Higher Education and Financial Flimflam

The Wall Street Journal says that the Class of 2011 will be the most indebted in history,with average indebtedness of $22,900. Actually, given the long standing estimates of the lifetime earnings advantage of a college education, I don't have a great issue with the average. I do, however, have a great deal of issue of the total lack of any scrutiny around what constitutes the "higher education," which generates that indebtedness.

In my parlance, what used to be called vocational schools, or technical ed schools have now substituted the word "College" in their names, probably driven by marketing and financial types. Former colleges have now substituted the word "University" in their names, and nothing has changed from when they were merely colleges. Online institutions advertise on late night television and infomercials about their ability to let you earn a university degree in your pajamas. The last time I tried to look at some of these offerings, I couldn't even figure out who the faculty were or where they earned their graduate degrees. Meanwhile, what all of the Presidents realized is that in the realm of higher education, there is no need to compete on price.

So, if it costs $45,000 a year to attend an Ivy League university, it should shock no one that it costs almost that much to attend Lake Winnipausaukee University. If a graduate ends up with $29,000 in debt for graduating from Yale, that's one thing; the same amount of debt from the Joshua Tree State University is quite something else. The lifetime earnings prospects of these two graduates are quite different.

What Federal agency is in charge of looking into this flimflam?