Sunday, June 27, 2010

Notes on the Epidemic of Privatization

Here are two snippets regarding the replacement of public provision of services with less desirable private sources.
Kaplan University has an offer for California community college students who cannot get a seat in a class they need: under a memorandum of understanding with the chancellor of the community college system, they can take the online version at Kaplan, with a 42 percent tuition discount. The opportunity would not come cheap. Kaplan charges $216 a credit with the discount, compared with $26 a credit at California's community colleges.

For better or worse, the tough times for public colleges nationwide have presented for-profit colleges with a promising marketing opportunity.

In California, the memorandum of understanding also requires each community college taking part to sign a credit-transfer agreement with Kaplan -- and most of the state's 112 community colleges are not eager to do so. Thus far, Kaplan has no takers for its courses. "Faculty from across the state were uniformly irate and disappointed about the memorandum of understanding," said Jane Patton, president of the Academic Senate for California Community Colleges, partly because faculty members were not consulted.

Lewin, Tamar. 2010. "For-Profit Colleges Find New Market Niche." New York Times (24 June): p. A 17.

Where the Metropolitan Transportation Authority sees a sure-fire way to lose money, Joel Azumah sees dollar signs." "Mr. Azumah, the president, owner and sometimes-driver of TransportAzumah, thinks he can make money running buses along three routes that the MTA plans to shut down this weekend as part of deep service cuts to fill a yawning deficit. The MTA says it was losing almost $2 million a year on the X90, X25 and X29 express bus routes.

Grossman, Andrew. 2010. "Route to a Fare Profit? One Private Bus Operator Aims to Benefit From MTA's Pain." Wall Street Journal (25 June).


Kenny said...

It's not clear where the epidemic is, nor is there any privitisation going on in either of these cases.

As for "less desirable," clearly Kaplan falls under that, which is why community colleges are not signing on. But it is not clear why private buses running on lines that would otherwise be discontinued are any worse.

I'm not disputing that privitisation can be a bad thing, especially when state assets are sold off for a one-time budget fix, but that isn't what's happening here.

Debra said...

Sticking a price tag on EVERYTHING eventually bottoms out WHAT you pay FOR and WHAT you pay WITH... (money).
The idea that education=paying for a diploma will eventually collapse when people figure out that all they need to do to become educated is to check books out of their local STILL PUBLIC library (for example). AND when employers figure out that a diploma does NOT equal competence or being educated either.
And people will no longer fall for the myth that it is necessary to sollicit an institution of higher learning for an education either.
Last time I checked... THINKING was still free...
In many senses of the word.

michael perelman said...

Education is more than just reading books for most people. Education should be a community of learning rather than just a private activity.

Defunding public activities, whether mass transit or education is tantamount to privatization. And yes, there is an epidemic going on.

Kenny said...


Your statement that "Education should be a community of learning rather than just a private activity" doesn't make sense, because you're conflating the two meanings of the word private: 1) secluded, isolated; 2) not publicly owned. We're talking about the second one here, not the first. As you know, most of our great universities are private and this in no way stops them from having robust communities of learning.

The difference here is not private vs public, but non-profit vs for-profit. From what I understand, for profit colleges tend to have a more applied, vocational mission rather and don't generally supply a liberal arts education. I don't know how effective they are or whether the education is worth the money.

However, $200 a credit is not outrageously expensive. It is $26 per credit that is crazy. Community colleges in New York cost around $125 a credit, and are considered a bargain. At state universities in New York, it is $359 per credit. (I live in NY, which is why I'm using it as an example).

In any case, the article about public transportation is more interesting.

Here you have a cash-strapped government agency, the MTA, which despite huge fare increases, still finds itself in the red by hundreds of millions of dollars. So they locate a few routes that are not cost effective, and cut them. Then, a private company comes in and says it can provide the same service. What is the problem here?

I think private bus services are great. Look at the success of Megabus. They sell many of their seats for $1 and offer free wi-fi.

The governent exists to do all the things we want that cannot be effectively provided by the private sector. Bus service requires very little aside from a bus and someone to drive it, so I see no reason why private companies can't do this well.

Jack said...

"Bus service requires very little aside from a bus and someone to drive it, so I see no reason why private companies can't do this well."

That's a bit too simplistic. I'm not suggesting that bus service can't be effective as a private enterprise, but don't forget to factor in some means by which the safety of the service, the qualifications of the drivers, the insurance of the carrier, etc. can be verified and/or monitored. There's always a public cost to be considered.

Also, post secondary public education had always been the means by which the working class has moved ahead. The cost of SUNY schools is now in the neighborhood of $15,000. A bargain compared with privates, but essential if we expect to give those that deserve a college education a fighting chance. Keep in mind that CUNY was once free. Now that all of NYs politicians have gotten their own reduced price educations, the state can no longer afford to offer the same educational opportunity to those who are not very wealthy. They can borrow you say? So they're out of school with a tab approaching $200K. May as well have bought a news stand in Manhattan.

Kenny said...


Yes, I was being simplistic and of course there are all the things you mention to be considered. What I meant was that there is not a huge upfront capital cost like there is for subways and rail systems, which also require some eminent domain that we certainly don't want private companies to have a right to.

And I know all about problems with the SUNY system. I'm currently paying $700 a month in minimum payments on my public education.

They've been raising tuition 10% a year at SUNY Albany and not a dime of it goes to the school. I taught math there for a couple of years, and they made us ration our whiteboard markers, 6 per semester... They also are not replacing professors who retire.

They are really letting their liberal arts departments fester. However, they've managed to become the #1 school in the nation for nanotech, so I guess they just have different priorities.

There is certainly a serious problem with education in this country. I'd be interested if a study could be performed to determine how much of the premium placed on a college education is a product of diminished academic acheivement among high school students. If high school left students better prepared for the workforce, is it possible demand for college education would fall over time?