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Study Finds Mixed Results for Students Attending For-Profit Colleges

January 3, 2012, 1:54 pm

For-profit colleges educate a disproportionate share of minority, disadvantaged, and older students, and are more successful at retaining students in their first year and graduating them from short-term programs than are public or private nonprofit colleges, according to a recent study by a trio of Harvard University economists.

However, the study, which was cited in a recent government report on student success, also found that students who attend for-profit colleges are less likely to be employed than comparable students from nonprofit institutions, and tend to have lower earnings six years after enrolling. They also carry heavier debt burdens and are more likely to default on their loans.

The study relied on data from the Education Department’s Beginning Postsecondary Students Longitudinal Study, which followed a sample of first-time students who began their higher education in 2003-4, from their enrollment through 2009.

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  • somethingclever

    And of course, Senater Harkin’s report on the for-profit sector found that they were MUCH more likely to NOT retain students in the first year.  BPSLS data is older.

  • bearjimmy

    Students of for-profit collegess are absolutely horrified to drop out of college.  If they do, within months they must begin repaying those BIG student loans finance their studies. And, without a job, they’d end up in default, and as such ruin their credit rating, then, not be able to get a job, or additional student loans to return to college.  Beyond that, given the for-profit colleges earn money for their sharholders via students paying thier outrageous tuition with BIG student loans, the staf of the for- profit colleges go out of their way to keep as many studnets in the pipeline as possible. 

  • haohtt

    Senator Harkin, who is definitely no researcher, only used data a few of the larger online programs regarding student retention.  You are correct that the BPSLS data is older and much more robust than the few schools looked at in Harkin’s report.  Regarding the finding the for-profit graduates were making less than the non-profit graduates: that is true; however, the Parthenon Group, who examined the same data a year earlier, also looked at the students’ pre-enrollment earnings.  While the non-profit grads were making, on average, a couple thousand dollars a year more than the for-profit grads, those who began their programs at for-profit colleges, had, on average a pre-enrollment income several thousand less than those who went to non-profit colleges.  The difference between pre- and post-enrollment income after 5 years at the non-profits was a 36% gain, while the for-profit students saw a 54% gain.  So, only look at one end of the salary data does not necessary provide the whole story.

  • adjunctivitis

    We have no idea what “comparable” students are in the study.  Did the researchers include Harvard undergraduates or only students from the Harvard extension program? Graduates of the Air Force Academy should have near 100% placement in the government sector, for example. 

  • bigjoe

    This “might” be true; however, we will never know.  Since the non-profit schools would not even attempt to even try with many of these students.  I guess that you feel that these students do not deserve an education and should work in a “minimum wage job” for the rest of their life.  Not everyone graduates from a for-profit; however, many students also fail at the major universities.  True, they may have more debt, but the rewards are worth the effort because the major universities would not even let them try.

  • MarjoryMunson

    Thank you for pointing out that when pre- and post-enrollment data were compared, for-profit student income gains were substantial. This indicates that the differences were probably due to factors that steer students to for-profits in the first place. Another cautionary tale against relying on statistics without serious examination.

  • richardtaborgreene

    Reality needs to learn how to pose questions simple enough for legislators to formulate and understand.    Reality needs to get its act together and start communicating clearly to legislatures.  

  • bearjimmy

    I’m all for everyone getting an education, and as such support publicly funded elementary, secondary, and college level schools with the taxes I pay at the local state, and national levels.  Whereas I can not stop someone from dropping out of school prior to getting a high school diplomoa at the tax payers expense, I would like all 50 states to pass laws requiring a high diploma to qualify for a divers license.  As for whether I want the students enrolled in for-profit institutions to have a chance at getting an education, of course I do; however, that does not mean that their tuition money to come from education loans they’ll never be able to repay, i.e., chefs diplomas, and certificates, and the EDMC groups’ various interior design and kitchen and bath related certificates and degrees.   Publicly funded community colleges have these certificates and degrees, and are  required to admit any and all applicants, even illegal immigrants in some states.

    That being said, education isn’t a birth right.  Indeed, to have time to pursue education a person must have the available time to pursue coursework successfully.  Money is available from all kinds of sources, but quality free time to study, and learn is something only an individual can set aside in their individudal lives.

