The elephant in higher education

There’s a folk tale, variously attributed to India, China and Africa, about blind men describing an elephant. One feels the trunk and says the animal is like a snake. Another feels the leg, and describes the elephant as like a tree. And so on. The varying emphases of recent articles about for-profit higher education reminded me of that story.

MPR reported that For-profit college grads perform as well as public university peers, while the Star Tribune headlined that Graduates of for-profits have more debt. Both articles (and a few others) were about an April 24 report from the Minnesota Office of Higher Education, For-Profit Postsecondary Institutions: A Review of Selected Institutions in Minnesota for Undergraduates. The articles left me with unanswered questions. For a start, how many students graduate? And what happens to those who don’t graduate?

I decided to look for the answers in the report itself, which looks at students, money and success along several different dimensions. Here’s some of what it tells us, as well as some of the questions that remain.

First of all, our for-profit universities are above-average, just as you’d expect from their proximity to Lake Wobegon. In particular, Capella University, Rasmussen College and Walden University are cited as above average for their student services and retention rates, when compared to for-profits nationwide.

Who are the schools?

We have a lot of private, for-profit schools. Most of their graduates — 82 percent — receive associate or other non-four-year degrees.

“Currently the [Minnesota] Office [of Higher Education] licenses 130 private and out-of-state public postsecondary educational institutions offering programs below the associate degree; 110 are for-profit institutions with campuses in Minnesota. The Office also regulates 166 private and out-of-state public postsecondary educational institutions offering associate degrees or higher; 27 are for-profit institutions with campuses in Minnesota.”

In Minnesota, for-profits enroll 15 percent of all post-secondary students (page 3 of the report) or 18 percent of all post-secondary students (page 15 of report.)

Who are the students?

Older For-profits enroll older-than-average students. Some 64 percent of all post-secondary students in Minnesota are 23 or younger. For-profits have only 33 percent in this traditional college age bracket, with 67 percent of students at for-profits reported as 24 years or older.

More women The gender of students at all MN post-secondary institutions is 59 percent women. Students at for-profits are 70 percent female.

Race There’s almost no difference in race between overall MN enrollment and for-profit enrollment. (Nationally, for-profits enroll a higher percentage of Black and Hispanic students, but that’s just not the case in Minnesota.)

Wealth Students at the University of Minnesota come from families with the highest median income ($78,600) and students at public two-year institutions have the lowest median family income ($31,000.)  Students at private for-profits also have a low family median income ($39,600.) They are also much more likely to be independent rather than dependent students.

Financial Aid Students at for-profit two-year and four-year schools received federal aid at almost twice the rate of students at state universities or private not-for-profit colleges and universities, and more than twice the rate of students at the University of Minnesota.  They also borrowed at much higher rates than students at other institutions, and took out larger loans.

Measuring success

Employment The employment numbers for for-profit schools are good — but it’s not entirely clear what that means. The study looked at the 2011 employment numbers for students who graduated in 2009. Public community and technical colleges had the highest employment rate for graduates, at 80 percent, followed very closely by the for-profits at 78.9 percent. The lowest employment rate was for grads of private graduate and professional schools — 67.3 percent — and graduates of the University of Minnesota — 69.3 percent.

The employment figures leave out “graduates employed at federal agencies, enlisted in military service, self-employed or employed out of state” and any who are attending graduate school.

I found the explanation in the body of the report unclear, but the executive summary said:

“Graduates from both state colleges and for-profit institutions are employed in Minnesota one year after graduation at higher rates than graduates from public universities and private not-for-profit colleges who are more likely to seek employment out-of-state or enroll in graduate school.”

Questions One big unanswered question is what the graduation rates of the different types of schools are. The study gives some examples of for-profit schools, but not an overall graduation or dropout rate for any set of institutions.

The employment rate is measured only for graduates. If most students drop out before graduation, what does that say about a school’s success or failure?

The University of Phoenix has the lowest graduation rate of any individual school profiled in the report — 7 percent. If all of its graduates are employed, does that make it a successful institution?

Debt The average debt for two-year and four-year graduates of for-profits was far higher than the average debt of graduates from any other institutions.

Not only was the average individual debt higher, but far more graduates of for-profit institutions had student loan debt — 89 percent of graduates with four-year degrees and 91 percent of those with two-year degrees.

Questions While the student-loan debt rates for graduates are important, what about the students who don’t graduate? What are their average student loan debts? And how many students are left with no degree and large debts?

So what does the elephant look like? That’s still not entirely clear, but there are some bullet points to take away from the report:

  • Public colleges and universities have slightly better employment rates for their graduates and are the lowest-cost option.
  • Students who graduate from for-profit schools find jobs.
  • Graduation rates at for-profit schools vary from 7 percent to 89 percent, so prospective students should look very carefully at information about the specific institution they are considering.
  • Education at for-profit schools costs more — a lot more  — and leaves more students with a much higher average debt load.
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1 Comment

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One response to “The elephant in higher education

  1. Great summary. A couple of other factors to consider:
    • Because they’re typically older and may own homes and cars as well as having children and/or aging parents to care for, students at for-profit institutions (and not-for-profit two-year institutions) have more obligations to shoulder than students who attend four-year schools and who start younger. This in part explains the relatively high loan default rate of students who attend for-profit schools. As you note, students who attend but don’t graduate may be left with an unsustainable amount of debt—and no degree.
    • You wisely recommend that “prospective students should look very carefully at information about the specific institution they are considering.” I’ve found, though, that my students at a for-profit school reported doing very little, if any, comparison shopping—in fact, I found that many were unable to even explain the difference between a for-profit and a nonprofit institution. For-profit schools advertise heavily and reach students who may not have otherwise considered college. That’s great for students who succeed, not so great for students who don’t. How can the numbers of the latter group be reduced?

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