A study has found what students have known for years: for-profit colleges aren’t beneficial for the average student.
“Students who enroll in certificate, associate and bachelor’s programs at for-profit colleges and universities generally see a decline in earnings (and typically greater debt) five or six years after attendance, compared to their earnings before enrollment,” Scott Jaschik wrote for Inside Higher Ed.
“Students” shouldn’t be understood as “graduates.” The students who don’t complete a certificate or degree are worse off after attendance, but the graduates see “positive earnings effects,” according to the study.
“Our difference-in-difference analysis of certificate students suggests that despite the much higher costs of attendance, earnings effects are smaller in the for-profit sector relative to the effects for comparable students in public community colleges—a result that holds for all but one of the top ten fields of study,” Stephanie Riegg Cellini of George Washington University and Nicholas Turner of the U.S. Department of the Treasury wrote.
Students, usually older and attending the college part-time while working, have fled for-profits in recent years. Spring enrollment at for-profits was 9.3 percent lower compared to a year ago, compared to a 2.8 percent decline for community colleges. The four-year graduation rate at for-profit institutions is only 22.5 percent, compared to the 39.4 percent average among for-profits, nonprofits, and public institutions, according to the National Center for Education Statistics. For two-year degrees, however, it has a respectable 62.8 percent graduation rate after three years, compared to the 29.4 percent average.
Finishing on time leaves students in a better position, but those graduates are part of a lucky cohort.
The lackluster results don’t stem from a few shoddy schools, either.
“Our school-level regressions reveal that the weak performance of the for-profit sector is not limited to a few poor-performing institutions, rather the majority of schools appear to have negligible average earnings effects,” Cellini and Turner noted.
The study isn’t definitive — more academic analysis is necessary to gauge the overall effects. It isn’t all bad news for for-profits, either, but its results should give prospective students pause before taking out loans to attend the institution.
“Although we cannot control for the positive selection of graduates, the 60 percent of students who complete for-profit college certificate programs and the roughly 30 percent who complete associate’s and bachelor’s degree programs appear to experience positive earnings gains,” Cellini and Turner wrote.
The results echo the experience of students in nonprofit schools. A degree, completed in a timely manner, can benefit graduates. For those students who drop out or can’t finish their degree, though, their college experience is an unfortunate reminder of money squandered and time wasted.
