NC Budget and Tax Center

As North Carolina students embark upon a new school year, lots of media coverage has focused on waning state-level support for public schools. This waning support extends beyond public schools to both ends of the education pipeline – early childhood and higher education. Whereas North Carolina should be boosting investments in its entire education pipeline in order to become a more competitive and attractive state, we have taken a different path.

Early childhood programs, like NC Pre-K and the Child Care Subsidy Program, are crucial to promoting the healthy development of North Carolina children. Although child poverty has worsened since the Great Recession, state investments in early childhood programs remain woefully inadequate while waiting lists persist. Today, the NC Pre-K program serves approximately 8,000 fewer four-year olds compared to 2009 peak levels during the recession (see chart below).

Chart 1

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The Pope Center for Higher Education is out with a new article in which it laments the fact that student loan debt and loan defaults are both up in North Carolina.  This is obviously not an unimportant problem and so good for them for raising it.

As one might have suspected, however, the group’s conclusion as to why this is so and what ought to be done about it are mostly the usual market fundamentalist gibberish.

According to the Pope people, too many North Carolinians go to college — especially minority students who go to HBCU’s. The “solution,” therefore, is for all those kids who are trying to better themselves to cut it out. Better to get a job in retail or fast food and get on with life as a cog in the new post-industrial North Carolina.

Uh, earth to Pope people: Your article never mentions the word “tuition” except to say that it’s generally lower in HBCU’s.  In case you hadn’t noticed, it’s been skyrocketing in the UNC system in recent years as conservatives have repeatedly slashed the state’s commitment to higher education.

A critical and obvious part of the solution to the problem of rising student debt — notwithstanding the Pope group’s denials — is to lower tuition and the other costs associated with higher education.  That an article would purport to discuss the problem of rising student debt without even paying lip service to the rapidly rising cost of attending college (or for that matter, the proliferation of predatory, for-profit colleges) is a testament to the amazingly powerful blinders with which the ideologues on Right Wing Avenue view the world and dispense their toxic policy prescriptions.


The indictments of the often-predatory for-profit college industry continue to pile up. This is from a new article by Prof. Stephanie Cellini for the Brooking Institution in which she argues that public community colleges are regularly a much better bet for students:

“Some back-of-the-envelope calculations suggest that for-profit associate’s degree students need at least an 8.5 percent annual earnings gain to cover the cost of tuition, foregone earnings, and debt service at a typical for-profit college. Our estimates fall short of this threshold, suggesting that for the average student, the earnings gains are too low to justify the cost and generate a positive return on investment. It also suggests that many students may not have full or accurate information on the earnings gains that they can expect post-college.

How do these estimates compare to the social costs of a for-profit education?  Adding in costs to taxpayers in the form of federal student grant aid, loan defaults, and other sources of federal funding would require a 9.8 percent earnings gain to cover the cost to the individual and society. In the public sector, despite higher taxpayer costs, the much lower costs to students means that  only a 7.2 percent annual gain is needed to cover the combined private and social costs—a figure well below current earnings gains estimates in that sector. These figures again suggest that—on average—public institutions may be a better deal for students and taxpayers.”

Of course, as Lindsay Wagner reported recently, lousy performance is far from the only common problem when one patronizes the for-profit college industry. There’s also the risk of blatant, predatory rip-offs.


A for-profit higher education company made a presentation at the N.C. legislature Wednesday, in part to make a pitch for the state to establish a central office where businesses can request help meeting their workforce needs.

Scott D’Amico of Apollo Education Group , the parent company for the University of Phoenix, said he conducted a survey of manufacturing businesses, and found that many wished they had more awareness of what the higher education system can do to help train future workers.

D’Amico said he surveyed the companies on behalf of the N.C. Chamber of Commerce, as a way of gauging the needs of North Carolina’s business community.

Though there are many groups in the state that work on issues surrounding training future workers with needed skill sets, many employers are often unaware of those efforts, D’Amico said.

“The manufacturers don’t always hear about this,” he said. “There were a lot of disjointed efforts”

D’Amico’s 12-page presentation (click here to view) at the Senate Workforce and Economic Development committee meeting was met with some skepticism by lawmakers, several of whom pointed out that the state’s community college system and commerce department already work closely with employers.

“Do you not do the same things our community colleges do?,” asked state Sen. Jerry Tillman, an Archdale Republican and an influential member on education issues. “I would hope and expect our chamber would be just as anxious to work with our community colleges.” Read More


In case you missed it, I have a story on our main site today that takes a look at how the now-defunct for-profit Corinthian Colleges sold many students up a creek, including some North Carolina veterans who are saddled with big debts and worthless degrees and coursework.

In response to the story, one reader questioned on our Facebook page: Who accredited this scam?

That’s a great question.

So—when it comes to accrediting for-profit career colleges like Corinthian, here’s what I have learned.

Accrediting agencies that approve for-profit colleges also receive money from the very schools they are supposed to be holding accountable.

You read that correctly. The two national accrediting agencies that approved Corinthian schools—the Accrediting Commission for Career Schools and Colleges (ACCSC) and the Accrediting Council for Independent Colleges and Schools (ACICS)—each receive their funding in the form of fees from the schools they accredit.

At a congressional hearing in 2013, Kevin Carey of the New America Foundation compared this arrangement to some of the practices that have taken place on Wall Street.

“This is like bond ratings firms giving AAA ratings to mortgage-backed securities sold by the same firms that pay their fees,” Kevin Carey, the director of education policy at the New America Foundation, said at the hearing. “It does not work out well in the long run.”

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