Commonly used college quality measures, such as graduation rates and loan defaults, are inadequate and sometimes misleading, writes Ben Miller, a senior policy analyst for the New America Foundation, on EdCentral.
Completion statistics for community colleges and other two-year-or-less institutions are especially inaccurate, he writes. It’s not just that the federal data misses part-timers and transfers. Completion data also confuses success rates in short-term certificate programs with longer-term associate degrees.
. . . many certificate programs run for no more than a year. These programs thus present fewer opportunities for students to drop out. That’s why colleges that predominantly grant certificates tend to have quite high completion rates and also the reason that for-profit institutions often appear to have better graduation rates than the largely associate-degree-granting community colleges.
A low completion rate is a sign of low quality, but a high completion rate may signify a quick, easy program with very little return on students’ time and money.
Cohort default rates also can be misleading, especially for community colleges with very few borrowers, writes Miller.
For example, Gadsden State Community College in Alabama has a 20 percent default rate but that’s based on five borrowers out of an enrollment of over 8,967. This makes it impossible to draw any conclusions about a college based upon less than 0.05 percent of the college.
On the other side, a low cohort default rate might be just as much an indication of successful loan management than success. The cohort default rate only measures whether students default within a certain time window. Students who default after that period or who are extremely delinquent but never default are not counted in the rate. The usage of income-based payment plans can also distort cohort default rates, since a borrower could be earning such a low income from their program that they have to make little to no payments, making it more difficult to default.
Passage rates on licensure or certification exams, such as in nursing, do measure learning outcomes. However some programs — especially in teaching — ensure a 100 percent pass rate by denying diplomas to students who haven’t passed the exam.
Every year, $15 billion goes to “college dropout factories” and “diploma mills,” according to Tough Love, a new Education Trust report. These are four-year colleges and universities in the bottom 5 percent nationally in graduation rates and student loan repayment rates. In addition, some institutions — including some state universities — admit few low- and moderate-income students eligible for Pell Grants. Tough Love proposes linking federal aid, tax benefits and charitable deductions to minimum standards for access and success:
Pell, full-time freshman enrollment: 17 percent
Six-year, full-time freshman graduation rate: 15 percent
Student loan repayment rate (three-year cohort default rate: 28 percent)
Colleges would have three to four years to meet the standards, the report proposes.
“The federal government writes a $180 billion check annually to thousands of colleges and universities using taxpayer dollars to fund schools from the highest performing to the lowest, with virtually no consideration of institutional performance on access, success, or student loan repayment measures,” said Michael Dannenberg, director of higher education and education finance policy and a co-author of the report. “Schools falling beneath the bottom fifth percentile on these measures represent the ‘worst of the worst,’” said Mary Nguyen Barry, higher education policy analyst and co-author. “Establishing goals without consequences . . . won’t protect students from a lifetime of mounds of debt, a meaningless degree, or no degree at all.”
Many for-profit colleges enroll a high percentage of low-income, non-white and adult students. They tend to have low graduation rates and high default rates. However, also in the bottom 5 percent are a number of historically black colleges as well as “minority-serving” institutions with heavy Latino and Native American enrollments. Linking aid to student success would be politically difficult.
Elite universities and private colleges that can’t afford much financial aid tend to admit few Pell-eligible students. These “engines of inequality” have a lot of political clout too.
For-profit colleges charge $35,000 for an associate degree, on average, more than four times the cost at the average community college, writes Ashlee Kieler in the Consumerist. Why does anyone go to a for-profit college? Flexibility and convenience draw many students, she writes. And for-profit colleges spend heavily on marketing.
In 2000, for-profit colleges enrolled 3 percent of postsecondary students. By 2009, that had soared to 9 percent, reports College Board. Community colleges’ share dropped from 43 percent to 40 percent.
For-profit college students see a more convenient and flexible learning experience, according to a report from Stanford’s National Center For Postsecondary Improvement. “Freed from the traditional academic schedules and even from many of the fixed costs of infrastructure and expensive facilities, the [school] is able to offer courses at more convenient times and in more convenient locations.”
For-profit colleges were leaders in offering online and evening courses to students with jobs and family responsibilities.
For-profit colleges also tend to have names that sound more like a traditional university — some even have “university” in their names — which has a certain aspirational appeal to it. The phrase, “I went to Heald College” may have a better ring to it than “I went to Bucks County Community College,” even if the student got the same or better education at the school with the clunkier name.
For-profit colleges rarely make students take remedial courses before taking courses than count for a credential. Instead, basic skills instruction is integrated into for-credit courses. That’s a policy some community colleges are trying.
Like community colleges, the for-profit sector enrolls many students who are 25 to 40 years old. However, for-profit college students are much more likely to be living in poverty, reports the Institute for Higher Education Policy. They use federal grants and loans to pay for college.
“Only 35 percent of community college students take out loans to pay for school,” says Suzanne Martindale, staff attorney at Consumers Union. By contrast, “86 percent of for-profit college students take out loans.”
