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Hmmmmm, this is a difficult one to think on. I think there is an implicit contract made, where you put in enough time, effort, and money; and in return you get

Hmmmmm, this is a difficult one to think on. I think there is an implicit contract made, where you put in enough time, effort, and money; and in return you get a corresponding credential, or other record of your work (i.e. a transcript). Each quarter/semester may be thought of as a contract, but that doesn't tell the whole story, because it takes a series of these contracts to get a credential. That's where the implicit part comes in. As much as people don't like added government regulation, I think the best way to address this may be to have a body similar to the FDIC (and the NCUSIF, for credit unions). Member educational institutions would provide the actual cost charged to each student, including costs paid in cash and costs paid by loans, and including actual room & board costs (if the institution charges for that). Each institution would also survey the student body to determine average amount spent on supplies, as well as the average cost for room & board for those who live outside. Through the accrediting agencies, the insuring body would be able to work out about how long students would spent in-school for a particular degree. The idea would be, should an institution 'fail' (for whatever definition you want), the insuring body would step in and provide some immediate compensation to students, to keep them in housing. Then, assess if they can transfer to another institution. If not, then they are refunded all costs for the time spent at the failed institution. The body's actuaries can work out the general risk of institutional failures, and figure out how much money each participating institution would have to contribute to fund and maintain the insurance (which would likely be invested in things like Treasury bonds).

MertsA 8y ago
>If not, then they are refunded all costs for the time spent at the failed institution. I'm currently just one semester away from earning my bachelor's degree. To do so, I resigned from a reasonably decent sysadmin job. If I was put into the position of one of the students going to the failed college in the article I would be out 3 years of my life. For me the difference in salary alone, even if I was compensated for every dime spent on education from tuition, rent, utilities, books, gas, everything would still be over $100,000. Just covering costs is a drop in the bucket compared to the value of literally years of someone's life. If my college closed their doors the day after the start of next semester I would be apoplectic. For profit colleges should absolutely be required to have enough funds in reserve to make sure that they could continue operation long enough to let all currently enrolled students finish at a full time enrollment schedule. Students are left with student loans that are basically impossible to discharge in bankruptcy. Student loan forgiveness programs like the one for public service almost never actually pay out. Even if you die and your assets aren't enough to cover the loan, debt collectors will often go after immediate family members even though they are under no obligation to pay the debt in an effort to trick them into assuming responsibility for it. The whole point of making student loans unable to be discharged under basically any circumstances is to let creditors loan money for education without collateral. Why shouldn't we require similar protections to keep for-profit colleges from defaulting on their obligations? I don't think what you're suggesting goes far enough to protect students and even if it did, it would need some teeth to it to meaningfully enforce it. We already have regulations to discharge student loans when an institution goes under but because of parasites like Betsy DeVos in the majority of cases those loans are still being collected on today. I think the main thing here is that if an institution has "failed" then the government has already failed. Regulations should be structured in such a way that if an institution wants to close then it's cheaper to stop accepting new students and let the current ones finish rather than default and immediately close.
- deleted 8y ago
  [deleted]
- ghaff 8y ago
  Is it realistically possible to structure things so that an organization cannot fail within some time window? I'm skeptical. If there's some wind-down (or refund) money held in escrow, it's reasonable to expect that maybe a semester window might be realistically possible. A couple years probably isn't. It would be a lousy situation especially to the degree credits weren't easily or fully transferable but it's not clear to me how much power the government has to do something about it.
  - keithpeter 8y ago
    UK: further education colleges are state funded, I can't think of any purely private ones off the top of my head. The funding organisations would act to 'protect provision' if a college did fail - the funders can require mergers &c.
    - rjsw 8y ago
      The University of Buckingham is privately funded.
      - keithpeter 8y ago
        Interesting. https://www.buckingham.ac.uk/foundation-dept/foundation-pathway https://www.buckingham.ac.uk/foundation-dept/foundation-path... The fees they are charging tend to suggest that the University is not claiming skills funding agency money for this foundation course. In the UK further education colleges work at a level below universities and what we call 'level 3' qualifications (e.g. A levels, BTEC National Diploma &c) are needed to enter most university courses. Universities can offer their own foundation courses - a foundation year is common in the fine art field.
  - MertsA 8y ago
    I'm not saying make it literally impossible for an institution to fail, I'm just saying we should mitigate the risk by making sure there's some funds in reserve to act as collateral and mitigate cash flow problems while they're winding down. In addition pass some of that liability off onto the directors. Just making it clear that they have a fiduciary duty to students would go a long way. Right now if a for-profit college is going under there's no incentive at all to try and minimize the impact to students. If you know that a degree program is getting the axe in 6 months it's pretty scummy to still be accepting freshmen into it. From a business standpoint not doing that means passing up hundreds of thousands of dollars in tuition while still incurring the same costs in terms of facilities and faculty.
mirimir 8y ago
TFA does note: > Students who are unable or unwilling to transfer their credits and continue their studies elsewhere can apply to the Education Department to have their federal loans forgiven through the department’s closed school discharge program. A recent rule change requires the department to automatically forgive the loans of some eligible borrowers. But there, it's the US government that's paying. And I doubt that the late college chain has anything recoverable.
- CaliforniaKarl 8y ago
  >And I doubt that the late college chain has anything recoverable. Yeah, that’s why I latched on to the FDIC example: Institutions pay in at the start, so the money is there to do the bailout.
- baltcode 8y ago
  Do you lose your transcripts if you have your loans forgiven? What if a few years later a student enrolls in a different university and applies to have these old courses counted?
tonyedgecombe 8y ago
I wonder if splitting the responsibility for education and awarding credentials would be a better idea. It would open up some real competition in education and weaken the stranglehold the elite establishments have.
- mkirklions 8y ago
  I thought my college education was fantastic, I know chem engineering and became very good at math. However, due to my college being lazy and never getting ABET accredited in my Chem engineering degree, I cant become a P.E. despite passing the PE and FE tests. Stupid college I suppose. I make tons of money as a degreed engineer though...
- sct202 8y ago
  Medicine and Law have separate credentialing systems, but the requirements to become eligible to take the tests usually require you to go to an accredited organization and the med school orgs are notoriously fickle about expansion.
jimbokun 8y ago
"As much as people don't like added government regulation" Most people like regulation, but corporations and the wealthy don't, and they are the only ones with a voice in US government.
- mrfredward 8y ago
  I like that I can trust the food in the supermarket. I like that my water is drinkable. I don't like the straight, clear highway with no exits that drops from 70 mph to 55mph for the sole purpose of generating revenue for the police department. I don't like that books written by authors who died years ago, and are no longer in print, may be lost forever because no one one can legally make a new copy until a very long time in the future. There are good regulations and bad ones. The generalized "regulation is good/bad" debate is a waste of time. And FYI, there are plenty of wealthy people abusing regulations to get richer, see the patent system for more info.
- thomascgalvin 8y ago
  Don't forget all the people the corporations and the wealthy have convinced to vote against their own interests, in the name of "freedom".
- icebraining 8y ago
  If the wealthy didn't like regulations, you wouldn't have so much of it.

