Postsecondary Education: Student Outcomes Vary at For-Profit, Nonprofit, and Public Schools

Institutions of higher education, including for-profit, nonprofit, and public schools, receive billions of dollars each year from the Department of Education (Education) to help students pay for school. In the 2009-2010 school year, Education provided $132 billion in grants and loans to students under federal student aid programs, up from $49 billion in the 2001-2002 school year. However, relatively little information is available about the quality of education being provided by these schools. Student characteristics are also important to consider when comparing educational outcomes at schools in different sectors (for-profit, nonprofit, and public). Measuring the quality of educational programs (i.e., how much knowledge or skill students gain) is difficult. Because few direct measures are available, indirect outcome measures, such as graduation and student loan default rates, are often used. Although no single outcome can be used to fully measure something as complex as educational quality, looking at multiple outcome measures (e.g., graduation rates, pass rates on licensing exams, employment outcomes, and student loan default rates) can shed light on the quality of education provided by schools. Available data indicate that for-profit schools enroll a higher proportion of low-income, minority, and nontraditional students who face challenges that can affect their educational outcomes. Students with these characteristics tend to have less positive educational outcomes than other students for a number of reasons. For example, students who are low-income, minority, or older generally have lower graduation rates than other students regardless of sector. To respond to Congress' interest in student outcomes at different types of schools, this report addresses the following questions. Consequently, student outcomes at different types of schools can be associated with differences in student characteristics, as well as school type. Accounting for differences in student characteristics as much as possible allows for more meaningful comparisons between types of schools and a better understanding of the school's role in producing student outcomes. This can be done in different ways, such as using statistical models or comparing outcomes for similar groups of students or graduates. 1. What does research show about graduation rates, employment outcomes, student loan debts, and default rates for students at for-profit schools compared to those at nonprofit and public schools, taking differences in student characteristics into account? 2. How do pass rates on licensing exams for selected occupations compare among graduates of for-profit, nonprofit, and public schools?