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Transferring To A For-Profit College Will Decrease How Much Money You Make: Study

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DEVRY
This Nov. 24, 2009 photo, shows the entrance to the DeVry University in Miramar, Fla. Students aren't the only ones benefiting from the billions of new dollars Washington is spending on college aid for the poor. An Associated Press analysis shows surging proportions of both low-income students and the recently boosted government money that follows them are ending up at for-profit schools, from local career colleges to giant publicly traded chains such as the University of Phoenix, Kaplan and Dev | ASSOCIATED PRESS

A student who transfers from a community college to a for-profit school will earn less once they have their degree than if they were to attend a public or non-profit private institution, according to a new study released Tuesday.

The Center for Analysis of Postsecondary Education and Employment followed 80,000 full-time community college students for their study. CAPSEE found graduates of for-profit colleges had net earnings gains of only $5,400, while public college grads posted gains of $12,300 and $26,700 respectively.

"We find significant wage penalties to transfer to a for-profit college instead of a public or private nonprofit college," the authors wrote in their abstract.

Black and Hispanic students, and students who performed poorly while at a community college, were more likely to transfer to a for-profit school than a non-profit private of a public university, according to the study. Since minority students are more likely to come from low-income families, earning less after college makes it that much harder for them to close the gap in income level compared to their white peers.

This report adds to a growing body of data showing negative impacts of attending for-profit colleges. Students at these proprietary schools are more likely to face unemployment and carry larger amounts of student debt, according to the National Bureau of Economic Research. For-profit college graduates also default on their student debt at higher rates than students at traditional non-profit schools.

The CAPSEE authors, Yuen Ting Liu of Columbia University and Clive Belfield of Queens College, wrote: "Little of this evidence has been encouraging, with many studies finding lower academic attainment and earnings among students who enroll in for-profit colleges, despite their higher tuition and fees. Looking over a sufficient time period, our inquiry affirms this general conclusion for students who transfer to for-profit colleges.

"Although these transfer students followed a complicated path through their post-secondary education, we identify a statistically significant wage penalty from enrolling in a for-profit institution. This penalty appears consistent across subgroups of students, although it is greatest for for-profit students who did not complete an award."

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