MertsA 8y ago

>If not, then they are refunded all costs for the time spent at the failed institution. I'm currently just one semester away from earning my bachelor's degree. To do so, I resigned from a reasonably decent sysadmin job. If I was put into the position of one of the students going to the failed college in the article I would be out 3 years of my life. For me the difference in salary alone, even if I was compensated for every dime spent on education from tuition, rent, utilities, books, gas, everything would still be over $100,000. Just covering costs is a drop in the bucket compared to the value of literally years of someone's life. If my college closed their doors the day after the start of next semester I would be apoplectic. For profit colleges should absolutely be required to have enough funds in reserve to make sure that they could continue operation long enough to let all currently enrolled students finish at a full time enrollment schedule. Students are left with student loans that are basically impossible to discharge in bankruptcy. Student loan forgiveness programs like the one for public service almost never actually pay out. Even if you die and your assets aren't enough to cover the loan, debt collectors will often go after immediate family members even though they are under no obligation to pay the debt in an effort to trick them into assuming responsibility for it. The whole point of making student loans unable to be discharged under basically any circumstances is to let creditors loan money for education without collateral. Why shouldn't we require similar protections to keep for-profit colleges from defaulting on their obligations? I don't think what you're suggesting goes far enough to protect students and even if it did, it would need some teeth to it to meaningfully enforce it. We already have regulations to discharge student loans when an institution goes under but because of parasites like Betsy DeVos in the majority of cases those loans are still being collected on today. I think the main thing here is that if an institution has "failed" then the government has already failed. Regulations should be structured in such a way that if an institution wants to close then it's cheaper to stop accepting new students and let the current ones finish rather than default and immediately close.

