Report finds graduates of for-profits lag on income

Evaluating Student Outcomes at For-Profit Colleges, a recent report by economists Kevin Lang and Russell Weinstein of Boston University, finds that students who start certificate programs at for-profit institutions have significantly worse outcomes than students starting at not-for-profit/public institutions. In fact, in 2009, income was approximately $5,500 lower for students who started at for-profit institutions than for students started at not-for-profit/public institutions.

Using a sample of almost 17,000 students who began post-secondary education for the first time in the 2003-04 academic year, the economists employed the Beginning Post-Secondary Student Survey to examine outcomes for those entering certificate and associate's degree programs.

After controlling for background variables such as preparedness for college and pre-college academic performance, their report concludes that after completion of college, income is significantly lower for students at for-profit institutions.

The report also found that students who started associate's degree programs at for-profit institutions had significantly worse outcomes than those who started at not-for-profit/public institutions. Their income was approximately $3,000 less than the income of students starting at not-for-profit/public programs.

These findings are significant because supporters of for-profit colleges have argued that they give opportunities to an under-served group. However, the large share of federal student aid money that is channeled to for-profit colleges has led to increased scrutiny of the for-profit sector. Contrary to the arguments by those who embrace for-profit institutions, this study shows that students who attend them have worse economic outcomes than similar students who attend public and private non-profit institutions.

Full text of the report is available for a fee at the National Bureau of Economic Research website.

– George Awuor