    Beyond that, the number of veterans, and enlisted persons pursing coursework via various for-proft colleges and “universities” is mind boggling.  If these degrees really do lead to employment beyond minium wages, with careers awaiting the taking of a degree, or certificate, then, I’m all for it.  Sadly, though, most enlisted persons use online courses offered via for-profit insitutions as a means to have something to do with their time while fullfilling their miliarty obligation elsewhere without family or friends.

    And, lets not forget all those persons who are currently enrolled, or have already taken Ph. Ds, Ed. Ds., MBAs, and a plethora of MA/MS degrees online without ever being seen by a live person.  Tax payers are on the hook for these degrees, too, when their employers of the student or degree recepient deduct the tutition paid from their books prior to paying their taxes.

    In summary, many degrees and  certificates offered by for-profit institutions are targeted at a group for the purpose of making as much money for investors as possible.  I personally do not believe healthcare, education, and welfare (e.g., social security, medicare, and medicare) should be affilated with the for-profit sector of the business community, unless the services are paid for up front by the end user.

  • big_giant_head

    Perhaps not, but community colleges will.  And CC credits transfer. And CCs often charge less than $100 per credit hour. Just sayin’.

  • bigjoe

    I agree that they should eliminate the on-line “paper mills” that just take money for no value.  I also agree with the on-line chef that will just become another “fry-cook” should be eliminated.  I received my degrees from a state university; however, I was never promised a job, and the university did nothing to help me with a job search.  I was also “real” in my classes.  I may have loved history, but I did not want to teach in high school, so I majored in a science field with job prospects in the real world.  Many students today want to be led, and they are going into fields with very few job prospects.  You listed healthcare.  Where I live, an RN can make a very good living and get hired almost upon graduation.  My daughter was offered a position upon graduation that paid over $35 per hour, when she graduated.  Since she was a single mother with two children, she is happy with her for-profit school RN education since the community college would not work with her work schedule.  She also had to take the same state tests that everyone was required to pass to be an RN.  I just think that it is funny when a fro-profit school has to have a pass rate of 85% or get into trouble, whereas Kentucky State University can have a pass rate less than 45% and nothing happen.  Granted the 55% KSU graduates have less debt, but they still have a worthless piece of paper when it comes to nursing.  I still say that ALL BAD schools Public and Private should be closed.   

  • annon1234

    I have taught in private non-profit, private for profit and state schools. The least prepared (on average) students are the ones I have taught in the for profit sector. There are also a number of students in my classes who have flunked out of other schools. The for profit sector also offers the fewest remedial classes to bring people up to speed. Instead classes are watered down. Many classes I teach online have no tests. Those that have them are open book, open note, and the students get one hour for each 10 questions (generally the easy ones in the test bank). There is significant pressure to pass these students. The quality of education is inferior to the other places I have taught (and as a faculty member at a for profit I have next to no control over the book, class design, what is on the tests, etc.).

    There are also a large number of students in school for the financial aid refund (viewed as an alternative income stream). This phenomena isn’t limited to the for profit sector, however the problem appears to be bigger in that sector. Somehow this needs to end across the board at all institutions. Students who do this would be more likely to default because they have gotten nothing for their education and, at least in my classes, many seem unaware that bankruptcy won’t discharge that debt and that the feds will come after you in a variety of ways to get it back. I know for sure that they are told this as they are enrolling, I don’t think they believe it and/or aren’t really listening as some students have admitted to me when we discuss this in class that they has no intention of repaying their loans and had been counting on declaring bankruptcy. When whomever it is that is collecting CEO and top exec pay at the for profits (reported in the Chronicle recently) posts that information I think it will be clear where the cash is going. It is not going to the full time faculty (who are paid less than most non-profit private and state schools, often by 10′s of thousands of dollars), certainly not to the adjuncts (who are paid far less as well). Hopefully whomever is collecting this data will realize that bonuses, stock options, etc. often far outstrip salary of these top officials. I had to laugh when they said that one CEO got 2.3 million (or something close to that)  and were floored because that is roughly what our provost gets. Our CEO gets over 7 million a year when you combine all the monies above and beyond salary.One fundamental underlying issue is that credible schools need to offer more night classes at all levels of education for students who can’t come to day classes. There also needs to be an extensive remedial program for students who never learned high school material the first time around or who are so many years out of school that they have forgotten most of that material. The answer is NOT what many of the for-profits are doing which is watering down a student’s education.

