Tuesday, June 9, 2015

Education in the News: Nevada's Voucher Program and Corinthian Colleges

There have been two big education stories in the news this past week:

First, Nevada became the first state to offer vouchers to every public school student (regardless of income), which can be used for tuition at a private school or for supplies for home schooling. The vouchers will be worth approximately $5,400.00 per student. The Washington Post's story is here.

The law was passed by Nevada's Republican-controlled legislature and signed by Governor Brian Sandoval (he's in the picture to the left). Teachers' unions and public school superintendents are very upset about the law, fearing that it could permanently damage the public school system.

I studied Milton Friedman's philosophical underpinnings of vouchers (along with charter schools) when I wrote my law review article in 2003-04. I think it's interesting that, as charter schools have continued to gain popularity and support, there is now a state that's willing to try the voucher experiment. I think it's an appropriate experiment and will be curious to follow its effects.

The second story is that Arne Duncan announced a loan forgiveness program for students at Corinthian Colleges (the NYT's story is here).

Corinthian is a network of for-profit colleges that declared bankruptcy this spring amid widespread allegations of fraud. Many of its students use federal loans to pay the bulk of their tuition.

The amazing detail in this story is that, if all Corinthian students take advantage of the loan forgiveness, US taxpayers would be footing the $3.5 billion bill! This is a significant amount of money and I am actually surprised that the Department of Education has the authority to make this decision without Congressional input. That said, it sounds as though there are some Republicans (including John Kline, head of the House Education and Workforce Committee) who support Duncan's position.

Lamar Alexander, on the other hand, objects strongly:
“Students have been hurt, but the department is establishing a precedent that puts taxpayers on the hook for what a college may have done,” said Senator Lamar Alexander, Republican of Tennessee, and chairman of the Health, Education, Labor and Pensions Committee. 
“This is one more reason it was a bad idea to make the U.S. Department of Education the banker for students as well as the regulator of their colleges,” he continued. “If your car is a lemon you don’t sue the bank that made the auto loan; you sue the car company.”
Upon initial reflection, I'm inclined to agree with my old friend, the sweater-wearing Lamar (I always appreciated his moderation): it seems that the appropriate target for students' frustration would be Corinthian rather than the US government. That said, I do appreciate that Corinthian is not in a position to forgive the student loans and, therefore, it's up to the Department of Education to make the decision about whether to pursue the loan payments.

Here's some background about the company, from today's story in the Times:

Founded in 1995, Corinthian became one of the country’s largest for-profit education companies, buying up struggling vocational colleges across the country. It formerly had more than 110,000 students at 100 Heald, Everest and Wyotech campuses nationwide. The company was a longtime target for federal and state regulators, with a host of investigations and lawsuits charging falsified placement rates, deceptive marketing and predatory recruiting, targeting the most vulnerable low-income students.

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