Matt Miller with some good points about how the federal student loan system leads to excessive costs for post-secondary education:

This is the insight missing from the current debate. The federal student loan system subsidizes (1) fat and happy faculties and fancy amenities at traditional nonprofit colleges, as well as (2) hefty earnings at for-profit schools which, after lowering the cost of delivering education, find themselves able to pocket the savings instead of passing them on to the student/consumer.

From society's point of view, the biggest opportunity in education in the decade ahead is the way innovative learning technologies can lower costs while boosting quality. This should be, as the business jargon holds, a "win-win" for the for-profits.

If student debt is a problem, and it is, it makes sense to apply any "gainful employment" rule to all colleges, rather than to for-profits alone.

But whatever happens as these new rules are implemented in next few years, for-profit colleges will never get out from under a cloud, nor make good on their potential social contribution, until they pass on to students the benefit of the lower educational cost structures they are creating. To date, they've been reluctant to do so, because, for public companies especially, it seems tantamount to ignoring the shareholder interest in maximizing profits.

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