Report: For-Profit College Students Earn Less After Graduation Than They Did Before

Image courtesy of RiddimRyder

For-profit college chains often market themselves to non-traditional students — single parents, lower income individuals, military servicemembers — as a viable path to better job prospects and more money. However, a new report suggests that enrolling in of these sometimes costly schools may not help students reach their goals.

A study recently published by the National Bureau of Economic Research found that most students who enroll in certificate, associate and bachelor’s programs at for-profit colleges and universities generally see a decline in earnings five or six years after attendance, when compared to how much they earned before attending classes, Inside Higher Ed reports.

“Analysis of degree-seeking students suggests that on average associate’s and bachelor’s degree students experience a decline in earnings after attendance, relative to their own earnings in years prior to attendance,” the report states.

The study is based on Dept. of Education and the Internal Revenue Service data on 1.4 million students who enrolled in for-profit schools between 2006 to 2008.

Authors of the study suggest that the finding of negative economic impact of enrolling in for-profit colleges could be partially due to a large number of students who never graduate, but still acquire loads of student loan debt.

“The negative earnings effects we find are troubling given the debt that students incur to attend for-profit institutions,” the study says. “Examining the distribution of average annual earnings effects and average annual debt payments reveals that the vast majority of for-profit students experience both higher debt and lower earnings after attendance, relative to the years before attendance.”

Of those student who do graduate, the report found that many see a positive impact on wages, however, the authors suggest this is a minority for bachelor degree-seeking students, where only about 30% actually graduate. For master’s degree students, 60% of whom graduate, the impact is more positive.

When it comes to students seeking certificates, the report found that of the top 10 areas of study only graduates of cosmetology experienced higher earnings than their public sector counterparts.

However, the report notes, that none of the top 10 fields can be “shown to generate positive total earnings gains for for-profit students.”

“In absolute terms, we find no evidence of improved earnings post-enrollment for students in any of the top 10 for-profit fields and we can rule out that average effects are driven by a few low-performing institutions,” the report concludes.

Not So Gainfully Employed [Insider Higher Ed]