2010 - %3, December

For-Profit College Loan Fail

| Wed Dec. 22, 2010 11:29 AM EST

Here's a shocking new statistic that puts the ongoing regulatory battle between for-profit colleges—the University of Phoenix, Kaplan University, and so on—and the Department of Education into context.

According to new data from the DoE released on Wednesday, 46.3 percent of all loan money lent to students at two- and four-year for-profit colleges in 2008 would eventually go into default. By comparison, the overall default rate in 2008—lumping together loan money given out to students at community colleges, for-profits, and traditional undergraduate and graduate schools—was only 15.8 percent. You know something's wrong when the for-profit default rate, dollar per dollar, is nearly three times higher than the rest of academia.

And 2008 is no anomaly, either. Looking at the graph below, you can see that, since 2004, the for-profit college default rate has always exceeded all other colleges by a healthy margin.


From the Department of Education.

So what does this mean? It certainly gives the DoE more ammunition to defend its proposed "gainful employment" regulations, a crackdown the for-profit industry has fought tooth and nail. The DoE's regulations would mandate that for-profit college graduates earn enough to repay their federal loans, or else the schools could lose access to federal loan funding. That would be a serious blow to much of the industry, which relies on such funds to survive. Most colleges receive 75 percent of more of their revenue in federal loan funding; at others, like the University of Phoenix's parent company, Apollo Group, federal dollars comprise upwards of 90 percent of the revenue. (The legal limit is exactly 90 percent.)

But if more than four in 10 students at for-profit colleges default on their federal loans each year, how well is that government money being spent? That's the question the Education Department has been asking for quite some time. It's unclear when the department will fully implement its gainful employment rules, but with statistics like these, it's hard to see why the department shouldn't crack down on for-profit colleges.

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We're Still at War: Photo of the Day for December 22, 2010

Wed Dec. 22, 2010 6:30 AM EST

U.S. Army Pfc. Carlos Ortiz stands guard while engineers from the Zabul Provincial Reconstruction Team (PRT) show contractors a proposed bridge erosion control site near Qalat, Afghanistan, Dec. 13, 2010. Zabul PRT is comprised of Air Force, Army, U.S. Department of State, U.S. Agency for International Development and U.S. Department of Agriculture personnel who worked with the government of Afghanistan to improve governance, stability and development throughout the province. (DoD photo by 1st Lt. Brian Wagner, U.S. Air Force/Released)

Corn on "Hardball": Mitch McConnell's Monumental Obstructionism

Wed Dec. 22, 2010 3:14 AM EST

David Corn and Jonathan Allen joined Chris Matthews on MSNBC's Hardball to discuss the complete obstructionism and partisanship of Mitch McConnell and the GOP.

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter.

Quote of the Day: Skinning the Duck

| Wed Dec. 22, 2010 1:56 AM EST

From Sen. Lindsey Graham (R–SC), on the Democratic victories of the lame duck session:

When it's all going to be said and done, Harry Reid has eaten our lunch.

Munch, munch.

Healthcare Reform and the Public

| Tue Dec. 21, 2010 9:13 PM EST

I guess I shouldn't care too much about stuff like this, but it bugs me when I get egregiously misquoted. Here is Tevi Troy in the Wall Street Journal today writing about the political disaster of healthcare reform:

Obama told wavering Democrats [that HCR] would suddenly become acceptable or even popular with the American people once it was passed. As Mother Jones's Kevin Drum put it in March, "once people get a taste of universal healthcare, they like what they see and they don't stop until the job is finished."....Alas for Obama and Drum [], it turned out that the more people tasted it, the less they liked it.

And here's what I actually wrote, in response to a question from Charles Pierce about why I thought passage of PPACA would lead to bigger and better reform down the road:

What's the argument for longer term progress? This isn't quite as black and white, but the historical evidence is pretty clear. Look at virtually every other advanced economy in the world. They started off with small programs and grew them over time. Germany spent over a century getting to universal healthcare. France started after World War II and didn't finish until 1999. In Canada, national healthcare started in Saskatchewan in 1946, spread to the other provinces over the next couple of decades, and became Medicare in 1984. The trend here is pretty obvious: once people get a taste of universal healthcare, they like what they see and they don't stop until the job is finished.

Obviously I was talking about long-term public acceptance of national healthcare after it starts getting implemented, not public reaction during a midterm election six months after passage. I might, of course, turn out to be wrong about even that, but I said what I said, not what Troy pretended I said.

