Students at Colorado’s four-year for-profit colleges have significantly worse outcomes than their peers at public and private nonprofit institutions on several key measures including the likelihood of completing a degree, the amount of loan debt owed and the prevalence of defaulting on their federal loans. For-profit schools include chains like DeVry University, the University of Phoenix and the Art Institutes. Students at Colorado’s public and private universities like the University of Colorado, Colorado State University and the University of Denver perform much better than their peers at for-profit colleges.
A new study from the Center for Responsible Lending (CRL) has found that:
- Students at Colorado’s four-year, for-profit colleges are far less likely to graduate with a degree. Completion rates average only 26 percent at four-year for-profit schools compared to 44 percent and 53 percent respectively at public and private four-year institutions.
- For-profit students leave school with substantially higher federal loan debt than their public and private peers: $32,452 compared to $21,345 and $24,726 respectively. Along with high debt, many leave without a degree reducing their chances of getting better-paying jobs.
- Three years after leaving college (with or without a degree), the average student loan default rate for students from Colorado’s four-year for-profit institutions is 14.7 percent – more than double the figures of 7.3 percent and 5.0 percent respectively for students from public and private institutions. Additionally, among students who attended for-profit colleges and have not defaulted on their loans, many have made no progress on their loan repayment. Only 52 percent have repaid even $1 compared to 67 percent and 66 percent respectively for students from public and private institutions.
Poor outcomes at for-profit schools are hitting low-income students and ethnic and racial minorities the hardest, the research shows. That’s because these students make up a greater percentage of the student body at for-profit schools. African American students represent 11 percent of for-profit enrollments in Colorado, compared to 5 percent and 7 percent respectively at public and private institutions. Similarly, 57 percent of for-profit students in Colorado are low-income, compared to 35 percent at public institutions and 43 percent at private colleges.
Student loan debt can burden students and families for years and limit their ability to get good jobs, climb out of poverty and join the middle class. These long-term effects that disproportionately harm low-income students and racial and ethnic minorities make the CRL findings especially significant. At the same time, the evidence is very strong that success in education and training programs serves as a key gateway to economic opportunity for both youth and working-age adults.
Given the variety of public, private, and for-profit postsecondary education options available in our state, it is vital that students and families have the transparent, comprehensive and comparable information they need regarding the likely academic and financial outcomes associated with these options as a foundation for their decision-making. The Bell Policy Center is working with a coalition of consumer and fair lending advocacy groups on legislation for the current session to make sure that families and students can easily get the facts they need so they can make wise decisions about institutions they want to attend. Stay tuned for updates.