Grads of For-Profit Schools Spent More, Got Less, Study Says

Photo courtesy of https://www.flickr.com/photos/fleshmanpix/
Photo courtesy of https://www.flickr.com/photos/fleshmanpix/

A recent study says that many students who attended for-profit colleges were worse off financially than they were before going to these schools.

Students who attended for-profit private colleges in the United States to learn a trade made less money than before they enrolled. Also, the report by the National Bureau of Economic Research found there were lower pay benefits and higher debt for people attending private, for-profit schools, compared to public colleges in all 50 U.S. states.

On average, people who attended for-profit colleges made $920 less per year after they left school compared to before they started.

On the contrary, people who attended public two-year colleges earned about $1,500 more per year than they did before starting their studies, the report said.

Besides lower earning, debt was another issue for students at for-profit colleges. About nine out of 10 students borrowed money to attend for-profit colleges. The average debt for people attending two-year for-profit colleges was $8,000, according to the report.

The report looked at schools preparing students for a number of trades, including health-care assistant, dental assistant, auto mechanic and cosmetologist, or someone who cuts and styles hair.

Only cosmetology programs appear to bring better pay in the for-profit sector, the report said.

More detail on choosing

 the right school can be

 found in this report.

The study also determined that students at for-profit colleges paid more for their classes than students at public colleges. Annual tuition at two-year profit-making schools averaged $8,118, compared to $712 at public community colleges, the report said.

One reason for the difference in cost is that for-profit schools are run by private businesses. In comparison, community colleges are run by local and state governments, which keep tuition down by providing direct funding.

The study’s authors pointed out that the study was conducted during the U.S. economic downturn in 2008, when unemployment in the United States was rising.

And when they adjusted the data to count only people who completed their for-profit college certificate programs, earnings increased.

However, about 40 percent of for-profit students left school before completing their certification programs, according to the report.

The report’s authors said their study shows how important it is for parents and students to research when choosing a college.

That research should include: Comparing the cost of different colleges and schools; the kinds of jobs and pay students can expect after attending the schools; how much debt a student is likely to accrue to pay tuition and other costs.

Their report comes as President Barack Obama’s administration is trying to change some for-profit colleges’ business practices. Last month, for-profit company ITT shut its doors to 40,000 students. It lost its accreditation and is under investigation by the U.S. government.

The association representing for-profit colleges said the study was not conducted well.

Do your research

The study’s authors provided some qualifications for their study.

They pointed out that the students they studied left school during the big U.S. economic downturn in 2008, when unemployment in the United States was rising.

And when they adjusted the data to count only people who completed their for-profit college certificate programs, earnings increased. However, about 40 percent of for-profit students leave school before completing their certification programs, according to the report.

Even given these qualifications, the report’s authors said their study shows how important it is for parents and students to do research before choosing a college.

That research should include: Comparing the cost of different colleges and schools; the kinds of jobs and pay students can expect after attending the schools; how much debt a student is likely to accrue to pay tuition and other costs.

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