Not Every College Program Is Worth It, And College Isn't Right For Every Student

Defaults on student loans, which are an empirical measure of inability to pay these loans which are almost impossible to discharge in bankruptcy, are highly concentrated among students who have dropped out, who weren't able to secure professional certification in their chosen fields, who attended "for profit" institutions of higher education, or attended other low quality (often private and religious) institutions of higher education. 

Also, some programs of study produce greater economic returns on investment than others.

Graduates of reputable higher educational institutions, especially those with a track record of having economic value, who manage to secure the relevant professional certifications, in contrast, have very low default rates even when the student loan debts that they owe are substantial.

An op-ed column lays out some of the relevant facts:

Before the federal government forgives student loan debt, it would be good to understand what makes the debt so onerous. The problem isn’t overwhelming debt — it’s underpowered education.

Postgraduate borrowers aren’t earning enough money to repay their loans because whatever they studied didn’t give them the skills to get a sufficiently well-paying job.

Think about it: Even a big debt is manageable if you incur it to get, say, a medical degree. Conversely, even a small debt is unaffordable if you major in a field with limited career prospects or low pay or, worse, you drop out with nothing to show for your efforts. The high price of tuition simply compounds the problem. . . .

According to the latest data from the Department of Education’s National Center for Education Statistics, only 26 percent of students who enrolled in private, for-profit institutions in 2013 managed to graduate within six years. Other schools’ six-year graduation rates weren’t great, either: 62 percent for public institutions and 68 percent for private nonprofits.

A report last year by Third Way, a center-left think tank, found more than 500 schools where the average low-income student who enrolls earns less than an average high school graduate, even 10 years after enrolling. “It’s unlikely that low-income students who attend these institutions will ever be able to recoup their educational investment,” the study said.

From this New York Times Op-Ed Article.

The Third Way report linked above used the following metric that is then broken down in the charts below, which tend to show that a 15 or 20 years to recoup net cost threshold would be quite reasonable.

There is a piece missing from this analysis, however, which is that many of the institutions with high default rates irresponsibly admit and accept tuition from large numbers of students who lack sufficient academic preparation and aptitude as demonstrated by secondary school curriculum, grades, test scores, and references, for example, to have a reasonable chance of graduating from the program and succeeding the the careers that these students are entering those programs to pursue.

While there is a positive credential effect associated with many degrees and majors, it is also the case that detailed measures of learning and value added are consistently lowest, on average, for the students admitted with marginal academic readiness for college.

Most often, these ill-prepared students incur substantial tuition, fees and sometimes room and board costs, to attend for a while, during which they are also forgoing opportunities to pursue work or apprenticeships that make more sense for them, much of it financed with student loan debt that can't be discharged in bankruptcy, and then they predictably fail and drop out. The students who do drop out in these circumstances often gain little or no educational benefit from the experience during which they were in over their heads. And, their failure does not build character, at least relative to successes that they could have had in a more suitable post-high school path.

One can argue that everyone ought to be able to have their chance, but one problem with that argument is that students who are ill-equipped to succeed in a particular high educational or post-high school program are often also in a poor position to accurate gauge their chances of success in doing so.

Many post-high school educational programs eligible for student loan financing so consistently admit students who are ill-prepared and fail, and offer such poor quality instruction, that the institutions should not continue to receive any public support or recognition and are basically fraudulent schemes.

Other programs provide outcomes comparable to public community colleges, but not significantly better, and with a much higher price tag for students, for the federal government that makes good on defaulted student loans, and at a much higher cost per successful graduating student.

Schools that are providing poor economic returns to their students are overwhelmingly admitting large numbers of low income students eligible for Pell grants who aren't academically prepared. More affluent students have social networks and resources sufficient to let them know that the problem institutions and/or programs are basically scams.

At other times, the problem is not an entire post-high school education program (I continue to use the term because many of these programs are not traditional academic degree programs), but just a few programs within that institution.

Advocates of the value of a generalize liberal education can argue that higher education is about more than money. But that ignores the fact that the most egregious offenders are predominantly offering pre-professional programs like the Marinello Schools of Beauty, used as a poster child for this problem in the article quoted above. Student loan defaults aren't coming mostly from liberal arts college program graduates who majored in classics or English literature.

This isn't to say that the non-profit and public higher education sectors are blameless. For the most part, they offer reasonably legitimate educational experiences and charge tuition that is less unreasonable relative to the quality of the programs that they offer. 

But, they too are frequently guilty of admitting academically unprepared students whom they set up to fail and don't provide the extra academic support to that students on the margin need to have a fighting chance, nor do they adequately warn marginal students that they are at heightened risk for failure.

Admittedly, predicting academic success is not an exact science. There are plenty of admitted students who have a very reasonable chance of success who nonetheless don't have the 90%+ odds of graduating and receiving any necessary professional certifications associated with their degrees that selective institutions of higher education do.

But it is also true, particularly at "open admissions" institutions and non-flagship public colleges and universities with lower retention rates, that the fact that often, probably a majority of the time, the fact that a particular student dropped out without graduating was eminently predictable before the first day of class. And, when that happens, the public that helped finance that predictably failed effort to pursue higher education is burned and the failed students, often burdened with student loans that are onerous for them, are frequently not better off compared to their other alternatives either.

