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Why the profit motive fails in education

TJ Ryan Foundation Research Associate, John Quiggin, writes in The Conversation (10.12.19) about why market forces don’t work well in education, arguing that for-profit businesses are more tempted to exploit loopholes than provide quality service.

‘The Morrison government’s waiving of almost A$500 million in dodgy vocational education and training debts holds many lessons about the nature of education and public services being provided by for-profit enterprises.

‘The debts were collected by about 38,000 students unwittingly locked into federal VET FEE-HELP loans by dodgy for-profit education providers. Thousands more complaints seeking to have debts waived have yet to be processed.

‘One of the lessons from the disastrous mix of public funding and private profits in the VET sector is that policymakers infatuated with the dogma of “reform” are incapable of learning from experience.

‘That’s true of both sides of politics.

‘… As centuries of experience has shown, only the dedication and professional ethos of teachers can ensure high-quality education. Reliance on incentives and markets is inconsistent with that ethos.

‘The broader problem with the reform agenda is that for-profit businesses paid to provide public services are more tempted to make profits by exploiting loopholes in the funding system than by innovating or providing better services.’

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