So we’ve got some new information about America’s for-profit colleges, and it’s not looking very good.
Proprietary colleges are now working to legally overturn the controversial Gainful Employment rules, which specify that in order to continue to receive federal funding America’s vocational schools must make sure that at least 35 percent of former students are paying down their loans, former students must not have to pay more than 30 percent of their discretionary income on loan payments, and former students must not spend more than 12 percent of their total income on loan payments.
In the last year for-profit colleges have argued that the Gainful Employment rules were unfairly punitive since their students started out poorer and faced significant financial problems outside of their student loan debt.
A new study, however, suggests that it isn’t really financially beneficial for people to attend for-profit schools at all.
Proprietary schools have got some complicated legal maneuvers going on to try address that pesky Gainful Employment problem (which I’ll explain later today) but ultimately what this comes down to is that for-profit schools just don’t want to abide by those, really pretty basic, consumer protections.
At the same time the study released Monday by the National Bureau of Economic Research indicates that, leaving entirely aside these questions about student debt, for profit colleges simply don’t help people get better jobs, which is their purpose. According to an article by Scott Jaschik at Inside Higher Ed:
[For] those who started in associate degree programs, the study found “large, statistically significant benefits from obtaining certificates/degrees from public and not-for-profit but not from for-profit institutions.” …
And for both certificate and associate programs at both for-profit and nonprofit institutions, the most popular field of study is health. “We observe a large and statistically significant return to earning a certificate in health from a public or not-for-profit institution,” the study says. “In contrast, the point estimate for earning such a certificate from a for-profit is close to zero.”
Right, zero. It’s just a waste of time and money. No payoff whatsoever.