Examining For-Profit Colleges

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My graduate school curriculum, in clinical social work, consistently emphasized "self-awareness," or being conscious of one's feelings, beliefs, biases, and overall state of being. I suppose a benefit of this training is that I've developed a habit of trying to recognize and challenge my own biases.

One bias I've had since childhood concerns the role of for-profit colleges. It likely originates from peers who made fun of certain teachers at our elementary school because they had attended for-profit universities. Back then, I thought they were institutions where students bought an easy low-quality degree. More recently, I've considered them overpriced, insufficiently regulated, and limited in educational effectiveness. Now an article by David J. Deming, Claudia Goldin and Lawrence F. Katz in the Postsecondary Education issue of the Future of Children that has given me a more nuanced view.

They explain that for-profit colleges have seen a large increase in enrollment during the past fifteen years. Possible explanations for this include overcrowding at community colleges, aggressive marketing strategies, a more career-oriented curriculum, and the ability to quickly expand program capacity for high-demand occupations. Importantly, they enroll a disproportionately high share of disadvantaged and minority students, and those who are less prepared for college.

To me, this doesn't sound too bad. It seems that they help meet the demand for higher education, especially among the disadvantaged, and might even be considered innovative. But there's more to the story.

Graduates of for-profit schools tend to have higher loan balances and default rates than comparable students at nonprofit schools, have lower earnings on average, are less likely to be employed six years after initial enrollment, and are less likely to believe their education was worth the cost. Additionally, a very high portion of for-profit revenue (sometimes close to 90%) is drawn from students' federal financial aid. Partially due to the high cost to taxpayers and students, the federal government recently proposed stricter "gainful employment" regulations that could put schools with poor outcomes at risk of losing federal aid eligibility. If the regulations are implemented, some schools will likely need to restructure their programing to stay in business.

Deming and colleagues come to several conclusions. First, for-profits schools seem necessary to help meet the growing demand for higher education. Second, for-profit colleges generally work best with short, well-defined programs that are occupation-oriented. Finally, since longer programs have the potential to amount to great costs to students, they  need to be well regulated. The authors recommend requiring counseling by an independent third party to ensure that prospective students understand financial aid packages and accompanying obligations, and to restrain aggressive and misleading recruitment practices.

Bias confirmed? Partially, since for-profit colleges tend to be more expensive and seem to need more regulation to help prevent negative outcomes. However, it was unfair of me to believe these were all low-quality degrees, especially given the strengths of for-profit education.

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