Fair Is Fair: One Rulebook for All Colleges
Few ideas feel more American than “equal rules for equal players.” Yet in higher education, two parallel universes coexist: stringent regulations for for-profit institutions and comparatively lighter oversight for their non-profit counterparts. If a rule is designed to protect students and taxpayers, shouldn’t it apply regardless of a school’s tax status?
Why For-Profits Face Stricter Scrutiny
- Historical abuses. Aggressive recruiting and poor completion rates in the 2000s triggered headline scandals and federal crackdowns.
- Perceived incentives. Shareholder returns, critics argue, can conflict with student outcomes.
- Targeted policies. Rules like Gainful Employment and the 90/10 revenue test were drafted specifically to curb for-profit excesses.
That backstory explains the asymmetry, but it doesn’t justify keeping it forever.
Non-Profits Aren’t Immune
- Some private non-profits post lower graduation rates than their for-profit peers.
- Tuition-driven non-profits can still chase revenue through pricey master’s programs and online certificates.
- Both sectors compete for the same federal aid dollars and the same students’ hopes.
If transparency in job placement or limits on federal-aid dependence are sound public-interest safeguards, exempting non-profits creates blind spots—and quietly tells bad actors where to hide.
Toward a Single Standard of Fairness
- Outcome-Based Metrics for All. Whether a school is public, private, or for-profit, measure debt-to-earnings ratios, graduation rates, and default rates the same way.
- Unified Consumer Disclosures. Students deserve comparable data dashboards across every sector.
- Even-Handed Accountability. Penalties for poor performance or incentives for strong results should follow outcomes, not IRS classifications.
Where the Non-Profit Exception Came From
Congress originally drew a bright line, assuming mission differences: for-profits “sell” education, while non-profits “serve” it. But mission does not guarantee outcomes. Endowments and tax exemptions do not immunize schools from misaligned priorities, especially in a competitive tuition marketplace.
The Bottom Line
If a regulation truly advances student success and fiscal responsibility, it should be sector-agnostic. Good actors whether for-profit or non-profit will thrive under transparent, performance-driven rules. Bad actors no matter their label won’t. Equal rules are not only fair; they restore public trust in higher education as a whole.
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Fair Is Fair: One Rulebook for All Colleges
Few principles ring truer in a democracy than “equal rules for equal players.” Yet American higher education operates under two divergent regulatory regimes: tight restrictions for for-profit institutions and looser oversight for non-profits. If a regulation truly protects students and taxpayers, why should its force depend on a school’s tax status?
1. Why For-Profits Face Stricter Scrutiny
| Rationale | Detail | Why It Still Matters |
| Historical abuses | High-pressure recruiting, inflated job-placement claims, and loan defaults in the early 2000s led Congress to clamp down. | Past misconduct created a policy reflex: “If in doubt, tighten the screws on for-profits.” |
| Perceived incentives | Shareholder returns can conflict with student success, pushing campuses to chase enrollment volume. | Yet many for-profits now operate under PE ownership that rewards long-term EBITDA, not short-term churn. |
| Targeted policies | Gainful Employment, the 90/10 Rule, and cohort-default penalties hit only for-profits. | Carving out one sector perpetuates stigma, even when performance metrics have improved. |
Takeaway: The stronger guardrails were justified but they’re now blunt instruments, catching both responsible and irresponsible operators.
2. Non-Profits Aren’t Immune to Failure
Low completion rates. Roughly 33% of four-year non-profit colleges graduate less than half their first-time freshmen numbers as poor as the most criticized for-profits.
Tuition inflation. Some private non-profits rely on pricey online master’s programs that generate margins rivaling those of Wall Street darlings. Mission statements don’t pay faculty salaries; tuition does.
Opaque outcomes. While non-profits escape Gainful Employment tests, fields like journalism, art history, and certain liberal-arts majors often carry debt-to-earnings ratios similar to the programs the rule punishes in the for-profit world.
