In their television ads, for-profit colleges promise to deliver credentials that will jump-start students’ careers. The people lured in by that marketing end up deeper in debt than community college students but fare no better with hiring managers, according to a new study. In fact, for-profit graduates don’t even gain a job hunting advantage over applicants with no college experience at all.
The study results are based on a simple experiment that the authors believe is the first of its kind performed on for-profit schools. Researchers sent nearly 9,000 fake resumes in response to job postings in six different categories of work and compared the response rates their fake applicants got to see if a for-profit college degree would be worth more in the job market than an equivalent community college certification. Some of the fictional resumes listed no education beyond high school in order to evaluate the claim from for-profit supporters that the industry “draws some students into postsecondary schooling who otherwise would not have attended college at all” and should therefore be viewed as a useful bridge to economic mobility.
The experiment produced no evidence that for-profit degrees help job applicants relative to community college degrees. Fake resumes with community college listed got callbacks slightly more often than than those with for-profit degrees, but the difference was too small to conclude that a for-profit degree is outright damaging to a person’s job hunt. For-profit resumes got a response 11.3 percent of the time and an interview request 4.7 percent of the time, compared to 11.6 percent and 5.3 percent respectively for community college degrees.
“We also find little evidence of a benefit to listing a for-profit college relative to no college at all,” the authors write. That means that someone who spent $35,000 on a two-year associates degree — the average cost for-profit schools charge — has the same odds of getting a call back from a job they wanted as someone who spent zero dollars on college. (The same 2012 report on for-profit costs found that the equivalent community college degree would cost $8,300 on average, and the trade association for for-profit schools did not challenge those numbers.)
The new findings add to an already-large pile of evidence that for-profit education is a terrible investment relative to the alternatives. A 2011 study found that for-profit students make between $1,800 and $2,000 less per year than they would have attending a different kind of school. The median debt burden for for-profit graduates is almost $13,000 higher than for public school graduates. Roughly six in 10 for-profit students take out loans, compared to just 13 percent of community college students.
The schools also spend about a billion dollars more per year on recruiting than on educating those they recruit. The parent company of the University of Phoenix paid a $78 million settlement in 2009 after a whistleblower showed that the school linked recruiter pay to the number of students each employee enrolled.
For-profit schools may fail to deliver on their promises to students, but they keep faith with their executives. For-profit CEOs get paid 26 times more than top officers at traditional colleges and their compensation is determined by corporate profits rather than student achievement or graduate success rates. The money those executives extract from the system is ultimately coming from taxpayers, as the industry gets 90 percent of its revenues from government student lending. In some cases these same schools go to great lengths to keep their profit mills grinding. Corinthian Colleges, which is going out of business after the Department of Education (DOE) restricted its access to federal aid money because the company wouldn’t cooperate with investigations, went so far as to bribe local businesses to hire graduates for short-term make-work jobs so that the school could goose its graduate employment statistics.
The Department of Education (DOE) is trying to put a stop to for-profit schools that fleece taxpayers and graduates alike by linking federal loan dollars to new metrics of college performance like the employment rate of a school’s graduates. The industry has responded by fighting the new rules, spending $35 million since 2010 to lobby Congress to help them continue to avoid meaningful federal oversight. One of the industry’s best friends in Washington is Rep. Virginia Foxx (R-NC), who not only decries proposed regulation of for-profits but compares the DOE effort to the Holocaust. Foxx has taken $152,000 from for-profit schools over the course of her elected career, good for seventh-most in the House.