The value of an education: Spiraling college costs and student debt spark doubts over payoffs
The value spectrum
Lost in the din over the new gainful-employment regulations, wrote Doug Lederman at Inside Higher Ed, was that the Department of Education "has written into federal policy for the first time a direct (if crude) attempt to measure the value of an academic program, by linking a measure of student expenditure (student loan debt burden) with an outcome measure (graduates' average income)."
This approach to evaluating post-secondary education should bring into relief a broad spectrum of educational needs and economic gains, experts say. For privileged students, social skills and family connections may help absorb even high student debt acquired at an elite university, said Fabio Rojas, a sociologist at Indiana University, "but once you go down the spectrum, the risk-benefit calculation gets out of whack."
According to Rojas, a working-class kid who wants to be an electrical engineer should not justify a high debt load at a private university since an electrical engineer's pay is not extraordinary and a cheaper state school would likely produce the same results.
Rojas believes the value of for-profit schools varies, but he sees some as mainly in the game of processing student aid for profit without providing results. He is speaking of students who actually do complete their programs, but the non-completion challenge is equally controversial. Of those who entered a four-year bachelor's program in 2002, 57 percent completed their program, according to the Department of Education. Broken down into the three key sectors, 55 percent of students at public universities complete their degrees, as do 65 percent of students at private nonprofit colleges, but the figure is only 22 percent at for-profit colleges.
Defenders of for-profit colleges argue that their statistics are poor because they are serving low-income and at-risk students, many of whom are not well prepared. Critics respond that preparation needs to improve at the high school level but that mainstream public and nonprofit universities also need to do more to recruit and support promising at-risk students.
The 78 percent who begin four-year programs at for-profit colleges but do not finish are saddled with debt. This is also true of students who complete programs but do not find work in their chosen field, and those who do find work that doesn't pay well enough to justify the debt.
"You want a certificate, so you take out loans and go to school," Rojas said. "But are you going to start making enough extra to compensate? The answer is often no, even if they were giving good training. And many aren't."
Finding the right ratio
Darrell Sheperd could be Exhibit A for Rojas. After spending 20 years in Arizona and Utah doing construction, Sheperd built a successful construction business with respectable earnings before the 2008 crash. When construction ground to a halt and his income evaporated, Sheperd turned to Stevens Heneger, a local for-profit college, hoping to become a registered nurse to adequately support his family.
Instead, he found that after $23,000 of debt and two years of schooling, he could not complete his nursing degree because the school did not offer a nearby program, and he could not transfer his credits to a local state university because Stevens Heneger was not regionally accredited. He is now working as a lab technician, earning $12 an hour.
"If I had known (about the accreditation issue), and if I had known that other schools were offering the same program for half the price, I would have arranged my schedule to go to the local state school," Sheperd said.
He is now in survival mode trying to support a large family of adopted children, and he has not been keeping current on his loan payments.