However, Kieler doesn’t mention another reason students may choose a for-profit college. On average, two-year for-profit colleges, which focus on job training, have much higher completion rates than community colleges, which have academic and job training missions. For-profit vocational programs are very structured. Some community colleges are adding structured pathways to improve completion rates.
Less than 40 percent of students who start at a two-year public college will complete a degree in six years, reports Pew Research Center. The completion rate is 62.4 percent for students who start at a two-year for-profit institution.
Two-year colleges are enrolling fewer students but granting more associate degrees, according to the U.S. Department of Education’s annual Condition of Education report.
Enrollment — about 7.2 million in 2012 — declined by 7 percent from 2010 after steady growth since 1990. The number of associate degrees increased by 8 percent from 2010-11 to 2011-12.
The Gainful Employment Rule Is Coming For Everyone, warns Edububble. For now, the for-profit colleges are being forced to “generate a real return for their students,” but it won’t stop there, he writes.
Once the world starts getting the bill for Income-Based Repayment, this will be the only choice for the Republic. Come after the source of the pain and that means all of those twits studying cross-disciplinary BioTheater and other overpriced courses like English or even Bio.
. . . There are too many defaults and the government is just going to have to shut down the free money fountain.
The gainful-employment rule applies to career programs at public and private nonprofit colleges, as well as to for-profits. If too many students in a career program default on loans or run up a high level of debt relative to their earnings, that program’s students would lose access to federal student aid. Community colleges, which have a rising number of borrowers and high default rates, are plenty worried about it already.
The U.S. Education Department’s revised proposal is “flawed, arbitrary, and biased,” and will shut millions of students out of college, contends the Association of Private Sector Colleges and Universities, which represents the for-profit sector, reports the Chronicle of Higher Education.
A 100-age report by economists at Charles River Associates, funded by the for-profit trade group, attacked the regulations for using the level of students’ earnings rather than their earnings gains to measure a program’s effectiveness.
While the Education Department estimates 31 percent of students would be affected, potentially losing access to student aid, the report predicts as many as 44 percent would be enrolled in programs that fail the federal test.
Coupled with income-based repayment, the proposed rules would protect programs whose graduates have very low earnings, writes Ben Miller on EdCentral. “Allowing programs to pass solely based on the annual debt-to-earnings measure makes it possible for a program with sub-poverty wages to still avoid failing the metrics.”
Community colleges should look at “what makes for-profits successful” in order to compete for students, writes Matt Reed, who worked in the for-profit sector before going to a community college.
To start with, for-profit colleges make it easy to apply.
As Tressie McMillan Cottom has pointed out, to a student who’s really up against it economically, a twenty thousand dollar student loan due years in the future might as well be monopoly money, but a fifty dollar application fee is a real barrier. Admissions counselors in for-profits will go out of their way to track down transcripts, for example, to give expedited decisions on transfer credits, which tend to be generous. (They understand the concept of a “loss leader.”)
They provide concierge-level service in areas like financial aid and admissions.
When he worked at DeVry, the campus had 15 to 20 admissions staffers for 4,000 students. When he went to a community college, it had double the enrollment, with less than half the admissions staff.
For-profit colleges do little or no remediation before letting students start a program. They work to keep students in the program. “It’s much cheaper to retain a customer than to attract a new one.”
Community colleges also can learn from Southern New Hampshire University’s non-profit College for America, which will now offer bachelor’s degrees, Reed writes. College for America works with large employers to become the in-house higher education option for their workers. “It has a narrow range of majors, a low upfront cost, a built-in support system, and regional accreditation.” Using a competency model keeps costs down.
More than half of veterans using the GI Bill complete a certificate or degree in 10 years, according to the Million Records Project by Student Veterans of America. The report has a number of blind spots, writes Clare McCann on Ed Central.
The Million Records report isn’t comparable to other Education Department data because it gives students more time to complete a credential and includes job certificates.
Recent veterans, who are more likely to have served in combat, aren’t distinguished from older veterans, writes McCann. “It’s not clear from the SVA report how the added obstacles that more recent veterans may face are affecting student veterans’ academic progress.”
The data on for-profit colleges may be misleading, because National Student Clearinghouse, which provided much of the information, doesn’t include all for-profit colleges. The clearinghouse “will not publish data at the institutional level, especially if that information might make particular schools look bad – like veterans’ graduation rates by institution.”
A national student unit record system as proposed in College Blackout could make better use of the data scattered across institutions and the government” and help veterans succeed in higher education, McCann concludes.
Some career-focused students choose a for-profit college over a much cheaper community college, writes Sophie Quinton on National Journal.
In Virginia Beach, 27-year-old Darius Mitchell was “really tired of making $9 an hour.” After years working retail jobs, he consolidated previous student loans and took out more to enroll at ECPI University. He’ll graduate in May with an associate degree in network security and a job at Canon Information Technology Services.
