Weight of a Degree

Story by Eric Kipp

In cheerful commercials, young adults boast about finding a better career and living a better life all because they went back to school and got their degrees. These ads are for schools like Kaplan University or the University of Phoenix, classified as “for-profit” universities. But most people aren’t convinced by these messages, remaining skeptical about for-profit schools. Some of the degrees can be completed entirely online. And, as the label “for-profit” implies, they make money off their students.

Recently, the public has had another reason to doubt the quality of for-profit schools. Many students are having trouble paying back their loans. According to a study done by The Wall Street Journal, just over one-fifth of for-profit students default on their loans within three years. This is compared to a seven percent default rate for public university students.

There are several reasons for this high default rate. Family is one. “We serve a very non-traditional student base,” says Bob Cohen, Senior Vice President of the Career College Association. “These students are often the first in their families to attend a higher education facility.” Plus, they often have families of their own to take care of, and most don’t have help from their parents. They don’t get help from the government, either. For-profit universities don’t receive funding from the federal government, putting the entire cost of schooling on the student.

But like other universities, these for-profit schools are required to maintain standards in order to keep their national or regional accreditation. Placement rate, graduation rate, and loan default rate are all evaluated. If any one of these falls below a certain point, the school loses its accreditation. So a degree from a for-profit school is just as legitimate as a degree from a more traditional university. But the real test comes in the field, when employers have to decide which kind of degree they value more.

In Des Moines, employers don’t seem to hesitate about hiring people with degrees from for-profit schools. Polk County Bank says it doesn’t consider what school the degree is from when looking for applicants. Prior experience is what matters. Broadlawns Medical Center and Gislason & Hunter, a regional law firm, give the same answer.

Perhaps, then, the public skepticism about for-profit universities is unfounded. The students are dealing with more difficult circumstances than most university students, often coming from a lower socioeconomic status. When you couple this with the current recession, a traditional university is often too expensive for them. And yet they are determined to receive an education. “We don’t understand this burden,” says Cohen, “and most any student could attest to this.”