But hey — there's more to this than just personal pique. There are also facts, which Troy cherry picks with abandon. I don't know whether healthcare reform was really responsible for one-third of the 63-seat loss that Democrats suffered in November, as Troy says, but I do know in general terms how public opinion toward healthcare reform has trended during the year. Kaiser has been sampling it monthly and you can see the results on the right. In April, right after PPACA passed, it was viewed favorably by a 45%-40% margin. In November, that had changed to 42%-40%. And, as we all know, attitudes toward most of the specific provisions of PPACA remain even more strongly favorable. That's not really evidence of a massive turnaround in public opinon.

Other surveys show other things, but in general healthcare reform polls favorably among Democrats and slightly favorably among independents; more favorably among the working age population than the elderly (probably due to the tsunami of Medicare demagoguing during the campaign); and modest majorities favor giving the bill a chance rather than repealing it. And, as always, the individual mandate polls badly.

In other words, the jury is still out on the political impact of healthcare reform. I'd say Democrats made a mistake by delaying implementation of most of it until 2014, and I'd also say (obviously) that Republicans are going to take a stab at repealing/defunding parts of it next year. There's no telling how that's going to play out. In the long term, though, if PPACA survives I'll stick to my prediction: once it's real and people start benefiting from it, it will become popular and the public will want it expanded. I'll check back in 2020 to see how my crystal ball panned out.

Good Teachers Wanted, Apply Within

| Tue Dec. 21, 2010 6:07 PM EST

Stanford’s Eric Hanushek reports on research he's done into teacher effectiveness:

A teacher one standard deviation above the mean effectiveness annually generates marginal gains of over $400,000 in present value of student future earnings with a class size of 20 and proportionately higher with larger class sizes.

These aren't just superstars that Hanushek is talking about, either. About 16% of teachers are one standard deviation above the mean, so these are good teachers but not necessarily sensational ones. Karl Smith is impressed:

Social value isn’t a feel good concept. Hanushek limits himself to future earnings of the students. The other big drivers are always crime reduction and public assistance reduction. So we are saying better teachers lead to higher wages, lower crime and less welfare. This is a far cry from trying to put numbers on soft factors like civic engagement.

And Reihan Salam wants more:

I do wish that someone would connect the dots and make the obvious yet important point that Rick Hess has been making for ages: shrinking class sizes over the last forty years has diluted the teacher talent pool. Had we stayed at the teacher-student ratios of the 1970s, we’d have 2.2 million public school teachers rather than 3.2 million. Know what else happened over the last 40 years? Labor market discrimination against women and African Americans declined, giving talented female and African American workers who had once gravitated to the teaching profession other options. Allowing effective teachers to take on larger classes in exchange for more pay could have a powerful positive effect. With the same compensation bill, we could pay far higher salaries.

It makes sense that we'd be paying teachers more if there were fewer of them, though I'm not sure that's how things would actually play out in the real world. However, given the lack of evidence that lower class sizes improve educational outcomes, it seems worth a try.

Still, this leaves us with the biggest question unanswered. I think lots of people are sympathetic to the idea that good teachers make a big difference, but how do we decide who the good teachers are? Or who the best teaching recruits are? Value-added results from standardized testing regimes seem to be about the best we have at the moment, and those are pretty questionable. But for a wide variety of reasons both good and bad, there's no way that we'll ever end up dedicating large sums of money to a massive social experiment in teacher selection and retention unless we're pretty sure we have this question licked.

Obviously there are plenty of other problems bedeviling education too: concentrated poverty, disaffected parents, pedagogical conflicts, etc. etc. But teacher quality comes up repeatedly, and the problem of how to actually judge teacher quality in the real world always comes up right along with it. I'm not sure what the answer is. Lots of experimentation, I suppose.

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International Relations 101

| Tue Dec. 21, 2010 4:52 PM EST

From the Atlantic Council of the United States, which is kind of a big deal in foreign policy circles, there's this:

How unfortunate. Kabuki is Japanese, not Korean. Author Donald M. Snow is a prolific writer on international affairs from the perspective of "a (John) Kennedy liberal," so hopefully his generalization about Asian people was a one-off oversight. But this:

...there is a hint of a familiar kabuki in the air. Let's hope the participants don't forget their roles and their lines, paticularly since the failure to do so could have particularly devastating consequences in a nuclear-armed Korean peninsula.

is perhaps not the best choice of words or thoughts for a thoroughgoing (and non-stereotyping) analysis of nuclear geopolitics.

The Really Big Country Problem

| Tue Dec. 21, 2010 3:34 PM EST

Brad Plumer has a useful piece today about  Sen. Tom Coburn's "Wastebook 2010," which allegedly exposes massive amounts of waste, fraud and abuse in the federal budget. You should read it, but I want to add a separate comment.

