For-Profit Colleges

A bid to show which colleges are worth the money reveals some surprises

Latest “gainful-employment” data show problems are not limited to for-profit schools

New figures from the federal government show that graduates of some private, for-profit colleges and universities make near- or below-poverty wages, in spite of their investments in a higher education.

No real surprise there; some of those schools are widely criticized for making promises they don’t keep, and a few have closed.

But the data also reveal that the graduates of nearly 1,000 programs at public, taxpayer-supported community colleges and some four-year universities are earning less than $14,500 a year.

The poverty rate for a single person in America is $12,082, according to the U.S. Census Bureau.

These newest figures, from the U.S. Department of Education, are part of a contentious Obama administration effort to determine whether graduates’ incomes justify the costs of academic and vocational programs; in cases where they don’t, students will no longer be able to use federal financial aid to pay for them.

Called the gainful employment rule, the regulation uses wage information from the Social Security Administration to calculate whether students’ debt was worth the payoff in earnings.

Graduates of 1,754 out of 4,140 programs at private, for-profit colleges and universities make less than $14,500 a year, the new report shows. That’s 42 percent of the programs reviewed.

But graduates of 945 out of 6,055 programs at public colleges and universities also have incomes under $14,500, or 16 percent.

A student who graduates from George C. Wallace Community College in Alabama as a medical or clinical assistant, for example, earns $11,253, or less than the poverty level, the Education Department reported.

Graduates who studied substance abuse and addiction counseling at Anne Arundel Community College in Maryland make $10,151; criminal justice at Southeastern Technical College in Georgia, $10,927; and childcare and support services management at the University of Arkansas at Monticello, $11,057. Nursing assistants who went to Eastern Mississippi Community College earn $10,531.

Students at the programs examined at public colleges and universities overall fare slightly better than their counterparts at for-profit ones, the data show; those with certificates in the same field of study earn about $2,700, or 13 percent, more.

Private, for-profit colleges unsuccessfully sued to stop the gainful-employment regulation from taking effect. The American Council on Education—the nation’s largest association of higher-education institutions, including public and private, nonprofit ones—has also lobbied for the program to be blocked.

The long-awaited debt-to-earnings calculations are scheduled to be released in January, when students in programs whose payoffs fail to justify their costs will lose eligibility for federal financial aid. Colleges and universities will also be required to disclose earnings information to prospective students.

Republicans in Congress, who have already tried to repeal the regulation, are expected to do it again, and at least one group is betting that the new president will agree: Wall Street investors, who bid up the value of long-sagging for-profit higher education stocks the day after he was elected.

But the spotlight on the issue of whether future income justifies going into debt for certain college majors could already be changing behavior. Several private organizations and some states have begun to separately provide income information for particular disciplines, by institution.

And even as the new Education Department information was released, the Council of Graduate Schools unveiled a new website that can calculate the likely debt and income for students receiving particular professional degrees.

This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Read more about higher education.

The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn't mean it's free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

Join us today.

Letters

Jon Marcus

Jon Marcus, higher-education editor, has written about higher education for the Washington Post, USA Today, Time, the Boston Globe, Washington Monthly, is North America higher-education… See Archive

Letters to the Editor

Send us your thoughts

At The Hechinger Report, we publish thoughtful letters from readers that contribute to the ongoing discussion about the education topics we cover. Please read our guidelines for more information.

By submitting your name, you grant us permission to publish it with your letter. We will never publish your email. You must fill out all fields to submit a letter.





No letters have been published at this time.