Enrollment at for-profit colleges and universities has boomed over the past few decades, skyrocketing from 18,333 in 1970 to 1.85 million in 2009. Over the past decade alone, the percentage of college students attending for-profit schools has almost tripled, from 5 percent in 2001, to 13 percent today.

So, how are these for-profit schools doing, most of which are significantly more expensive than their public university counterparts? According to a new study, not so well:

Students who attend for-profit colleges are less likely to be employed and have lower earnings six years after enrolling than similar students who attend public and not-for-profit colleges, according to a new study by authors affiliated with the Center for Analysis of Postsecondary Education and Employment (CAPSEE). They also carry heavier debt burdens and are more likely to default on their student loans.

And yes, the survey was controlled to account for demographic differences such as age, income, and ethnicity. For-profit students simply have poorer outcomes and report less satisfaction with their educations, than public and not-for-profit students of similar circumstances and backgrounds.

How could this be? If the market always makes the most efficient allocation of resources, and the private sector always outperforms the public, how is it possible that for-profit universities don't out perform their public university counterparts? If you're a free marketeer, clearly the problem must be the dangerous market-distorting impacting of taxpayer-subsidized public universities. Simply eliminate government funding for our public college and university systems (as we are wisely on our the way to doing here in Washington state), the uber-capitalists might argue, and the market will fix itself.

Or something.

Though, of course, not all government subsidies. While for-profits enroll only 13 percent of our nation's college and universities students, they now consume 26 percent of federal financial aid and 24 percent of GI Bill tuition expenditures—over $1 billion in GI Bill money to eight for-profits alone. Indeed, in 2009, combined federal money accounted for an astounding 91.5 percent of revenue for Kaplan Higher Education (a wholly-owned subsidiary of the Washington Post).

So no, we would want to eliminate all that federal student loan and grant money. I mean, we wouldn't want to destroy all those valuable private sector jobs.

So what explains the extraordinary growth of the for-profit higher education industry when it produces substantially poorer outcomes at a substantially higher price than its public college and university counterparts? Well, they advertise like hell. That's gotta play a role.

But so too must our shortsighted disinvestment in our public college and university system. For example, Washington now stands 48th out 50 states in baccalaureate capacity, annually producing less than half the four-year degrees necessary to meet the needs of our state's employers. So some students must surely choose for-profit institutions simply because the lack of capacity at public ones leaves them no other choice.

And if there's one thing the market inarguably does well, it is generating supply to meet demand... however shoddy the final product.