Consider the following four charts depicting the growth in Minnesota's state tax dollars flowing to for-profit companies operating colleges in Minnesota. These companies include publicly traded national for-profit college chains (such as University of Phoenix, Corinthian, and Career Education Corporation) and a couple of very large privately held for-profit colleges based on Minnesota (such as Minnesota School of Business and Globe College) Here are the top 10 schools that received Minnesota State Grant funds in 2009.
The interest of these national chains is understandable. Minnesota is a national leader in the amount of State need-based student aid that goes to for-profit colleges.
As you can see, Minnesota is #5 in the total amount of need-based aid going to for-profit colleges. In this 2008 survey by the National Association of State Student Grant and Aid Programs, Minnesota also ranked in the top 5 in the proportion of state need-based aid that goes to for-profit colleges.
The amount of federal and state need-based financial aid going to Minnesota for-profit colleges has increased dramatically from 2004-2009.
And the growth of the number of students at for-profit colleges receiving state need-based aid money has outpaced students at all other institutions.
The powerful Minnesota Chamber of Commerce has prioritized protecting this source of revenue for the for-profit college industry. One of their listed "2009 Legislative Accomplishments:"
We defeated a proposal to make for-profit higher education institutions ineligible to receive state grant dollars.Here's the Chamber's higher education agenda:
Minnesota should invest 30 percent of the state higher education appropriation in programs that distribute resources directly to consumers, thereby giving them access to the higher education opportunity that best fits their individual needs. The best way to give consumers choice in higher education is to allocate the revenue to the Minnesota State Grant Program – the state’s need-based aid program – to help lower- and middle-income students access and afford a college education or additional training beyond a high school diploma. The remaining 70 percent of the appropriation should be invested in the public institutions. The state should expand the parameters of the Minnesota State Grant program whenever Congress expands Pell grant funding to maximize grants in Minnesota.If adopted, this proposal would triple the biennial allocation for the Minnesota State Grant program and pay for it by cutting support for public higher education commensurately.
Why is it that Minnesota lags behind the national realization that the for-profit college industry is doing a disservice to their students and is public money poorly spent? It's because the powerful Chamber, patron of Tom Emmer, has spent resources and political capital protecting the industry.
It's time that Minnesota started paying attention. Unlike MN2020, I am not comforted by the absence of Minnesota for-profit companies on the list of those investigated by the GAO. The same national chains operate here. At a minimum, the investigative resources of the Legislative Auditor, turned recently toward MnSCU, need to be turned on the for-profit college industry. And it is about time that Minnesota joined the majority of states that spend little or no state tax money subsidizing their profits.
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Aaron Klemz is an Instructor in the Communication Department at Century College in White Bear Lake, Minnesota. His views are his own, and are not the views of his employer.