For-Profit College Students Face Higher Debt, More Unemployment, Report Finds

Ann McClure's picture
Thursday, January 5, 2012

Students attending for-profit colleges wind up with much higher student-loan debts, are less likely to be employed after graduation and generally earn less than similar students at public or private nonprofit schools, according to a recent paper from the National Bureau of Economic Research.

The study, conducted by a group of Harvard researchers, examines a bevy of federal data tracking student graduation rates, federal loan repayment rates and student success in securing jobs. The researchers ask one central question: Are for-profit colleges "nimble critters" responding to higher demand for college degrees, or "agile predators" that target low-income students with the intent of reaping profits through federal student aid dollars?

For-profit colleges have been conspicuous beneficiaries of the Great Recession, with tens of thousands of unemployed Americans seeking college education just as government funding for public higher education has contracted. But the last two years have brought unprecedented scrutiny to the industry, amid evidence of controversial recruiting tactics and disproportionate levels of federal student loan defaults.

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