For-profit college dropouts take wage hit

Jeff Horwich: Congress and the media, including Marketplace, have heaped plenty of skepticism on for-profit colleges: low graduation rates, shady recruiting practices. But some new research shows going to a for-profit college — as with the non-profit variety — can pay off in the job market. From the Marketplace Education Desk at WYPR in Baltimore, here’s Amy Scott.

Amy Scott: A new paper from the National Bureau of Economic Research says an associate’s degree from a for-profit college can add roughly 22 percent more to a person’s paycheck. Co-author Stephanie Riegg Cellini at George Washington University says graduates of community colleges see a similar increase in pay, but for-profit colleges typically cost a lot more.

Stephanie Riegg Cellini: This is purely an earnings bump. Does it cover what you paid for it? That’s not clear.  

Cellini found that students who dropped out of for-profit schools fared worse than those who didn’t finish community college. Jeff Strohl is with Georgetown University’s Center on Education and the Workforce.

Jeff Strohl: You could imagine that, when they drop out without a degree, they are close to a low-earning high school graduate.

He says for-profit colleges tend to recruit disadvantaged students who may be less prepared.

I’m Amy Scott for Marketplace.