REEVALUATING STUDENT OUTCOMES AT FOR-PROFIT COLLEGES IN THE UNITED STATES: A COMPARATIVE ANALYSIS WITHOUT AND WITH STUDENT CONTROLS

Abstract

For-profit colleges (“for-profits”) in the United States are higher education institutions that are operated by profit-seeking corporations. They have been criticized for their high costs, poor student outcomes, and unethical business practices, but also have been lauded for effectively preparing nontraditional, underprivileged students for the labor market. With new data from College Scorecard, this study evaluates how five student outcomes— mean income, completion, retention, repayment, and cohort default rate—differ between for-profits and non-profits without and with student controls. This study also presents and analyzes the distributions of school fixed effects on each of these outcomes by type of institution without and with student controls, with a focus on the difference between forprofits and non-profits. These analyses show mixed results: with student controls, forprofits do not improve in mean income and cohort default rate, but they do relatively improve with completion, retention, and repayments rates, though they are still the worst performing for retention rates relative to non-profits. Some of this evidence is substantiated by a robustness check with a different set of controls, but another robustness check suggests that the sample this study uses is biased. These results may be suggestive of policy in light of an ongoing debate of the regulation of for-profits.