Nearly all WFA discussions fall victim to the Really Big Country problem. That is, the United States is a really big country, which means that no matter what kind of weird pathology you go looking for, you'll always find a fair amount of it. Or, more accurately, you'll find what seems to be a fair amount but really isn't. It's why so many parents worry about their kids being snatched off the street by strangers: only about a hundred abductions a year fall into this category, which seems like a lot. But in a country of 300 million, that's actually about as big as the number of people killed each year by lightning strikes. It's incredibly rare. [See update below.]

I'd venture to guess that barely any organization in human history has managed to reduce WFA below about 2%. If you earn $50,000 a year, that means waste of $1,000. Even careful households probably piss away that much each year. If you run a million-dollar small business, it means waste of $20,000 a year. Again: even a very miserly small business probably loses that much. It's just impossible to keep track of every expenditure, monitor every employee every minute of the day, or make sure you get the best price on every possible purchase.

Probably no one would argue too much about this because these numbers are human size. An average family blows a hundred bucks a month on dumb stuff? Sure. A business with half a dozen employees makes $20,000 worth of mistakes each year? Sure. But what about a federal government that spends upwards of $3 trillion per year? The same rate of WFA amounts to $50 billion or more. Or, using the usual budget window, $500 billion over ten years. That seems like an outlandish amount, but it's actually the same 2% as everyone else.

None of this is to say that we shouldn't fight this stuff. Families should, small businesses should, and the government should. Hell, Coburn's book might be a public service. But even if we do a rip-roaring job of fighting WFA and run the cleanest government in human history, any decent investigator will still probably be able to find at least 2% waste in the system. It seems like a huge amount, but it's largely a mirage based on people getting fooled by numbers too big for human comprehension. This happens a lot in modern society.

UPDATE: This doesn't really affect the main point of the post, but I was off base on the abduction figure. It's based on a 2002 report by David Finkelhor, which estimates 115 abductions per year "perpetrated by a stranger or slight acquaintance and involving a child who was transported 50 or more miles, detained overnight, held for ransom or with the intent to keep the child permanently, or killed."

However, a definition that includes any kind of abduction, even those lasting only a few minutes or a few hours, brings the tally up to 58,000 per year — and obviously parents are concerned about these kinds of abductions too. Some of them are what you'd think of as child snatchings and some aren't, but in any case the number is far higher than 115. Using the broader definition, the odds of having your child snatched is (depending on how broadly you cast your net) one in a thousand or less, which is quite low but still nowhere near the odds of being struck by lightning.

Virginia's Anti-Gay-Troops Lawmaker Speaks (VIDEO)

| Tue Dec. 21, 2010 3:31 PM EST

Yesterday, we brought you news of Virginia state Delegate Bob Marshall and his plan to keep gays out of the state's National Guard, no matter what the Union federal government says about Don't Ask, Don't Tell. Marshall declined to return a call to his cell phone by Mother Jones, but he was happy to expand on his beliefs for DC television station WUSA. Video's below, but here are the money quotes (h/t Washington Post). Open mouth, insert foot. But not in a gay way!:

  • "If I needed a blood transfusion and the guy next to me had committed sodomy 14 times in the last month, I'd be worried."
  • "It's a distraction when I'm on the battlefield and have to concentrate on the enemy 600 yards away and I'm worried about this guy who's got eyes on me."

[NOTE: Marshall has never been on a battlefield. Though in his youth he did take combative positions on incest and staffing the military ranks. And in the interceding years, he's become something of an expert on power lines.]

For his part, Virginia Gov. Bob McDonnell—who someday might like to be president of the entire United States, not just commander in chief of the Army of the Potomac—told listeners to his monthly radio show that he wasn't supporting this particular Marshall plan:

We can't have two different systems in the federal and National Guard...Whatever the final guidelines of the Department of Defense I would expect the National Guard bureau in Virginia to adhere to those rules so we would have one set of rules for the entire military.

There's a new battle of Richmond brewing! And this time it feels as if, no matter who wins, the South is definitely losing.

Chart of the Day: The Ascent of Man

| Tue Dec. 21, 2010 1:57 PM EST

Here's the latest Gallup poll on what Americans think of evolution 85 years after the Scopes monkey trial. Obviously progress has been slow. But on the bright side, the hardcore creationist position has lost a bit of ground lately while straightforward evolution has shown steady gains over the past decade. The "humans evolved with God guiding" position has stayed steady, and this is the position I associate with people who basically believe in evolution but don't want to be mistaken for godless atheists—which is OK with me. All in all, then, things could be worse. I'm thinking of making that my motto for 2011.