Profiting Higher Education: What Students, Alumni and Employers Think About For-Profit Colleges

February 10, 2014

The for-profit higher education sector has attracted significant attention over the past few years—both from enthusiasts and from critics. For-profit colleges and universities have seen a steep increase in student enrollment. And they have become increasingly visible through their ubiquitous advertisements and proactive—some would say aggressive—recruitment strategies.

Supporters argue that the for-profit sector has been a source of innovation in higher education, including by being an early leader in the rapid expansion of online education. For-profit colleges have also been lauded for their ability to respond quickly to changing labor market demands and for using both teacher and student performance data to improve services and streamline curricula. Critics, however, hold that in too many instances for-profit schools lure students to enroll in comparatively expensive programs when these students could instead get a less expensive degree—and perhaps a better education—from a public institution. 

To better understand the firsthand experience of for-profit students, as well as the perspective of employers on for-profit higher education, Public Agenda, with support from The Kresge Foundation, conducted representative surveys of the following groups: 

  • Undergraduate students currently enrolled in certificate or degree programs at for-profit colleges, including less than two-year, two-year, and four-year programs
  • Alumni of for-profit colleges who have completed certificate and undergraduate degree programs since 2006 
  • Adults without degrees who are considering enrolling in college in the next 24 months to earn postsecondary credentials 
  • Human resources professionals (employers)

Main findings include:

  1. For-profit undergraduates aren’t comparative shoppers. Most considered only one school before enrolling.
  2. Adult prospective students who are considering for-profit colleges have some distinct expectations, priorities and needs. 
  3. For-profit undergraduates and alumni laud their schools on key quality indicators, but many worry about the cost—and ultimate value—of their education.
  4. Employers are either neutral on whether for-profit or public colleges provide a higher-quality education, or they give an edge to public institutions.
  1. For-profit undergraduates aren’t comparative shoppers. Most considered only one school before enrolling. Just about 4 in 10 undergraduate students at for-profit colleges say they seriously considered other schools before enrolling at their current institutions. Rarely do these students compare for-profit with not-for-profit institutions—for most it is either/or. In fact, the “for-profit college” concept is largely unknown among these students; most are unsure whether their schools are for-profit or not. Moreover, adult prospective students interested in for-profit schools are more likely than others to say they learned about colleges from advertisements.
  2. Adult prospective students who are considering for-profit colleges have some distinct expectations, priorities and needs. Among adults without degrees who are considering going back to school, those interested in enrolling at for-profit institutions are more likely than others to be drawn to schools that offer online classes, accelerated degrees, personal guidance from career counselors, financial aid advisers and tutors, and practical, work-related experience.
  3. For-profit undergraduates and alumni laud their schools on key quality indicators, but many worry about the cost—and ultimate value—of their education. Current for-profit undergraduates are generally highly satisfied with the quality of their instructors, tutors and advisers, as well as with the structure and efficiency of their programs. Alumni, too, praise their former schools on many measures. At the same time, both current students and graduates are concerned about the financial burden they have taken on. While current undergraduates remain optimistic that college will pay off in the form of better jobs and higher incomes, only a minority of for-profit alumni are certain their credentials were worth their cost.
  4. Either employers are neutral on whether for-profit or public colleges provide a higher-quality education, or they give an edge to public institutions. Employers know comparatively little about the for-profit colleges in their metropolitan areas, but they have favorable views of the for-profits they do know. When asked to compare for-profit colleges in general with public sector institutions on a range of quality indicators, about half of employers perceive few differences. The other half typically view public institutions as superior on a number of counts, including preparing students to work at their organizations.
  1. Why aren’t students considering a wider range of schools? How can they be helped to have a broader view of their options? More needs to be done to help future students understand the value of comparing different schools. Prospective students want and need better opportunities, online and in person, to engage with and evaluate quality indicators and other information about colleges and programs, including information on how different schools are governed and funded. This research also raises questions about whether more needs to be done to level the playing field of higher education marketing. Currently, for-profit institutions dominate the higher education advertisement arena. For prospective students to be exposed to a broader range of information and choices, not-for-profit schools may need to develop smart ways to communicate through advertising.
  2. Would for-profit undergraduates be equally as satisfied at public institutions where they might earn an equivalent degree but worry less about costs? Or are they better served at for-profit institutions? Adult prospective students who are interested in for-profits are particularly attracted to schools that offer accelerated degree programs, online classes and personal guidance from career counselors, financial aid advisers and tutors. For-profit undergraduates rate their schools highly in these and other quality measures, but they are concerned about the cost of their education— more so than, for example, community college students. Could community colleges and public four-year institutions improve their offerings in these respects, still keep tuition costs low and thus become a viable alternative for for-profit students? Many promising initiatives are attempting to make community colleges more labor-market oriented, efficient and cost-effective. If successful, these programs could mean significant shifts in the higher education market toward public sector institutions.
  3. How do students’ experiences and prospects vary depending on what type of for-profit they are attending and the kind of credential they are pursuing? And do employers’ views vary across employment sectors? It will be important for future research to examine how the views and experiences of students and other stakeholders vary across different types of for-profits, geographic regions and labor markets, degree programs and other factors. Future analyses should also explore whether the perspectives of employers toward for-profit and other colleges vary depending on employers’ job sectors and the types of positions they hire for. Such research can help foster an increasingly sophisticated discussion about the roles and value of for-profit colleges in the higher education sector overall.

The findings in “Profiting Higher Education?” are based on nationally representative surveys with 197 current for-profit college undergraduate students, 249 recent graduates who completed certificates or degrees at a for-profit college and 803 adults who are considering enrolling in college to earn an undergraduate certificate or degree (adult prospective students). This research also included regionally representative surveys with a total of 656 human resources professionals (employers) from four major U.S. metropolitan areas. Interviews with current undergraduates, graduates and prospective students were conducted from February 7 through June 7, 2013, by phone, including cell phones, and online. Data from employers were collected through telephone interviews from April 4 through May 9, 2013. 

Public Agenda also conducted a total of eight pre-survey focus groups across four major metropolitan areas in the United States. Four groups were conducted with human resources professionals and four with adult prospective students. In addition, we conducted four Learning Curve Research (LCR) focus groups with adult prospective students. 

Download the report for details on the methodology and sample characteristics.  For more information, email research@publicagenda.org.

Will Friedman and Carolin Hagelskamp discuss Public Agenda’s research on how students, prospective students, alumni and employers view for-profit colleges.