  • http://www.facebook.com/people/Paul-Wangsvick/26717288 Paul Wangsvick

    One of my favorite dirty little secrets about for-profits is how some advertise lifetime job placement assistance contingent on completing one of their programs. Sounds great in theory, but at the for-profit I work for approximately 75% of the graduates are terminated within 3 months of their first job placement because, as the employers note in their evaluations, the graduates perform well below acceptable SLO standards. There are numerous reasons for why this is, but central to the problem is that most for-profits treat students as customers while maintaining very limited, if any, standard(s) for admission and matriculation.

  • http://www.facebook.com/people/Paul-Wangsvick/26717288 Paul Wangsvick

    I second this. Exact same experience. And because the academy is already brutal in securing employment of any kind, many of us become complicit with the agenda of for-profits because our jobs depend it.

  • bearjimmy

    First, I want to respond to bigjoe’s comment about his daughter taking a RN degree from a for-profit college.  Given the number of registered nurses who commit horrible crimes against their patients, including mursey killing to prevent further suffering, albeit the number is low, it still happens annually around the country, is it really a good idea to award any healthcare degree to someone that has never been observed in peson by a professional in that field?  To that end, I’m writing just about online RN degrees, including M Nursing for those already holding a BN.  I believe there are some  professions that require in  person supervision for evaluation purposes to ensure the public’s safety.

    Second, public univerisities do not promise a job to a student who matriculates to take a  degree, unless the degree is in a program holding specific accreditation that requires job placement, and or passage of an examination to enter the profession, i.e., law, medicine, architecture, nursing, and some areas of engineering.  Many degrees offered at for-profit colleges recruit students using career placement services as a carrot with a hook inside to get attention of prospective students, then, hook them securely via the prospects of student loans to pay for the coursework and subsequent degree.

    Third, sadly, many people see access to higher education the same way they see getting prepared food to eat, i.e., McDonald’s et al.  In other words, the coursework required for the degree stands between the student and the ability to earn BIG $s (meaning above minimum wage from the get go as opposed to working one’s way up the ladder to earn a higher salary in years to come).  For-profit colleges will do whatever it takes to get students to matriculate, then, stay enrolled until the money runs out.  And, Legislators in DC have helped students with high load dept get arround having to fill bankruptcy.  Now, they can get a stay on the loan repayment based upon a low income. After 25 years of this, the loan is “forgiven” without ever once paying on cent for the original student loan.  Many students take out more in loans each semester than is needed to pay tuition, using the extra money to provide themselves with a car, housing, food, etc.   

    Fourth, in response to annon1234, I’m guessing you work for a for-profit due to the need to earn a living, and that is commendable.  However, your siutation is similar to the people who pick up garbage for a living, whom are called sanitary engineers in some municipalities, i.e., NYC.  Whereas picking up garbage might not be a great way to make a living for most of us, in the end, it pays the bills, including providing healthcare insurance, and retirement, something few in society get these days.  Almost everyone’s job has some element of distaste.  For those of you who elect to work in the for-profit education  industry, I recommend doing whatever it takes to help improve the situation for faculty, and students.  Otherwise, you are the victims of busines managers whose salaries are based on getting the most out of you for the least amount of reward, i.e., salary and benefits.  

  • bigjoe

    The for-profit that my daughter graduated required many hours clinical experience working in several different hospitals as part of her education.  She did not take classes 0n-line.  She had to attend classes at the school and the clinicals at the many different hospitals in the city.  By the way, the nurse that killed the old Vet at the VAMC in Lexington, KY, graduated from the University of Kentucky.  I guess that the state universities can produce individuals that kill patients.  The Medical staff at Caesar Sini almost killed the Quaid twins a few years ago.  Do you think that their entire medical staff on duty that night graduated from for-profit schools?  As I stated before, the bad schools (public and private) should be closed.  The same rules should apply to ALL schools. 

