A researcher from GW found in a study published this week that students who enroll in certificate, associate or bachelor’s degree programs at for-profit institutions generally experience a decline in earnings and greater debt five or six years after attendance, Inside Higher Ed reported.
Stephanie Riegg Cellini, a professor of public policy and public administration and economics, and Nicholas Turner, an employee of the Office of Tax Analysis at the U.S. Department of the Treasury, collected information from the U.S. Department of Education and the Internal Revenue Service on 1.4 million students who enrolled at for-profit institutions between 2006 and 2008, according to the article. They found that these students experienced lower earnings relative to their own earnings before enrolling.
“The most compelling result in our study is that, on average, students in certificate programs in for-profit institutions have lower earnings than demographically similar students in public community colleges, who pay a lot less for their education,” Cellini said in an email. “On average, for-profit students experienced declines in earnings after attendance while public sector students experienced earnings gains.”
Cellini added that she became interested in studying the for-profit college sector in graduate school when she saw late-night commercials that promised graduates flexible scheduling and high earnings.
“No one was studying these schools at the time, and I wondered if their claims could be true,” she said in an email. “Back then, there were very little data on these institutions, so it is really exciting to finally be able to look at student outcomes in this sector with a large, representative data set.”
Cellini said they found their results by calculating the difference between students’ annual earnings five to six years before enrollment and their earnings five to six years after attendance. She said this approach helped control some of the students’ unobservable characteristics, like their natural abilities.
“We then compared this after-before difference for students in for-profit certificate programs to the difference for similar public sector students to net out the effects of the Great Recession and other common experiences of students in the years we study,” Cellini said in the email.
The effects of the economic downturn in 2008, which occurred around the same time the study was conducted, is not the only potential issue the researchers point out: Students at for-profit colleges often leave the programs before they complete their degrees, according to Inside Higher Ed.
Cellini said that the results of her research are not very “encouraging” for the for-profit sector and may prompt changes within those institutions.
“We need to take a careful look at the schools in the sector and consider additional regulation for poor-performing institutions,” Cellini said in an email. “We also need to make sure students have adequate information about their future earnings and the debt they may incur if they attend one of these institutions.”