deleted 8y ago
[deleted]
ghaff 8y ago
Is it realistically possible to structure things so that an organization cannot fail within some time window? I'm skeptical. If there's some wind-down (or refund) money held in escrow, it's reasonable to expect that maybe a semester window might be realistically possible. A couple years probably isn't. It would be a lousy situation especially to the degree credits weren't easily or fully transferable but it's not clear to me how much power the government has to do something about it.
- keithpeter 8y ago
  UK: further education colleges are state funded, I can't think of any purely private ones off the top of my head. The funding organisations would act to 'protect provision' if a college did fail - the funders can require mergers &c.
  - rjsw 8y ago
    The University of Buckingham is privately funded.
    - keithpeter 8y ago
      Interesting. https://www.buckingham.ac.uk/foundation-dept/foundation-pathway https://www.buckingham.ac.uk/foundation-dept/foundation-path... The fees they are charging tend to suggest that the University is not claiming skills funding agency money for this foundation course. In the UK further education colleges work at a level below universities and what we call 'level 3' qualifications (e.g. A levels, BTEC National Diploma &c) are needed to enter most university courses. Universities can offer their own foundation courses - a foundation year is common in the fine art field.
- MertsA 8y ago
  I'm not saying make it literally impossible for an institution to fail, I'm just saying we should mitigate the risk by making sure there's some funds in reserve to act as collateral and mitigate cash flow problems while they're winding down. In addition pass some of that liability off onto the directors. Just making it clear that they have a fiduciary duty to students would go a long way. Right now if a for-profit college is going under there's no incentive at all to try and minimize the impact to students. If you know that a degree program is getting the axe in 6 months it's pretty scummy to still be accepting freshmen into it. From a business standpoint not doing that means passing up hundreds of thousands of dollars in tuition while still incurring the same costs in terms of facilities and faculty.

mirimir 8y ago

TFA does note: > Students who are unable or unwilling to transfer their credits and continue their studies elsewhere can apply to the Education Department to have their federal loans forgiven through the department’s closed school discharge program. A recent rule change requires the department to automatically forgive the loans of some eligible borrowers. But there, it's the US government that's paying. And I doubt that the late college chain has anything recoverable.

CaliforniaKarl 8y ago
>And I doubt that the late college chain has anything recoverable. Yeah, that’s why I latched on to the FDIC example: Institutions pay in at the start, so the money is there to do the bailout.
baltcode 8y ago
Do you lose your transcripts if you have your loans forgiven? What if a few years later a student enrolls in a different university and applies to have these old courses counted?

tonyedgecombe 8y ago

I wonder if splitting the responsibility for education and awarding credentials would be a better idea. It would open up some real competition in education and weaken the stranglehold the elite establishments have.

mkirklions 8y ago
I thought my college education was fantastic, I know chem engineering and became very good at math. However, due to my college being lazy and never getting ABET accredited in my Chem engineering degree, I cant become a P.E. despite passing the PE and FE tests. Stupid college I suppose. I make tons of money as a degreed engineer though...
sct202 8y ago
Medicine and Law have separate credentialing systems, but the requirements to become eligible to take the tests usually require you to go to an accredited organization and the med school orgs are notoriously fickle about expansion.

jimbokun 8y ago

"As much as people don't like added government regulation" Most people like regulation, but corporations and the wealthy don't, and they are the only ones with a voice in US government.

mrfredward 8y ago
I like that I can trust the food in the supermarket. I like that my water is drinkable. I don't like the straight, clear highway with no exits that drops from 70 mph to 55mph for the sole purpose of generating revenue for the police department. I don't like that books written by authors who died years ago, and are no longer in print, may be lost forever because no one one can legally make a new copy until a very long time in the future. There are good regulations and bad ones. The generalized "regulation is good/bad" debate is a waste of time. And FYI, there are plenty of wealthy people abusing regulations to get richer, see the patent system for more info.
thomascgalvin 8y ago
Don't forget all the people the corporations and the wealthy have convinced to vote against their own interests, in the name of "freedom".
icebraining 8y ago
If the wealthy didn't like regulations, you wouldn't have so much of it.