  • blesstayo

    What you invest in is what you get! If for-profit institutions are not highly ranked, how do you expect their graduates to be competitive in the marketplace??? People who are already successful in the real-world can afford to pay high tuition and attend for-profit schools to earn higher degrees and fulfill life’s dream!!!

  • lizziec

    A recent article in the Huffington Post highlights the issue with Nursing grads from a California for-profit who are not passing the state board exam (see article here: http://www.huffingtonpost.com/2011/12/30/community-college-for-profit-college_n_1174243.html) and my experiences teaching in the for-profit arena mirror the ones outlined by annon1234 and others here.

    There appears to be such an obscene amount of money to be garnered from running a for-profit “education” venture that any hope of holding their feet to the fire through legislation is doomed (PACs too strong and money from lobbyists too enticing). I have come to believe that the only way to combat this is to get the information out to students, parents and others as to what they can expect from a lot of these schools which is a lot of debt and not much else.

    As a disclaimer, not all “for-profits” are bad, but the big, national chains certainly have a track record that I wouldn’t be proud of in terms of promising very ill-prepared students a chance at the American Dream, loaning them outrageous sums of money then providing them a marginal education (at best) for 15-prices, and not supplying the requisite academic coaching that they would need to have half-a-chance at succeeding.

    The for-profit cheerleaders will undoubtedly come out of the woodwork now and begin to assail those of us who speak out launching irrelevant personal attacks and vitriol, but none of that changes what educators like annon1234, Paul W and me have observed over and over again.

  • rwejd

    This might be more an indictment on general American culture than the for-profit colleges. We all know that our culture does discriminate against those who are not in the mainstream.

    I am no fan of for-profit college abuses, and have been delighted to see the worst of their bredd take on serious heat; however, I have recently noticed a serious “piling on” by the Chronicle, who knows that it’s readers are mostly from the traditional college sector. How about soem data on how many History majors from Villanova have found a job in their field?

    Also, what about the accrediting agencies that have let the worst of these schools gain credentials? What about them? They go on their merry way, without any investigation into their mandates, and how they have let the public down? how about DOE, before the Harkin hearings? Why have we been funding the worst of these schools, for so long, without a peep from anyone?

    What about placement records for the typical certificate program at a Community College? how about the compensation abuses of Chancellors or Regents who give themselves raises while raising tuition?

    Of course, all that might not ring too well with the CHE’s base, right?

    Yes, there are for-profit abuses – lot’s of them. What I would like to see is more solid reporting that uncovers the sleaze on the other side of the college world. How about it CHE?

  • bearjimmy

    The giant for-profit chain of colleges and universities owned by EDMC has an online nursing degree.  Like most of the DO collegles of medicine, I’m guessing all the practical experience is actually taken in real settings under persons not affilated with the for-profit college, i.e., U. New England’s DO degree.  That being said, the Nursing profession has moved in another direction, and within years the D. N. P. (Doctor of Nurse Practice) will replace the current RN degrees offered at the AA, BS, and MS levels.  At the same time, with so-called baby boomers heading into their twighlight years, the nursing profession is going to grow, hence, the reason the for-profit insitutuions have already jumped on that bandwagon.

    One of the most visible “for-profit cheeleaders” as you call them is one of Maine’s US Senators, Olympia Snowe.  Oddly enough, her husband, a former governor of Maine, is the Chairman of the EDMC board.  EDMC is a subsidaray of Goldman Sacs.  Last sumer, the faculty of one of the EDMC’s campuses in San Francisco tried to unionize.  I believe the fate of their effort is sadly what will be the fate of any for-profit faculty, or faculty member who tries to force honesty into that system.  How then do unsuspecting prospective students, their parents and spouses who co-sign for the BIG student loans to finance coursework at for-profit institutions ever learn what’s going on until it is too late, meaning someone has matriculated, and the hook is set, i.e., the first student loan has to be repaid if the student stops registering for more courses via the for-profit insititution.  Thankfully, the student could transfer to a non-profit, but that may mean hardships the student was trying to avoid which led to the decision to pursue the certification, or degree offered at the for-profit.

    By the way, EDMC also owns a for-profit law degree, too.     

