Prisons, Colleges, and the Private-Sector Delusion
Republicans have been touting the inherent superiority of the private sector over the public at least since the Reagan era, but in the past few years it seems to have congealed into an unassailable mantra: the free market as the ultimate guarantor of good services, low costs, and a free and happy citizenry. Mitt Romney is definitely on board. Campaigning this winter, he praised the efficiency of for-profit colleges that he said “hold down the costs of education,” and went on to say, “I just like the fact that there’s competition. I like the fact that institutions of higher learning will compete with one another, whether they’re for-profit or not-for-profit.”
Romney’s education plan calls for putting commercial banks back in charge of federal student loans. (The Obama Administration had stopped that practice in 2010, saying it was too expensive for the federal government.) He has floated the idea of partially privatizing both veterans’ health care and Medicare through a voucher system. We’ve heard more from him about his experience at the private-equity firm Bain Capital than about his tenure as governor of Massachusetts, and he presents his business experience as self-evidently worthwhile: “The fact is I spent 25 years in the private sector, and that obviously teaches you something that you don’t learn if you haven’t spent time in the private sector,” Romney told Time magazine, in a typical declaration.
I thought about the free-market shibboleth this
week as I read two excellent pieces of journalism about the injection
of the profit motive into education and incarceration. One was Andrew Leonard’s article at Salon about a company called Corinthian Colleges, and the other was Cindy Chang’s eight-part series in the New Orleans Times-Picayune about the prison industry in Louisiana.
Leonard’s piece is not the first to look in detail at the dubious business of for-profit colleges. After Romney talked them up in December, the New York Times ran a long article highlighting the low graduation rates and high tuitions at many for-profit colleges and reported that the C.E.O. of the college Romney had singled out for particular praise, Full Sail, in Florida, was a major donor to his campaign. A 2011 study from the National Bureau of Economic Research found that students who attended for-profit colleges had more of a debt burden, were more likely to default on their loans, and were less likely to be employed than students who’d gone to nonprofit institutions.
In 2010, the Obama Administration announced that it would be seeking new regulations on the for-profit college industry. But the industry fought back, hard. According to the Web site OpenSecrets, which tracks lobbying efforts, for-profit colleges went from spending $2.7 million on lobbying in 2009 to nearly $7.4 million in 2010 and $12.5 million in 2011. Prominent Democrats, including Obama’s former communications director, Anita Dunn, who was working with Kaplan University, and the former House Majority Leader Richard Gephardt, joined the lobbying effort; so did investors such as Donald Graham, the chief executive of the Washington Post, which owns Kaplan. According to the Times, the result of this full-court press was “a much-weakened final plan” for regulating the industry “that will almost certainly have far less impact as it goes into effect next year.”
That’s where an article like Leonard’s comes in. He’s been covering this issue for a while, doesn’t seem inclined to let it go, and shouldn’t. Leonard invokes the “numerous lawsuits” against a company called Corinthian Colleges, including one in which a former admissions officer described high-pressure, even bullying recruitment tactics at one of the company’s schools, Everest: “The ultimate goal was to essentially make [potential students] wallow in their grief,” the admission officer’s affidavit says,
Moreover, Corinthian, like other for-profits, depends on students taking out federal loans to pay their pricey tuitions, and the default rate on those loans is unusually high. In 2012, California enacted a new law excluding colleges from a state financial aid program if their student-loan default rate over three years was more than 24.6%. “Of the state’s 167 for-profit schools, 67 failed the test…. None of California’s public schools failed.”
Chang’s series in the Times-Picayune, meanwhile, took a close look at how it is that Louisiana nearly doubled its prison population in the past twenty years, to become the state with the highest per-capita incarceration rate in the country—the highest in the world, in fact. (Adam Gopnik has written for The New Yorker about our mass-incarceration culture.)
What Chang finds is a system under which the state began housing the majority of its inmates in for-profit facilities, many of them run by cash-strapped local sheriffs and some by private prison companies. Both have a financial incentive to keep the prisons full— like hotels, prisons in Louisiana don’t want any vacancies. “If the inmate count drops, sheriffs bleed money,” writes Chang. “Their constituents lose jobs. The prison lobby ensures this does not happen by thwarting nearly every reform that could result in fewer people behind bars.” (The Picayune reported this week that Chang survived the massive layoffs at the paper—which, sadly, will also be cutting back to just three days a week in print—but she’ll no longer have the “special projects” reporter designation that allowed her to do this ambitious investigation.)
Private prisons save money by paying employees less and training them for shorter periods; as a result, turnover is high, assaults more frequent, and safety records generally poorer than in government-run prisons. And because this is incarceration on the cheap—the sheriffs get about twenty-five dollars a day per inmate—there is no money to pay for educational or vocational programs, even though these prisoners tend to be serving time for non-violent, often drug-related offenses, and so will be released into society, where they will have to make their way.
“If you are sentenced to state time in Louisiana,” Chang writes, “odds are you will be placed in a local prison in a low-budget, for-profit enterprise, where you are likely to languish in your bunk, day after day, year after year bored out of your skull with little chance to learn a trade or otherwise improve yourself. A coveted spot at a state prison like Angola, Hunt or Dixon is a long shot for anyone not convicted of a violent crime such as murder, rape, or armed robbery.” Yes, you read that correctly: coveted spots in state prisons like Angola.
Like the for-profit college industry—but with a longer track record—the for-profit prison industry devotes ample funds to lobbying and to campaign donations. As a result, it has been able to keep alive the notion that it does the job more efficiently than public prisons, even when evidence to the contrary keeps piling up.
