A new study by the Center for Analysis of Postsecondary Education and Employment (CAPSEE) has found that 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.
The study, which used data from the 2004 to 2009 Beginning Postsecondary Students (BPS) longitudinal survey, also found that these students carry heavier debt burdens and are more likely to default on their student loans.
For-profit colleges have experienced a boost in enrollment in recent years, currently educating 13 percent of all college attendees – an increase of about 8 percent in ten years. And this analysis has 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.
"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 study found that for-profit graduates also recorded higher rates of loan defaults. 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."
While 26 percent of all federal student aid goes to for-profit tuition, making up three quarters of the sector's revenue, the analysis suggested that the poor employment and earning outcomes of for-profit students may explain their high rates of loan defaults.