5 Things Students Must Consider Before Attending a For-Profit College
Did you know that enrollment at for-profit colleges has increased by an explosive 225% in last 10 years? Recent policies regulating for-profit education have been halted and will likely be re-written. Including a federal student loan forgiveness program for students whose schools misled them.
For-profit colleges aim to attract non-traditional — including those in poverty trying to overcome their circumstances — students who may feel like a traditional college or university is out of reach. They can offer more flexible class options for working adults, accelerated graduation times, and online degrees – but at what cost?
For-profit colleges are expected to earn money – unlike most public universities and community colleges. For-profit colleges aren’t all inherently bad, but are likely to lead to poorer outcomes for students. Being aware and researching all available options can help students make the right decision for their future!
1. Students will probably pay more for a for-profit educationOn average, it’s cheaper to attend an in-state public university or community college than a for-profit college. According to the National Center for Education Statistics, the current average cost of attendance is:
- Public two-year colleges cost $3,941 vs. $14,864 for a for-profit two-year college
- Public four-year colleges cost $8,141 per year vs. $16,066 for a for-profit four-year college
2. Students at for-profit colleges are more likely to have student debt and have more of itIn 2016, 96% of students at for-profit colleges borrowed student loans, compared to 49% of overall students, according to the National Center for Education Statistics. And on average, students at for-profit colleges carry a median debt of $32,700, while the overall student borrowed $20,000.
3. For-profit college students are less likely to graduateDepartment of Education data shows that the graduation rate for students at for-profit colleges was 26% in 2015, while the graduation rate for all students at public and private colleges was 66%.
4. Students are more likely to receive a private loan for a for-profit collegeAlways ask if the student loans you are signing off on are private or federal, whether attending a for-profit or private/public college. Private loans are funded through private companies that give you no flexibility on how to pay them back, and can take legal action if you don’t pay them. Federal loans are government funded. They have a myriad of income based repayment options to choose from- as well as forbearance, deferment and loan forgiveness programs for certain career paths.
5. There Higher default rates on loans for for-profit colleges“47% of students that have defaulted on their loans attended for-profit colleges. In comparison, 7.5% of students at non-profit private colleges default within three years of entering repayment and 11% of students from public schools default.” – US Department of Education
Bottom line: Before attending any school, take the time to research the ins and outs of college costs and the intricacies of student loans. They can be very confusing, and because of this many will make quick decisions that may not be the best for their future.
PRO TIP 1: Not sure if a school is a for-profit institution? Look it up using the National Center for Education Statistics College Navigator tool. It also will give you information about the school’s retention rates, accreditation, financial aid, and student-loan default rates.
PRO TIP 2: Always calculate what your student loan payments will be after graduation before you take out the loan! Visit these websites to access resources and find answers to your student loan questions: Federal Student Aid & NerdWallet
This article was written by professional development coaches at Cincinnati Works. They want to help those in poverty pursue their career and education goals. Click for more info.