Want to Get a Job? Attending a For-Profit College May Not Help
A bachelor’s degree may be the price of admission for many jobs, but not all college degrees are created equal. Job applicants who have a degree from a for-profit, online college are less likely to receive a call back from an employer than those who had a degree from a public, four-year university, according to the results of a new study by researchers at Harvard University.
“[E]mployers appear to view for-profit postsecondary credentials as a negative signal of applicant quality,” the authors of the study, which was published in the American Economic Review, wrote.
To get a sense of what employers really thought of online and for-profit degrees, the researchers sent more than 10,000 resumes in response to postings for jobs in business and healthcare in five large U.S. cities. Some fictitious resumes listed a bachelor’s degree from an online, for-profit college, some from a public university, and some from a for-profit college with a physical location in the area. Aside from the different educational backgrounds, the fake candidates all had equivalent skills and experience.
Having a bachelor’s degree from an online, for-profit school decreased a person’s chances of getting a call back for jobs in accounting, customer service, and sales by 22%, the researchers found. Employers were more receptive to degrees from local brick-and-mortar for-profit schools, but they were still 10% less likely to respond to candidates with that educational background.
Having an online degree from a for-profit school also hurt applicants applying for jobs in healthcare, but only if they were seeking a position that didn’t require a license. For jobs where an additional credential was necessary, employers seemed more concerned with whether the person was properly licensed rather than with where they attended school.
“[The] results suggest that employers value bachelor’s degrees and certificates from public institutions more highly than they do those from for-profit institutions. The finding is notable given the high cost of for-profit institutions, both to students and to taxpayers,” the study’s authors wrote. Average annual tuition at a for-profit school was $15,610 for the 2015-2016 school year, according to data from the College Board, compared to $9,410 annually at a public, in-state university.
The study didn’t address why employers were less likely to contact candidates who attended for-profit schools. They may believe the quality of education offered at those schools is inferior, or they might be making assumptions about the types of people who choose to enroll at for-profit colleges in the first place, the researchers speculated.
Though for-profit schools enroll only a fraction of the students who attend public universities, they’ve become a significant force in higher education in recent decades. Between 1990 and 2013, enrollment at private for-profit colleges and universities increased 565%, according to the National Center for Education Statistics (NACE). Enrollment at public and private non-profit schools grew by 35% to 37% during the same period.
Yet over the past few years, the explosive growth of for-profit education has tapered off as people have raised questions about many of the schools’ enrollment practices and cost of attendance. Enrollment at for-profit schools dipped 21% between 2010 and 2013, according to NACE data. The University of Phoenix, a leader in for-profit higher education, went from enrolling roughly 477,000 students in 2010 to 176,900 at the end of 2015, the Arizona Republic reported.
Corinthian Colleges, another chain of for-profit colleges, shut down in 2015 after the U.S. Department of Education fined the school $30 million for misrepresenting data about job placement rates to students. In February 2016, the Federal Trade Commission sued DeVry University, saying the for-profit school’s ads, which claimed DeVry graduates would earn 15% more than people with degrees from other institutions, were deceptive.
As various government agencies have started taking a closer look at for-profit colleges, public and not-for-profit colleges, such as Arizona State University and Southern New Hampshire University, have begun to offer more flexible paths to earning a degree. These schools seem designed to appeal to students who might have otherwise opted for a for-profit institution like the University of Phoenix.
“I think the market’s been educated,” Paul LeBlanc, president of Southern New Hampshire University, a private, non-for-profit school with extensive online offerings, told NPR. “People used to not be aware of the difference between for-profits and nonprofits.”
Now, evidence confirms what many people long suspected – a degree from a for-profit college might not be as valuable in the job market as one from a more traditional school, despite the generally higher price tag at for-profit schools.
“When people are weighing their higher-education options, tuition cost and the ability to gain employment after school should be considered heavily,” Cory Koedel, an associate professor of economics and public policy at the University of Missouri who’s studied how employers view degrees from for-profit schools, said in a statement. “For many people, community college may be the better option financially.”