A popular college investment promised students a career, but didn’t pay off

By Max Ehrenfreund

Five casual students sitting on the grass looking at laptop on c


Students who earned vocational certificates from for-profit colleges made an average of $900 less annually after attending the schools than they did before, according to a new study, leaving those who took out loans hard-pressed to pay them back.

By contrast, demographically similar students who received the same certifications from public community colleges earned $1,500 more than they did before attending school.

The paper from the National Bureau of Economic Research, published this week, offered new evidence for critics who say the for-profit college industry swindled students by pressuring them into racking up tens of thousands of dollars in debt while adding comparatively little value to their careers.

In 2014, the Obama administration issued new rules limiting the amount of debt students can take on in career-training programs. Though no schools were named in the study, some of the biggest for-profit colleges — including DeVry University and the University of Phoenix — have faced federal lawsuits or investigations that suggested they deceived students about the likelihood of finding jobs in their fields of study and how much they would earn.

The NBER paper analyzed data for 567,000 students who pursued vocational certificates at for-profit schools between 2006 and 2008. Eighty-three percent of them carried student loan debt. Of the 278,000 who earned similar certificates from public community colleges, just 25 percent were indebted, adjusting for demographic differences between the groups.

In 2014, the average tuition for certificate students at for-profit colleges was $8,118, compared to $712 for community college students in these programs, again adjusting for differences between the groups.

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The researchers — Treasury Department financial economist Nicholas Turner and economist Stephanie Riegg Cellini of George Washington University — focused the analysis on students seeking …read more