of other things you’d want/need…like a car or saving up for a house, etc…

    but now days, people have taken stupid pills – both them and their kids.

    how in the world is someone going to get married, have kids and buy a home when they start out 30-40K in debt?

    this is not an isolated problem. As stated earlier, education debt now exceeds consumer credit card debt.

    we like to “blame” the govt, Richmond, the libtards, the no-mo tax folks but at the end of the day when some poor fool signs up for 30K in debt you gotta wonder what in heavens name they are thinking. You can get a 4year college degree the old fashioned way STILL.. by EARNING It – right?

    Back in the day, people would say they were going to “night school”.

    Hell.. I left work at 4pm every day for 4 years to finish a 2yr college.

    It was not easy but I ended up with an associated degree and NO DEBT!

    this is still a viable path but more and more are getting those govt-subsidized education loans… and piling up debt that will take decades to get out from under.

    go figure!

  3. Darrell Avatar

    Private colleges? You mean the high priced ones like Harvard or one of those high priced fly by night types?

    Earn your IT degree in less than two years! Pay 50 grand to get a piece of paper that is nearly worthless in a real world interview.

    1. That’s the thing I don’t have a handle on: How good are career college degrees? Do you think they are nearly worthless? Is there an objective way to measure?

  4. how good are they? what are the standards for measuring? What I CAN tell you is that they are damned expensive even compared to traditional 4-year colleges.

    The availability of gov-guaranteed loans is doing to education that it did to home ownership. People and the lenders see it as free money for the taking and the education institutions don’t care because the money is guaranteed and the students and the parents don’t care because many of them believe the govt will not come after them if they default.

    This is similar to what will happen with govt vouchers for k-12.

    you have these businesses who primary business is selling career education to those who get the loans.

    Obama, bless his pea picking soul, either does not have a clue why this is a disaster or he’s playing politics to get the young folks votes but this is an unmitigated disaster of fairly immense proportions.

    The 2yr and 4yr institutions are playing in this sandbox also … and it’s at the core of why college costs are going up because there is so much loan money available that the colleges can bid up the price to get the folks who can get the loans AND money from mom/pop.

    Many folks have lost faith in many of our institutions that they once trusted…. and the colleges have joined the ranks of the charlatans. It’s all about the money now and screwing over the young and dumb is fine sport.

    this is exactly what is going to happen if they start doing vouchers for K-12.

    Mark my words.

    1. Larry, I agree , higher ed is a bubble, and we will live to regret our profligate dispensation of student loans.

      But I don’t think the analogy with K-12 vouchers works. Cheap loans suck a lot of people into the higher ed system who shouldn’t be there, people who don’t get much from the experience but do get saddled with debts for decades.

      Vouchers, by contrast, don’t bring anyone new into the system — all kids are enrolled in the system already (except for high school kids who drop out). Further, vouchers aren’t loans. Kids don’t pile up debt.

      The only point of comparison is that vouchers might enable charlatans to open up private schools. That’s a valid concern, and schools probably need to meet some minimum standards of certification, and there needs to be a system for rating the educational value added of the schools and making sure that parents have access to that information. If the information is available, market forces will drive out the bad schools a lot faster than public schools can reform themselves.

  5. We’re close on our views. My concern with vouchers is that kids that don’t do well in traditional schools – the low income, non-whites quite often those families are not financially literate (and are, in fact, some of the ones who get the govt loans for these “career” schools”.

    Vouchers are actually WORSE than loans because they ARE “free money” and the private school marketplace will explode with schools that operate much like the career schools or worse like rent-to-own stores or check-cashing/payday loan type businesses.

    Most private schools today are not more set up to educate the difficult demographics than many public schools. This is going to be frying pan into the fire unless strict standards are in place.

    We say we want to hold public school teachers “accountable” for their performance. WHERE is that concern with Voucher schools?

    If we are not careful – voucher schools will become glorified baby-sitting services with zero academic accountability.

    the funny and ironic thing is that the public schools will likely lose many of their most difficult to teach demographics whose parents will buy slick voucher school advertising hook, line and sinker – and.. in the process.. take pressure off the public schools with NCLB and SOLs because it is these very demographics that tend to pull the overall scores down.

    what standards and sanctions would you put on voucher schools to make sure the playing field between them and public schools is level?

Leave a Reply