Ways to Save Money

Why For-Profit Colleges Might Not Be Worth Your Time — or Money

Updated April 11, 2016
by Susan Shain
Contributor


Whether you’re a high-school junior eagerly anticipating college, or a busy mom who wants to go back to school, deciding which educational institution to attend is a big decision.

Not only do you want to find a program you’ll enjoy, but you also want to ensure the money you spend will have a good return on investment.

Though choosing a college is a highly personal choice, a recent infographic from Yellowbrick highlighted one stat everyone should take into account…

The top 10 colleges whose students owe the most — and, more specifically, the one quality seven of them shared.

The Schools Whose Students Incur the Most Debt

Here are seven of the 10 schools whose students owed the most in 2014: University of Phoenix, Walden University, DeVry University, Capella University, Strayer University, Kaplan University and Ashford University.

Notice a common thread?

They’re all for-profit schools.

Infographic from YellowBrickProgram.com

Infographic from YellowBrickProgram.com

Crazy, right? I was appalled to see University of Phoenix’s students alone owe $35.5 billion.

Here’s how that came to be.

The Shady Story of For-Profit Colleges

As the name implies, these schools are businesses, and so are more expensive than their nonprofit counterparts.

“​Tuition and fees at for-profit colleges averaged $15,130 in the 2013-2014 academic year,” reports U.S. News.

“That’s compared with $3,264 at two-year public colleges for in-state students and $8,893 at four-year public colleges for in-staters.”

The higher cost might be palatable if students got a solid return on their investment… but they don’t. Instead, they spend more money and take out more loans — and end up unable to pay them back.

“Students at for-profit colleges represent only about 13% of the total higher education population, but about 31% of all student loans and nearly half of all loan defaults,” the U.S. Department of Education reports.

Nearly half of all defaults? What?!

It might be due to the population these schools target through deceptive marketing campaigns, and because it’s harder to get a job with a degree from a for-profit school.

“Attendees of for-profit colleges are likely to be older and have lower incomes,” The Atlantic reports in an article aptly titled “The Empty Promises of For-Profit Colleges.”

“These students are less likely to complete their degrees, have a higher risk of living in poverty, and have difficulty finding jobs after school.”

“Applicants with business bachelor’s degrees from large online for-profit institutions are about 22% less likely to hear back from employers than applicants with similar degrees from nonselective public schools,” adds U.S. News.

The situation is so dire that some schools have been taken to court for false promises. Corinthian Colleges and Vatterott College lost cases brought against them.

So if you’ve been considering attending a for-profit college, I hope these numbers urge you to take a deeper look.

I’m not saying it’s impossible to find success with a degree from a for-profit school, but I am saying it’s imperative to do thorough research.

Before thinking you don’t have another choice, look into scholarships and financial aid; alternative schools; community, free or best value colleges; apprenticeships; and online programs through nonprofit universities.

Or check out these fast-growing and high-paying jobs that don’t require a college degree.

Because education is priceless, but college isn’t always worth the cost — especially at a for-profit school.

Your Turn: Would you — or did you — attend a for-profit school? We’d love to hear about your experience!

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

by Susan Shain
Contributor for The Penny Hoarder

Share Your Thoughts

Top Articles