We are in a periodic of extreme economic dislocation and people are retraining and starting businesses in an attempt to put themselves in a better economic position. Because of the economic uncertainty, may are willing to try almost anything to survive. Beware, some choices can leave people in a worse position.
The Center for Analysis of Postsecondary Education and Employment (CAPSEE) has produced a truly scary study about what happens to the graduates of for-profit colleges. According to the press release for the study, For-Profit College Students Less Likely to Be Employed After Graduation and Have Lower Earnings, New Study Finds :
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.
Over the past decades, for-profit colleges have experienced explosive growth in enrollment, with numbers increasing from 18,333 in 1970 to 1.85 million in 2009. Currently, for profit students make up 13 percent of all college attendees, up from 5 percent in 2001.
However, until now, student outcomes for these institutions have been poorly understood, not least because the students they serve are not always analogous to those who attend public and non-profit colleges. The analysis found that for-profit colleges serve a larger fraction of students who tend to struggle in college: minority, older, and independent students who are disproportionately single parents, have lower family incomes and are twice as likely to have a GED.
To ensure comparable results, the study—which used data from the 2004 to 2009 Beginning Postsecondary Students (BPS) longitudinal survey—controlled for observable student characteristics such as income, age and ethnicity. The analysis indicated that students who attend for-profit schools are more likely to persist through their first year and to earn certificates and associate degrees than their counterparts at community colleges. However, despite these higher completion rates, for-profit students are more likely to experience long term unemployment and report less satisfaction with their education in the six years after they enroll.
The poor employment and earning outcomes of for-profit students may explain their high rates of loan defaults. Currently, 26 percent of all federal student aid goes to for-profit tuition, making up three quarters of the sector’s revenue. The researchers found that almost 25 percent of for-profit students default on their loans within three years. This rate is 10.5 percent higher than that of similar students who attend public or non-profit institutions and accounts for almost half of all student loan defaults.
See, Study: For-Profit Colleges Offer Weak Job Prospects, Pay http://www.educationnews.org/higher-education/study-for-profit-colleges-offer-weak-job-prospects-pay/
Here is the citation:
The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators? (A CAPSEE Working Paper)
By: David Deming, Claudia Goldin, and Lawrence F. Katz| February 2012
Download the paper: The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?
Journal article:This study also appears in the winter 2012 issue of Journal of Economic Perspectives.
CAPSEE project: Project 6: The Role of the For-Profit Sector in Higher Education
The conclusions of this report have been echoed in prior reports.
The General Accounting Office (GAO) produced a report which details just how far from bargains some for-profit schools are. According to the article, GAO: 15 For-profit Colleges Used Deceptive Recruiting Tactics written by Daniel de Vise and Paul Kane some for-profit schools used deceptive practices to recruit students. Tamar Lewin reported in the New York Times that Report Finds Low Graduation Rates at For-profit Colleges With any education opportunity, the prospective student and their family must do their homework and weigh the pros and cons of the institution with with the student’s goals and objectives. See, Report Faults For-profit Colleges As Providers of ‘Subprime Opportunity’
Victor Hugo said it best when dealing with many for-profit colleges:
Caution is the eldest child of wisdom
Buyer beware of some for-profit colleges http://drwilda.wordpress.com/2011/11/25/buyer-beware-of-some-for-profit-colleges/
Dr. Wilda says this about that ©