  • dave8543

    I spent 22 years in the military, prior to the online phenomenon, going to classes at night to earn my Associate’s and Bachelor’s degrees, and it took me almost 17 years because classes weren’t available everywhere I went, my assignments, deployments, and duties prevented me from taking courses, and so forth. Online classes would have been the saving grace to complete my degrees much sooner. 

    After retirement, I stayed involved in military education programs, which are still quite robust with degree-seeking students at every military camp, base, and station, not just Soldiers taking classes for something to do on deployments when away from their families. I later obtained my Master’s degree using about 2/3 online classes while stationed overseas by my employer, from a traditional university. I then obtained my doctorate from one of the evil for-profits (University of Phoenix) that was mostly online with a mix of Residency courses. It was one of the most challenging, difficult, yet educationally rewarding learning experiences I’ve ever had. I would gladly match it against the doctoral program in a comparable field at any traditional university in terms of rigor, quality, and output.I also teach online classes at both a for-profit and private not-for-profit universities with many soldiers on deployments doing very tough jobs in very challenging circumstances who are actively pursuing degrees – not just hanging around for something to do. They are serious students working hard toward personal and professional goals, officer and enlisted, undergraduate and graduate students, from all the Services.So I would take issue with your statement that “most enlisted persons use online courses offered via for-profit insitutions [sic] as a means to have something to do with their time while fullfilling [sic] their miliarty [sic] obligation elsewhere without family or friends.” That’s simply not accurate.

  • dave8543

    I couldn’t agree more. Let’s get rid of all the fly-by-night for-profits and stop lumping together those and the for-profits that are seriously trying to provide education to students – even if many don’t like the for-profit model. Let’s also force the public and private universities that are taking taxpayer money to live up to the same standards and be accountable for how their outcomes match the investment of those taxpayer dollars. 

    Then we can start having some serious discussions and comparisons about the two models and how they might coexist or even be improved to better serve the population of students!

  • bearjimmy

    As far as I can tell, when you were pursuing course work via an on ground military college course work toward a college degree was not offered via  the internet.  Over the past 5 + years, though, the number of enlisted military personnel who take college level courses via online format is very high, especially for those men and women who live outside the united states in support areas of war.  And, their tuition is paid for by Uncle Sam.  It depends on which online college is used for the coursework as to whether it leads anywhere after the person is discharged.  I have read accounts, though, of enlisted men and women taking online course work via the various for-profit colleges owned by EDMC, who reported they were just taking the courses to fill time while living in isolated places.  Please accept my apology for any typos in this note, as well as the one you quoted above.  I type to fast, and without a spell check sometimes post messages with typos.  

  • jcbmack

    annon,

    perhaps it is time for you to teach at a different for profit that cares about the education and training of its students. Which for profit(s) do you teach at, since you are being anonymous? Also non-profit University bureaucrats tend to make millions themselves; how is that defensible?  

  • jcbmack

    bearjimmy,

    neither do any reputable for profits promise a job to those seeking a degree. Also if you read bigjoe’s post he clearly states his daughter was trained and supervised by professionals.

  • jcbmack

    lizziec,

    I do not take your point lightly, however, as someone who attended a traditional non-profit college first and who worked in a reputable state university laboratory while attending a for profit online university, I have a few things to add. Non-profits, and especially research institutions will dress up research studies/design methodology as being more revolutionary and ground breaking for potential, “robust results” than they are in reality to gain extra funding. For example in a program I worked in sponsored by the NSF we were taught how make research ideas seem more important than they were, and we were encouraged on how to “kiss butt” to make connections so we could have more funding for publishing. We were also told about those non-profit dinner parties and how scoring favor puts not only more money in our respective research but also in our pockets as well, provided our professors running the lab get first name on a paper and funding for their lab. The research labs at this large research based State University were below the quality of a community college, even with hundreds of thousands of dollars in grants! Any new equipment ordered, whether computers or assessment equipment did not work right, was not calibrated correctly and most of the graduate students had little to no working knowledge on how to use said equipment.

    CNN and ABC recently highlighted how: NYU, Cornell and Stanford graduates had severe difficulty finding work and were NOT gainfully employed months after graduation.

  • jcbmack

    The handful of serious for profit offenders need to be either closed down or restructured, but not all for profits are designed or implemented equally.

  • jcbmack

    In the end the arithmetic mean is not always the best measurement of central tendency.

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