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For-Profit Colleges vs. Community Colleges

Neal McCluskey

If there’s been a villain in higher education over the
past several years, it’s been
for-profit colleges
. Money-grubbing rip-off artists, they are!
their antithesis
, at least conceptually, has been community
colleges—cute, low-cost, community-based institutions. Yet
according to the headline for a piece by New America’s Kevin
Carey, the
latter have been “underappreciated.”
Is this

The basis for Carey’s hailing of community colleges is new
federal reporting that improves on the old standard of tracking
whether full-time, first-time students completed their program in
the school where they started within 150 percent of expected time.
The new
tracks students for eight years and includes data on
completion and transfers.

Using the full-time, first-time standard for students who
started at community colleges in 2013, only 25.4 percent had
completed within 150 percent (3 years for a full associate’s
degree, shorter for certificates) of the time they should have.
Meanwhile, 61.2 percent of students at 2-year for-profit schools
had completed, making community colleges look atrocious, and
for-profits just crummy.

Neither community
colleges nor for-profit schools are, on the whole, producing very
good outcomes.

Looking at cohort year 2008 and incorporating transfers puts a
better gloss on community college outcomes. Only 26.6 percent of
students who started at community colleges had completed within 8
years—not good. But one-third eventually enrolled at a
different institution, and 2 percent were still at their original
school. So about 62 percent were done or had transferred.

How does this compare to two-year for-profits? About 65 percent
completed—much higher than at community colleges. But only
3.9 percent transferred. And for-profit students were far more
likely to be enrolled in shorter certificate programs than longer
associate’s degree programs than were community college

Carey notes that a far larger share of for-profit students are
in four-year programs than two-year, and four-year for-profits have
“much lower graduation rates than those of comparable public
institutions.” Four-year publics do seem to perform better:
Only 32.3 percent of for-profit students in four-year programs had
completed their programs within eight years, versus 56.4 percent of
students in public four-year institutions. (Of course, neither rate
is very impressive.) Include transfers and continued enrollment at
starting institutions, and public four-year colleges could have a
persistence rate as high as 79.2 percent, versus only 40.2 percent
for for-profit institutions.

But here’s the thing: For-profits work with students
with much greater challenges.

Students at four-year for-profit schools are significantly
older—less “traditional”—than at 4-year
publics, with mean ages of 31.7 versus 23.9 years. Student ages are
comparable at public and for-profit two-year schools, with a mean
of about 27.

For-profit students are much more likely to be from underserved
minority groups. About 55 percent of students in less-than-two-year
for-profit programs are black or Hispanic, as are 46 percent of
students in two-year for-profits. At community colleges, only 35
percent of students come from these groups. At four-year schools,
41 percent of for-profit students are from these groups, versus
only 27 percent at public colleges.

For-profit students are much more likely to have dependents. In
less-than-two-year for-profit programs, 46 percent of students have
dependents, as do 42 percent of students in two-year for-profit
schools. Only 32 percent of community college students do. About 56
percent of students at four-year for-profits have dependents,
versus only 16 percent at public four-year colleges.

Finally, for-profit students are far more likely to have poorly
educated parents. In less-than-two-year and two-year for-profits,
50 percent of students’ parents maxed out at a high school diploma
or less. At community colleges, only 38 percent of students’
parents had such limited education. At four-year for-profit
schools, 49 percent of students have parents whose education topped
out no higher than high school. Only 26 percent of public four-year
college students were the same.

What does all this suggest? Neither community colleges nor
for-profit schools are, on the whole, producing very good outcomes,
but before making any pronouncements about who is sufficiently
appreciated, a lot of context is necessary. And considering the


taxpayer subsidies
to the entire Ivory Tower, maybe no parts of
higher education deserve much appreciation.

is a contributor to the Washington Examiner’s Beltway
Confidential blog. He is the director of the Cato Institute’s
Center for Educational Freedom and maintains Cato’s Public
Schooling Battle Map.