But the worst part is that policies a majority of citizens might want—a lower rate of incarceration, perhaps; less draconian drug laws; programs that train inmates for re-entry to society or oblige them to work—are likely to be blocked by a company that has its own, money-making interests to fulfill. As the Corrections Company of America’s 2010 annual report puts it, “the demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through decriminalization of certain activities that are currently practiced or proscribed by our criminal laws.”
Letting the private companies do public work may or may not be efficient; it depends on the job, and the oversight. What it frequently is not is democratic, or just.
Photograph by Ed Kashi/Corbis.
Leonard’s piece is not the first to look in detail at the dubious business of for-profit colleges. After Romney talked them up in December, the New York Times ran a long article highlighting the low graduation rates and high tuitions at many for-profit colleges and reported that the C.E.O. of the college Romney had singled out for particular praise, Full Sail, in Florida, was a major donor to his campaign. A 2011 study from the National Bureau of Economic Research found that students who attended for-profit colleges had more of a debt burden, were more likely to default on their loans, and were less likely to be employed than students who’d gone to nonprofit institutions.
In 2010, the Obama Administration announced that it would be seeking new regulations on the for-profit college industry. But the industry fought back, hard. According to the Web site OpenSecrets, which tracks lobbying efforts, for-profit colleges went from spending $2.7 million on lobbying in 2009 to nearly $7.4 million in 2010 and $12.5 million in 2011. Prominent Democrats, including Obama’s former communications director, Anita Dunn, who was working with Kaplan University, and the former House Majority Leader Richard Gephardt, joined the lobbying effort; so did investors such as Donald Graham, the chief executive of the Washington Post, which owns Kaplan. According to the Times, the result of this full-court press was “a much-weakened final plan” for regulating the industry “that will almost certainly have far less impact as it goes into effect next year.”
That’s where an article like Leonard’s comes in. He’s been covering this issue for a while, doesn’t seem inclined to let it go, and shouldn’t. Leonard invokes the “numerous lawsuits” against a company called Corinthian Colleges, including one in which a former admissions officer described high-pressure, even bullying recruitment tactics at one of the company’s schools, Everest: “The ultimate goal was to essentially make [potential students] wallow in their grief,” the admission officer’s affidavit says,
feel that pain of having accomplished nothing in life, and then use that pain as their “reasons” to compel the leads to schedule an in-person meeting with an Everest admissions representative.A spokesman for Corinthian denied this account of its recruiting, but, as Leonard writes, “there’s little question that an obsessive focus on constantly boosting enrollment is crucial to survival in the for-profit college world. Sky-high withdrawal rates plague the industry.”
Moreover, Corinthian, like other for-profits, depends on students taking out federal loans to pay their pricey tuitions, and the default rate on those loans is unusually high. In 2012, California enacted a new law excluding colleges from a state financial aid program if their student-loan default rate over three years was more than 24.6%. “Of the state’s 167 for-profit schools, 67 failed the test…. None of California’s public schools failed.”
Chang’s series in the Times-Picayune, meanwhile, took a close look at how it is that Louisiana nearly doubled its prison population in the past twenty years, to become the state with the highest per-capita incarceration rate in the country—the highest in the world, in fact. (Adam Gopnik has written for The New Yorker about our mass-incarceration culture.)
What Chang finds is a system under which the state began housing the majority of its inmates in for-profit facilities, many of them run by cash-strapped local sheriffs and some by private prison companies. Both have a financial incentive to keep the prisons full— like hotels, prisons in Louisiana don’t want any vacancies. “If the inmate count drops, sheriffs bleed money,” writes Chang. “Their constituents lose jobs. The prison lobby ensures this does not happen by thwarting nearly every reform that could result in fewer people behind bars.” (The Picayune reported this week that Chang survived the massive layoffs at the paper—which, sadly, will also be cutting back to just three days a week in print—but she’ll no longer have the “special projects” reporter designation that allowed her to do this ambitious investigation.)
Private prisons save money by paying employees less and training them for shorter periods; as a result, turnover is high, assaults more frequent, and safety records generally poorer than in government-run prisons. And because this is incarceration on the cheap—the sheriffs get about twenty-five dollars a day per inmate—there is no money to pay for educational or vocational programs, even though these prisoners tend to be serving time for non-violent, often drug-related offenses, and so will be released into society, where they will have to make their way.
“If you are sentenced to state time in Louisiana,” Chang writes, “odds are you will be placed in a local prison in a low-budget, for-profit enterprise, where you are likely to languish in your bunk, day after day, year after year bored out of your skull with little chance to learn a trade or otherwise improve yourself. A coveted spot at a state prison like Angola, Hunt or Dixon is a long shot for anyone not convicted of a violent crime such as murder, rape, or armed robbery.” Yes, you read that correctly: coveted spots in state prisons like Angola.
Like the for-profit college industry—but with a longer track record—the for-profit prison industry devotes ample funds to lobbying and to campaign donations. As a result, it has been able to keep alive the notion that it does the job more efficiently than public prisons, even when evidence to the contrary keeps piling up.
But the worst part is that policies a majority of citizens might want—a lower rate of incarceration, perhaps; less draconian drug laws; programs that train inmates for re-entry to society or oblige them to work—are likely to be blocked by a company that has its own, money-making interests to fulfill. As the Corrections Company of America’s 2010 annual report puts it, “the demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through decriminalization of certain activities that are currently practiced or proscribed by our criminal laws.”
Letting the private companies do public work may or may not be efficient; it depends on the job, and the oversight. What it frequently is not is democratic, or just.
Photograph by Ed Kashi/Corbis.
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