More often than not, it is correlation and not causation, it is also true that students who aren't academically ready are also socio-economically less well off, and their predictable failures also burden their families much more severely than an upper middle class student who washes out in college.

This isn't to say that we shouldn't invest as a society in the betterment of young adults who aren't academically ready for college at the age of eighteen. But the funds our society invests in these young people could be spent on investments that put these young adults on paths to success rather than failure, and there are also plenty of people who, while they aren't ready for further education at age eighteen, have matured and are ready for further education and training five or ten or twenty years later.

We can also give those young people a boost by refusing to require educational credentials for employment that aren't actually necessary or beneficial for the job.

There are schools at providing great value to lower income students. The City University of New York, and the California State University System are standouts when it comes to four year degrees. So are a variety of public two year degree programs. No private or "for profit" colleges make the top ten cut in either four year degree or two year degree programs, and no private non-profits make the cut in certificate programs, although three "for profit" programs do:

* Teterboro School of Aeronautics in New Jersey, 

* Marian Health Careers Center in Los Angeles, and

* Alliant International University in San Diego.

Forty-six programs in Colorado were evaluated. The key portions of those evaluations and related analysis are below the fold. 

Keep in mind that a smaller number in the final column, so long as it is not "No ROI" is preferable. 

A program "makes the cut" if it provides a return in 15 years or less (all programs that "make the cut" actually do so in 9 years or less, with all that don't make the cut at 15.8 years or more). 

Fourteen bachelor's degree programs (eleven public, three private non-profit) made the cut, while four did not (two private non-profit, two for profit). Nine associate's degree or certificate programs made the cut (seven public and two for profit), while seventeen (eight public, one private non-profit, and eight for profit) did not. 

Seven out of eight of the public associate's degree (2) or certificate (6) programs that didn't make the cut, were in places with depressed local economies. So, low ROI was in part due to depressed local wages.

All of the for profit and private non-profit programs at all levels, whether or not they made the cut, were in places with healthy economies. 

Public Colleges

Public Bachelor's degree programs provide good returns everywhere in Colorado, while community colleges provide good returns in places with strong economies (except  the Community College of Denver), but not in places with weak economies.

Public community college programs (both associate's degree and certificate programs) in places with weak local economies did not provide good returns.

The exception (the Community College of Denver) was set up  to take the "bottom of the barrel" students, so to speak in an MSA where it was competing in the public sector with University of Colorado-Denver, Metropolitan State University, Community College of Aurora, Red Rocks Community College, Front Range Community College, Arapahoe Community College, in the private non-profit sector with the University of Denver, Regis University, CollegeAmerica-Denver, and Colorado Christian University, and in the for profit sector with Spartan College of Aeronautics and Technology, Colorado School of Trades, Rocky Mountain College of Art and Design, Bel-Rea Institute of Animal Technology, Concorde Career College, Avalon School of Cosmetology, and Colorado School of Healing Arts. CCD is the least detrimental of the No ROI colleges in Colorado, and isn't terribly expensive, but the numbers still aren't good.

All eleven public Bachelor's degree programs made the cut: Colorado School of Mines (1.1), University of Colorado-Denver (1.2), University of Colorado-Boulder (2.1), Colorado State University-Fort Collins (2.5), University of Colorado-Colorado Springs (2.8), University of Northern Colorado (3.1), Western Colorado University (5.3), Metropolitan State University (6.2), Colorado State University-Pueblo (6.5), Colorado Mesa University (8.9) and Fort Lewis College (9.0).

One public Associate's degree program made the cut: Community College of Aurora (8.4), and  two public Associate's degree programs did not make the cut: Adam's State University-Alamosa (24.2) and Community College of Denver (No ROI). 

Six public "certificate" programs made the cut, Colorado Mountain College (1.1), Red Rocks Community College (1.3), Front Range Community College-Westminster (1.4), Arapahoe Community College (1.9), Aims Community College-Greeley (3.1), and Technical College of the Rockies-Delta (5.9), and six did not (No ROI), Northeastern Junior College, Lamar Community College, Pueblo Community College, Trinidad State Junior College, Morgan Community College, and Otero Junior College. 

Private Non-Profit

Three private non-profit Bachelor's degree programs made the cut: Colorado College (1.4), University of Denver (1.9), and Regis University (4.3). 

Three other private non-profit programs didn't make the cut: one Associate's degree program, CollegeAmerica-Denver (No ROI), and two Bachelor's degree programs, Naropa University (No ROI) and Colorado Christian University (16.5).

For Profit 

Only two "for profit" programs rated in Colorado made the cut. The Associate's degree programs at the Spartan College of Aeronautics and Technology-Broomfield (3.0), and at the Colorado School of Trades-Lakewood (5.7).  

Ten "for profit" programs rated in Colorado, however, didn't make the cut: Six "for profit" certificate programs with (No ROI), Concorde Career College-Aurora, IBMC College-Longmont/Greeley, Colorado School of Healing Arts, Avalon School of Cosmetology-Aurora, Intellitec College-Grand Junction, International Salon and Spa Academy-Colorado Springs, and  two "for profit" Associate's degree programs, Bel-Rea Institute of Animal Technology-Aurora (No ROI) and Intellitech College-Colorado Springs (17.9), and two "for profit" Bachelor's degree programs, Colorado Technical University-Colorado Springs (15.8) and Rocky Mountain College of Art and Design (28.0).