New York’s for-profit colleges leave students with huge debt and have little impact on earning potential, according to a new report published by The Century Foundation.
The foundation, a New York City-based public policy think tank, compared student outcomes at 427 colleges and universities, including 112 public, 196 nonprofit and 119 for-profit institutions.
The report, “Grading New York’s Colleges,” argues that for-profit schools display a pattern of failing to meaningfully serve their students, especially African-Americans and first-generation students.
Many for-profit schools show high default rates on student loans. For example, 47 percent of for-profit school students default on their federal student loans within 12 years. By contrast, 11 percent at public institutions and 10 percent at nonprofit colleges default. The report further notes that 72 percent of African-American students at for-profit colleges default versus a 25-percent default rate among Black students at public and nonprofit institutions.
The report’s author, foundation fellow Yan Cao, said having data that stretches across 12-years provides fresh perspective. The data comes from a longitudinal survey by the National Center for Education Statistics (NCES). Some previous data measured only students who graduated. Other data measured students who took loans, which didn’t give an accurate comparison to students at community colleges, many of who had Pell Grants and did not take loans.
“Students starting at for-profit schools are defaulting at 47 percent,” said Cao, “which is such a devastating financial situation for anyone who experiences it. A lot of the data that was looked at before was three-year default data.”
Three-years of data, she noted, doesn’t paint an accurate picture because students can defer or request an economic forbearance on loan payments for three years.
