The Economist takes a look at American for-profit higher education ... from the outside:

Meanwhile for-profit colleges have started hiring “mystery shoppers” to test their sales practices. The University of Phoenix is working to disconnect recruiters’ pay from the number of students recruited. It is also encouraging students to take on less debt. To reduce the number of dropouts, it is offering students a three-week “orientation” during which they can quit without charge. Kaplan plans to go further, regulators permitting, by offering students a full refund if they drop out during their first term. Mr Graham would like such a refund to be made mandatory, to drive the “bad actors” out of the industry.

The leading for-profit colleges hope to survive by putting their own houses in order and by calling for new regulations that apply to higher education as a whole. And they make another, broader, claim. When the full cost of loans and subsidies is added up they are significantly cheaper for the taxpayer, per graduate, than public and non-profit institutions. Given the Obama administration’s ambitious plans to expand higher education, a rush to impose more burdensome regulations may not be such a good idea.