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California's For-Profit Two-Year Schools Are Kicking Community Colleges' Asses

Graduation rates reverse trends when looking at "non-traditional" students.


Any economics degrees here? Anybody? Hello?

There is a two-year college in California with a graduation rate of 72 percent. That's a remarkable number. California's community college graduation rate is a horrifyingly awful 25.3 percent.

Pacific College, though, isn't a public school. It's one of those for-profit schools that the Obama administration has tried blame for rising college debt and loan defaults. It's a nursing school, too, so it's a good bet those graduates are able to get jobs.

Teri Sforza of the Orange County Register's watchdog team decided to drill down on graduation statistics for California colleges and discovered a surprise:

  • Four-year public and private universities did a far better job graduating students than did the for-profit four-year institutions . Private universities graduated 72.9 percent of students after six years; public universities graduated 65.1 percent; and for-profits graduated 28.4 percent.
  • It was just the opposite for the local two-year schools, however — with for-profit schools out-performing their public counterparts on the graduation measure. Two-year public colleges in California graduated 25.3 percent of students after three years; while two-year, for-profits graduated 65 percent.

So, why are the numbers this way? California's community college system is a disaster. It's heavily subsidized and cheap with no entry barriers. This may sound like a dream to those with no knowledge of economics (and those folks are certainly in abundance), but the reality is that California's declining revenue has made it impossible for the state to keep up with demand, resulting in lengthy waiting lists for training for high-demand fields. Yes, a for-profit school is more expensive than a community college, but that math breaks down if the months of time lost waiting to get into classes is factored in. Then there are the thousands of folks who simply lack the aptitude for higher education, and we all get to subsidize this journey of unfortunate self-discovery. Angelo Lioudakis of Pacific College spells it out:

"Nobody has to test to be accepted into community college," Lioudakis said. "They have to test to get into our school. They have to take an entrance exam. They know what they want to be when they grow up. It costs more money to go to our school, but you will be in your career faster. There is a cost associated with that. A valuable degree should have value."

Sforza's piece talks about some other complex issues related to comparing different college systems, including the government's piss-poor method of defining what a student is for the purpose of determining graduation rates. Definitely give the story a read.

In July, Katherine Mangu-Ward reported on the Department of Education's failed effort to deny federal aid to for-profit schools by setting up various completely arbitrary success measurements.

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  1. Really? No comments? No Tony decrying the greedy for-profit school stealing all the best students? I am disappointed in our trolls.

    1. stealing students. those GREEDY FUCKING CAPITALISTS KNOW NO LIMITS!!111oneone

      *shaken fist*

  2. No comment but a question: What is the difference between a private and for profit school (in economic terms that is)?

    1. acceptance criteria I guess? like, the for-profit will accept anyone who can pay the fee, while private schools tackon additional bullshit as they see fit?

      just a highschool-and-CC-dropout level guess.

    2. Most private colleges are not-for-profit. After expenses and salaries, any profit gets reinvested in the school or returned to students in the form of price reductions (yeah, right).

      For-profit schools have investors who expect a return on their investment in the form (usually) of dividends. Several for-profit schools are publicly traded corporations C-corps or REITs.

  3. A valuable degree should have value.

    And be highly valued as well.

  4. I would imagine the 4 college graduation rates have a lot to do with student demographics. For profits (I am thinking schools like Phoenix), cater to “non-traditional” students while non profit public and private schools cater to high school graduates going that go to college full time. The 5 year graduation rate will be much lower for non traditional students (I am a non-traditional student in 2 year masters program at a private nonprofit college for my 5th year – hopefully 1 year left), probably the overall graduation rate will be lower as well – it is harder for non-traditional students (having been both).

  5. I don’t know about California, but NJ puts all kinds of requirements on what classes must be included to justify a degree.

    Most of the first two years of a 4-year degree is just bullshit liberal arts “core” classes, that no one wants to take, anyway.

  6. Nationwide, for-profit two-year colleges have much higher graduation rates than community colleges, while for-profit four-year programs have much lower rates. It’s not a California thing.

    For-profits disproportionately enroll older, working, low-income and minority students who are much less likely to complete a credential. Very few for-profits screen applicants as the nursing school you mentioned does.

    For-profits compare well to community colleges, which enroll similarly high-risk students, because for-profits specialize in job training, offering more vocational certificates which can be completed in a year or less. Many community college students take general education courses that will not help them, unless they transfer and earn a bachelor’s, which very few do. For-profits design coherent programs rather than letting students wander through the curriculum earning credits that won’t be of any use. For-profits also schedule all their courses to meet the needs of working adults. Community colleges are playing catch up on that.

    I write Community College Spotlight (, so I’ve been following these issues. I think community colleges need to see for-profit colleges as the competition and steal the effective ideas for getting students to where they want and need to go.

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