Community College or For-Profit College? Employers See No Difference, Study Finds

There are plenty of things people criticize about higher education in the U.S., but for-profit colleges are among the most controversial aspects of the system, and a new report further questions the value of their degrees. A study from the University of Missouri indicates students of for-profit colleges may be better off getting degrees from community colleges, because students from for-profit and community colleges have similar job prospects, despite vast differences in the cost of their educations.

The researchers put together fake resumes for job applicants with either a for-profit college degree, a community college degree or a high school diploma, and they sent them out for positions in sales, customer service, information technology, medical assistance and administrative assistance. Employers called to ask about candidates from for-profit colleges just as often as they did for candidates who graduated from community colleges.

This matters because for-profit colleges generally cost much more than community colleges, with tuition as much as five times higher at for-profit schools, according to a news release on the research.

“Tuition at for-profit colleges can be as much as five times higher than at two-year community colleges,” said Cory Koedel, according to the news release. Koedel is a professor of economics and public policy at the University of Missouri and authored the study with Rajeev Darolia, another professor. “When people are weighing their higher-education options, tuition cost and the ability to gain employment after school should be considered heavily,” he said.

That’s true of anyone considering going to school, whether it’s for an associate’s degree or a Ph.D. — you should weigh the cost of the program against your projected future earnings and the availability of jobs in your field. Considering the majority of college students need to finance their educations, it’s important to know you’ll be able to not only find a job after college, but one that pays well enough to support your student loan payments.

“The University of Missouri study affirms the real value of career colleges because many adult learners don’t have the capacity or need to take general studies classes that most community colleges require,” the Accrediting Council for Independent Colleges and Schools (ACICS), which represents for-profits and other trade schools, said in an email when asked for comment on the study. “They are attending a career-oriented school to become skilled in a trade that will quickly improve their economic status.”

Students at for-profit schools also take on a lot of debt. These students represent about 13% of people getting higher education degrees, but they represent about 31% of student loan borrowers and about half of student loan defaults, according to the Department of Education. Defaulting on student loans can subject borrowers to debt collection calls and associated fees, as well as wage garnishment and credit score damage. Given the serious consequences of not being able to afford your education, it’s crucial to consider the potential value of a degree before borrowing money to get it. (You can see how any student loan debt is affecting your credit by viewing your credit scores for free each month on Credit.com.)

“This study shows that no significant difference exists with respect to generating employer interest between individuals with community college and for-profit degrees,” Koedel said. “For many people, community college may be the better option financially.”