At about $14,000 a year, tuition at ECPI is more than triple that of an in-state student at nearby Tidewater Community College. But low-income students are willing to cough up the money because programs are shorter, graduation rates are higher, and 85 percent of students move into jobs in their field of study — usually health care or technology — soon after graduation.
. . . Students are drawn here because, unlike at a community college, they can start classes every five weeks and attend on nights and weekends. Course material is also accelerated, so an associate’s degree can take just a year and a half to complete and a bachelor’s can take two and a half. Students don’t have to load up on courses to meet broad requirements; they only take classes relevant to the credential they want.
ECPI also offers job placement help. The career-services team helped Matthew Bailey, 43, find a job in tech support for InMotion Hosting. He’s working on a software development degree.
ECPI’s graduation rate of 40 percent for first-time college students is twice the graduation rate at the local community college, notes Quinton. “In 2011, ECPI awarded more computer science associate’s degrees to African-Americans like Mitchell than all the public community colleges in Virginia combined.”
“Of the for-profit gainful employment programs that our department could analyze, and which could be affected by our actions today, the majority — the significant majority, 72 percent — produce graduates who on average earned less than high school dropouts.” So said Education Secretary Arne Duncan at a White House news conference on March 14. That earned two “Pinocchios” for lying from the Washington Post’s fact-checker.
Essentially, Duncan compares apples to oranges — with a few lemons thrown in — to make for-profit colleges look bad.
The Education Department estimates that high school dropouts average $24,492 year. The Labor Department puts the median annual wage at $18,580 to $22,860. A Census estimate is $20,241.
Then, Duncan compares employed dropouts’ earnings to all recent for-profit graduates. Comparing all dropouts to all for-profit graduates — or employed dropouts to employed graduates — would show a very different picture.
Comparing dropouts of all ages, including many with job experience, to less-experienced for-profit graduates also skews the results.
Duncan’s number looks at the number of programs that produce low-earning graduates, not at the number of graduates. “The Education Department does not have individual student data, so it could well be that most graduates do fine, especially from the larger programs,” reports the Post.
A third of community college programs’ graduates earn less than high school dropouts, by the Department’s measure, observes the Post. “Graduates of 57 percent of private institutions — a list that includes Harvard’s Dental School but also child-care training programs — earn less than high school dropouts.”
For-profit colleges enroll many low-income, minority and adult students, who are the least likely to succeed in college. Tuition is higher, since the for-profits aren’t subsidized by taxpayers. Students depend heavily on federal loans and default rates are high.
Community college students averaged $2,300 in tuition in 2009-10 compared to $15,000 for students at for-profit two-year colleges, according to one study. However, 62.4 percent of students at for-profit two-year colleges complete a credential in six years, compared to 39.9 percent of community college students, according to the National Student Clearinghouse.
The new “gainful employment” rules are “awful,” “unfair and discriminatory,” writes Richard Vedder on Minding the Campus. An Ohio University economist, Vedder directs the Center for College Affordability and Productivity.
The gainful employment rules apply to vocational programs at career colleges (primarily for-profit) and community colleges. If the goal is to stop wasting government money,”why not scrutinize students majoring in, for example, sociology, from Wayne State University?” asks Vedder. “Only 10 percent of students graduate in four years at Wayne State, and over twice as many default on loans as graduate in that time span.”
Moreover, while dropouts and loan defaults are high at many for-profits, when one corrects for the socioeconomic and academic characteristics of the students, the findings are decidedly more mixed. For example, the for-profits have roughly double the proportion of African-American students as do other institutions, and black students disproportionately come from low-income homes with high incidence of college attrition.
. . . I happen to disagree fundamentally with the “college for all” approach of the Obama Administration, but if you are going to pursue it, why attack the very providers who most aggressively are trying to help meet your goals? The for-profits disproportionately enroll poor first-generation students, and who are members of minorities. Moreover, accounted for properly (including state subsidies for public schools, taxes paid by for-profits, etc.), the for-profits use fewer of society’s resources per student.
The six-year completion rate for students at two-year for-profit colleges is 62.4 percent, the National Student Clearinghouse reports. At community colleges, which also enroll many disadvantaged students, the completion rate is 39.9 percent.
Finally, the “gainful employment” regulations say a borrower shouldn’t have to spend more than 12 percent of total income (20 to 30 percent of so-called discretionary income) to repay student loans. A person earning $35,000 a year with $4,800 annual loan repayments would not be considered gainfully employed. “If the individual in question went from a $20,000 job before going to school to a $35,000 job with a $4,800 loan commitment, that person has advanced considerably,” Vedder argues.
Repeal the Higher Education Act and “radically rethink federal provision of aid to students,” he concludes.
Students at a community college in rural Texas may lose all access to federal aid, including Pell Grants, because of a new regulation on defaults, reports Inside Higher Ed.