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Technology & Innovation

The Problem with For-Profit College

Should the government continue to give loans to students who attend for-profit colleges given their high dropout and loan default rates? Gary Becker and Richard Posner weigh in on the debate.

Should the government continue to give loans to students who attend for-profit colleges given their high dropout and loan default rates? Gary Becker and Richard Posner weigh in on the debate. “College graduates earn substantially higher salaries than less-educated workers, but it is doubtful whether, in the aggregate, graduates of for-profit colleges earn enough more to compensate for the costs and the dropout risk,” says Becker. Posner writes that, “while stiffer default rules on government subsidized student loans are needed, for-profits should not be discriminated against in these rules since they offer valuable forms of education. With lower allowable default rates, for-profit (and other colleges) would cut back on the number of students accepted whom they expect to eventually default on their student loans.”


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