For-profit certificate earners would be better off not attending college at all, study finds
- Students earning vocational career and technical education certificates at public community colleges are faring better than for-profit students on nearly every economic measure, according to a forthcoming study from The Journal of Human Resources. In a Brookings piece, study co-author Stephanie Riegg Cellini, associate professor at George Washington University, summarized the findings and even found that if the choice came down to students gaining a certificate from a for-profit or not pursuing a certificate from a college at all, they may find higher returns skipping the enterprise.
- The study examined 14 years of earnings data for over 800,000 federally aided certificate seekers, assessing factors like employment and earnings. Researchers found that "on average, for-profit certificate students do not generate enough earnings gains to offset the debt they incur."
- Key takeaways include that for-profit students are 1.5 percentage points less likely to find employment after graduation than their community college counterparts, and their earnings are around 11% lower in about 75% of all fields. And for-profit certificate-holders earn less while their debt is around $5,000 higher than those students who earned similar degrees at public schools in about 92% of all fields.
Amid concerns the four-year liberal arts degree is failing to produce students prepared to enter the workforce, more education stakeholders are putting their money on career and technical training programs, as well as vocational education as the best way to fill the gap. President Trump, in fact, called for more focus on vocational programs in his State of the Union address, stating, "Let us open great vocational schools so our future workers can learn a craft and realize their full potential."
For-profit institutions have been under the scrutiny for several years now, spurring a growing trend of for-profits being acquired by traditional institutions. But there is also the question of whether certificates themselves hold as much value in the workforce as once believed, and insight from Burning Glass Technologies has found that alternative credentials may not actually suffice. After reviewing 16 million job openings over the course of a year which don't require professional licenses, only about 130,000 asked for a certificate. This, coupled with studies showing for-profit degrees may actually be less valuable than no college at all, shows that leaders in the industry may want to consider the true value of alternative credentials and for-profit models, like coding boot camps.
However, one major flaw of this study is that it compares outcomes of students who hold certificates from for-profit institutions to those who hold the same from community colleges. Perhaps a better comparison group for these institutions, though still not an apples-to-apples comparison, might be private non-profit colleges and universities. However not enough of these types of institutions have gotten into the credentialing market, which has inherently left the door open for for-profit providers to fill the gaps.
The reason Purdue-Kaplan was such a ground-breaking innovation in higher education when it was announced in 2017 was because it was the biggest deal to date seeking to thwart that trend. When it comes to offering effective CTE options, more institutions may want to consider brokering deals with for-profits that have already developed the administrative strengths and infrastructure backbone while leveraging the quality of content and depth of knowledge often housed at traditional institutions. Such deals allow for public institutions to dabble in new types of degree options, while minimizing the risks of innovating from scratch.
Autumn A. Arnett contributed to this piece.
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