Using up the Oxygen

A while back I speculated that a large cut-rate online university might evolve to vacuum up the vast market of students who don't make the cut at more traditional four-year institutions.  I called it Cyberdon Rex.  This thundering beast still hasn't made an appearance, but the atmosphere of higher education is changing anyway, and rapidly.  According to this PBS Frontline piece entitled College, Inc., the privates are rolling in the cash:

And the cash cow of the for-profit education industry is the federal government. Though they enroll 10 percent of all post-secondary students, for-profit schools receive almost a quarter of federal financial aid.

They also generate a disproportionate amount of defaulted loan debt, according to the introduction.   Of course, all this might be worth it if the economic return to the economy in the grand scale tips the scales back.  Is that the case?  That's a difficult question for the federal government to address, and front and center there will be learning outcomes. 

We should expect two things: more limited PELL grants, as the privates suck the oxygen out.  Or at least pressure to stop the bleeding from government coffers.  Secondly, this could easily increase pressure for some kind of standardized learning outcomes test, like NCLB, so that colleges really can be compared (so the theory goes), and those who flunk lose accreditation and hence federal aid.  This would be a terrible waste, I think.  But it behooves us to get in front of this with alternative proposals.  I think the most direct one is a pitch I've made before: ask the government to provide us with employment figures for our graduates using IRS data.  Then we can make direct arguments about the economic impact of degrees.  Anything less than that is a proxy.  Why even look for a proxy when the real information is there?