Graduates of for-profit colleges like University of Phoenix are less likely to get a job than their traditional school counterparts. And even if they get a job, they don’t make as much money.The industry is booming despite public reservations about the institutions’ effectiveness, according to a study by Kevin Lang and Russel Weinstein at Boston University. They say that students gain nothing from going to a for-profit institution:
There are large, statistically significant, positive effects of obtaining certificates/degrees from a public or not-for-profit institution among those starting in associates degree programs. We find no evidence that students gain from obtaining any certificate or degree from a for-profit institution.
And because students at these colleges don’t make enough to support themselves, they’re much more likely to default on loans:
Students at for-profits account for nearly half of all student loan defaults but only about 12 per cent of post- secondary students. Between 2000 and 2010, the private sector share of federal student aid money grew from $4.6 billion to more than $26 billion, about one quarter of all federal student grants and loans.
The study adds fuel to the fire started by the U.S. Department of Education. They said that if the colleges want federal funds, they’ll have to prove they help students get jobs.
Here’s a graph showing how the earning power of for-profit graduates is less than that of traditional students:
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