Cost and lack of majors are among the top reasons why students leave for-profit colleges

For the majority of students^[1], the college where they enroll is often the one from where they will graduate. But not so for the approximately 1 million students who transfer each year^[2] from one school to another. Of these 1 million, about 100,000 students transfer^[3] from one of the approximately 2,300 for-profit^[4] universities that exist in the U.S. That’s a sizable portion of the approximately 777,000 students^[5] who attend for-profit colleges.

As researchers^[6] who specialize in higher education^[7], we are especially interested in why students leave for-profit universities. These schools have been criticized for deceptive recruiting practices^[8], being overpriced^[9] and failing to adequately prepare graduates for well-paying jobs^[10].

In an effort to better understand the reasons behind the transfers, we interviewed 12 students^[11] who transferred from a private for-profit to a public university in the fall of 2021. Below are four main themes that emerged from our conversations.

1. Too expensive

Affordability came up repeatedly among the students we interviewed. A quarter said attending a for-profit initially seemed less expensive than a public university option. However, after they enrolled, the costs went up. They initially received a scholarship from the for-profit but did not realize it was only for the first year and nonrenewable. Their experiences are not unusual. Financial aid offers are often vague about the total costs^[12] that students are expected to pay.

Half of those we interviewed also shared that despite receiving some institutional scholarships, they had to take out loans to cover the balance. As they watched their debt grow, particularly in cases in which their initial scholarships expired, they realized transferring to a public university would be cheaper.

Their experiences are consistent with national trends that show college students who attend for-profits are more likely to have student loan debt - with higher balances - than people enrolled at other types of schools. A 2019 study found that 74% of full-time students who attended for-profit colleges^[13] had outstanding loans, compared to 21% at community college and 47% at four‐year public schools. On an annual basis, for‐profit students borrowed about $8,000, compared to the average community college student’s debt of approximately $4,700 and four‐year public student average of $7,000.

As of the 2020-2021 academic year, the average net cost of attendance^[14] at for-profit institutions was $24,600, while it was $14,700 at public institutions.

2. Lack of majors

About half of those we interviewed transferred in part because their original school did not offer their desired major. Some initially chose the for-profit for reasons like convenient location, easy admission process or perceived affordability. Later they realized none of the majors offered were exactly what they wanted. For others, their interests shifted over time.

For-profit universities mainly offer majors that are vocationally oriented and do not cost much to teach^[15], such as business, engineering-related technologies and health professions. Nonprofit institutions tend to have more diverse offerings.

We found that before deciding to transfer, most students asked their academic advisors to help identify alternative majors. Though this may seem like a good idea, the reality is many for-profit universities, in an effort to keep revenue flowing, often direct their employees to find ways to keep students enrolled^[16].

Indeed, several students told us their advisors recommended staying and switching to a different major rather than exploring options at other schools that may better align with their interests. The advisor for one aspiring lawyer initially suggested the for-profit’s justice studies major. After taking introductory courses, the student realized justice studies was intended for future law enforcement officers, not lawyers. The advisor then placed her in the university’s government program, which was also not a good fit.

The student independently researched the best majors for future lawyers and determined that political science would be the best preparation. Since the for-profit university did not have a political science program, she transferred to a public university.

3. Inflexible schedules

Unlike students at nonprofit and public universities, students at for-profit universities don’t get to pick the classes they take. Students are enrolled in courses each term by their academic advisors without much choice over the course’s topical focus, the professor who’ll teach it or the day and time that the class is taught.

The predetermined structure of for-profit degree programs appeals to some students^[18], such as those with caretaking responsibilities or inflexible work schedules. However, we found the practice also motivated many to transfer. While they valued advisors’ input, the students we interviewed wanted more transparency, control and freedom over their schedules, instructors and course topics.

4. Questions of quality

Scholars^[19] and policymakers^[20] have long called the quality of for-profit colleges into question. However, only two students we interviewed mentioned quality as a reason for transferring. They had concerns that instructors were inexperienced and courses were too easy.

The Biden administration recently proposed new rules^[21], referred to as gainful employment regulations, aimed at ensuring degrees lead to positive employment outcomes for graduates. The rules would revoke the ability of schools to offer students federal financial aid if graduates’ student loan payments exceed 8% of their income or 20% of their discretionary income^[22]. The U.S. Department of Education states that the objective^[23] is to “ensure quality and accountability in postsecondary education.”

Here’s what students can do

To avoid the potential pitfalls associated with for-profit colleges, we suggest a few options that students can explore prior to enrollment.

They may want to pay special attention to academic program structure, costs and quality. Seeking information from sources unaffiliated with any specific university is a good strategy. The Bureau of Labor Statistics’ Occupational Outlook Handbook^[24] has good information about majors that lead to different jobs. Schools that do not offer the degrees in majors that lead to a student’s desired career should be avoided.

The College Scorecard^[25], an online tool provided by the Department of Education, lets people search for schools according to majors offered, location and other criteria. With this information, the scorecard provides earnings and student debt data of recent graduates.

Students should also pay close attention to the fine print of financial aid packages^[26]. Especially, students should ask explicitly whether scholarship offers are renewable. If the answer is yes, it pays to clearly understand the criteria required in order to maintain eligibility.

If scholarships are not renewable, students should account for this when estimating the overall cost of attending the school over the expected span of time it takes to earn a degree. Our research shows^[27] that for-profit institutions may be less affordable in the long run than they initially appear. Conversely, nonprofit institutions that initially seem more expensive than for-profit institutions may be more affordable over the course of a student’s degree.

References

1. ^{^} majority of students (files.eric.ed.gov)
2. ^{^} 1 million students who transfer each year (nces.ed.gov)
3. ^{^} about 100,000 students transfer (nces.ed.gov)
4. ^{^} approximately 2,300 for-profit (nces.ed.gov)
5. ^{^} approximately 777,000 students (nces.ed.gov)
6. ^{^} researchers (scholar.google.com)
7. ^{^} specialize in higher education (scholar.google.com)
8. ^{^} deceptive recruiting practices (www.forbes.com)
9. ^{^} overpriced (www.journals.uchicago.edu)
10. ^{^} failing to adequately prepare graduates for well-paying jobs (www.edworkingpapers.com)
11. ^{^} we interviewed 12 students (doi.org)
12. ^{^} vague about the total costs (www.washingtonpost.com)
13. ^{^} 74% of full-time students who attended for-profit colleges (edworkingpapers.com)
14. ^{^} average net cost of attendance (nces.ed.gov)
15. ^{^} vocationally oriented and do not cost much to teach (www.booksfree.org)
16. ^{^} direct their employees to find ways to keep students enrolled (tressiemc.com)
17. ^{^} Klaus Vedfelt via Getty Images (www.gettyimages.com)
18. ^{^} appeals to some students (files.eric.ed.gov)
19. ^{^} Scholars (www.thirdway.org)
20. ^{^} policymakers (www.help.senate.gov)
21. ^{^} rules (www.ed.gov)
22. ^{^} if graduates’ student loan payments exceed 8% of their income or 20% of their discretionary income (www.insidehighered.com)
23. ^{^} the objective (www2.ed.gov)
24. ^{^} Occupational Outlook Handbook (www.bls.gov)
25. ^{^} College Scorecard (collegescorecard.ed.gov)
26. ^{^} fine print of financial aid packages (www.washingtonpost.com)
27. ^{^} Our research shows (doi.org)