Thought experiment: If we applied the same “debt-to-earnings” cutoff universally, how many non-profit programs in low-salary disciplines would fail?
3. Toward a Single Standard of Fairness
| Reform | How It Works | Benefit |
| Outcome-Based Metrics for All | Measure graduation, employment, and debt metrics identically for every institution. | Focuses on performance, not tax status. |
| Unified Consumer Disclosures | One dashboard tuition, net price, salary, default rate for every program nationwide. | Empowers students to compare apples to apples. |
| Even-Handed Accountability | Penalties (or bonuses) keyed to outcomes alone. | Removes regulatory arbitrage and stigma. |
**Few bad apples shouldn’t spoil the bushel **but a mixed barrel is impossible to sort when half the apples (non-profits) are never inspected.
4. Would Liberal-Arts Programs Survive Stricter Tests?
- Journalism & Arts Degrees: Average early career pay often lags debt loads; under universal rules, some non-profit programs could lose federal funding unless they reduce tuition or improve placement.
- Niche Humanities Majors: Outcomes differ drastically by institution. A classics degree at an Ivy may pass; the same program at a minimally selective college might not.
- STEM vs. Non-STEM: Uniform metrics would highlight cross-subsidies—STEM surpluses often prop up liberal-arts deficits even at elite schools.
Implication: Transparency and accountability might force boards to rethink program pricing, size, or support services—uncomfortable, but student-centric.
5. Where the Non-Profit Exception Came From
Mid-20th-century lawmakers believed non-profits were intrinsically mission-driven and therefore self-regulating. That assumption no longer aligns with today’s competitive, tuition-dependent ecosystem. Missions remain laudable, but mission alone cannot guarantee results.
The Hidden Cost of Unequal Regulation: A Looming Shortage in Skilled Trades
America’s homes, hospitals, and critical infrastructure rely on HVAC technicians, plumbers, electricians, and medical assistants professions often trained at career-focused, for-profit colleges. Yet these schools operate under a stricter regulatory regime than their non-profit counterparts. The unintended consequence? A growing, nationwide shortage of skilled tradespeople.
How Bias in the Rulebook Hurts Supply
- Enrollment Bottlenecks
- For-profit trade schools face the 90/10 Rule, cohort-default penalties, and program-level Gainful Employment tests that non-profit community colleges largely avoid.
- When federal aid exposure nears regulatory caps, schools cap enrollment or close campuses shrinking the pipeline just as retirements accelerate.
- Capital Constraints
- Private investors hesitate to back HVAC or welding programs when a single debt-to-earnings fluctuation can trigger federal sanctions.
- Non-profits rarely step in; many community colleges already operate at capacity or lack funding for hands-on labs.
- Negative Signaling
- The public narrative that “for-profits = predatory” deters students from high-ROI trades programs, pushing them toward four-year pathways that may not suit their goals or the labor market.
The Real-World Impact
- HVAC & Refrigeration: The Bureau of Labor Statistics projects over 20,000 unfilled positions each year through 2032 jobs critical for climate-control systems in data centers and hospitals.
- Electricians & Plumbers: Infrastructure spending is rising, but the workforce is aging; nearly 30% will retire in the next decade.
- Medical Assistants: Outpatient clinics and telehealth hubs need support staff, yet program closures in allied-health colleges are widening gaps, especially in rural counties.
A Fairer Path Forward
If safeguards like debt-to-earnings ratios and transparency dashboards are genuinely student-centric, they should apply to all institutions, allowing quality programs regardless of tax status to expand. Leveling the playing field would:
- Encourage responsible for-profit operators to invest in new labs and campuses.
- Free community colleges from under-resourced waitlists.
- Give students clear, comparable data to choose the best-performing programs.
Keeping two sets of rules starves the trades pipeline just when the nation needs it most. A unified, outcomes-based regulatory framework would protect learners and ensure America has skilled professionals to keep the lights on, the water flowing, and the operating rooms running.
