# For-Profit Colleges vs. Community Colleges Neither community colleges nor for-profit schools are, on the whole, producing very good outcomes. November 7, 2017 • Commentary By [Neal McCluskey](https://www.cato.org/people/neal-mccluskey) This article appeared on *[Washington Examiner](http://www.washingtonexaminer.com/)* on November 7, 2017. If there’s been a villain in higher education over the past several years, it’s been [for-profit colleges](https://www.politico.com/story/2015/07/barack-obama-pushes-for-profit-colleges-to-the-brink-119613). Money-grubbing rip-off artists, they are! Meanwhile, [their antithesis](https://www.insidehighered.com/views/2016/10/25/obama-administration-has-given-community-colleges-moment-sun-essay), at least conceptually, has been community colleges—cute, low-cost, community-based institutions. Yet according to the headline for a piece by New America’s Kevin Carey, the [latter have been “underappreciated.”](https://www.nytimes.com/2017/10/31/upshot/revised-data-shows-community-colleges-have-been-underappreciated.html) Is this true? The basis for Carey’s hailing of community colleges is new federal reporting that improves on the old standard of tracking whether full-time, first-time students completed their program in the school where they started within 150 percent of expected time. The [new info](https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2017150) tracks students for eight years and includes data on completion and transfers. Using the full-time, first-time standard for students who started at community colleges in 2013, only 25.4 percent had completed within 150 percent (3 years for a full associate’s degree, shorter for certificates) of the time they should have. Meanwhile, 61.2 percent of students at 2‑year for-profit schools had completed, making community colleges look atrocious, and for-profits just crummy. Neither community colleges nor for-profit schools are, on the whole, producing very good outcomes. Looking at cohort year 2008 and incorporating transfers puts a better gloss on community college outcomes. Only 26.6 percent of students who started at community colleges had completed within 8 years—not good. But one-third eventually enrolled at a different institution, and 2 percent were still at their original school. So about 62 percent were done or had transferred. How does this compare to two-year for-profits? About 65 percent completed—much higher than at community colleges. But only 3.9 percent transferred. And for-profit students were far more likely to be enrolled in shorter certificate programs than longer associate’s degree programs than were community college students. Carey notes that a far larger share of for-profit students are in four-year programs than two-year, and four-year for-profits have “much lower graduation rates than those of comparable public institutions.” Four-year publics do seem to perform better: Only 32.3 percent of for-profit students in four-year programs had completed their programs within eight years, versus 56.4 percent of students in public four-year institutions. (Of course, neither rate is very impressive.) Include transfers and continued enrollment at starting institutions, and public four-year colleges could have a persistence rate as high as 79.2 percent, versus only 40.2 percent for for-profit institutions. But here’s the thing: For-profits [work with students](https://nces.ed.gov/pubs2017/2017416.pdf) with much greater challenges. Students at four-year for-profit schools are significantly older—less “traditional”—than at 4‑year publics, with mean ages of 31.7 versus 23.9 years. Student ages are comparable at public and for-profit two-year schools, with a mean of about 27. For-profit students are much more likely to be from underserved minority groups. About 55 percent of students in less-than-two-year for-profit programs are black or Hispanic, as are 46 percent of students in two-year for-profits. At community colleges, only 35 percent of students come from these groups. At four-year schools, 41 percent of for-profit students are from these groups, versus only 27 percent at public colleges. For-profit students are much more likely to have dependents. In less-than-two-year for-profit programs, 46 percent of students have dependents, as do 42 percent of students in two-year for-profit schools. Only 32 percent of community college students do. About 56 percent of students at four-year for-profits have dependents, versus only 16 percent at public four-year colleges. Finally, for-profit students are far more likely to have poorly educated parents. In less-than-two-year and two-year for-profits, 50 percent of students’ parents maxed out at a high school diploma or less. At community colleges, only 38 percent of students’ parents had such limited education. At four-year for-profit schools, 49 percent of students have parents whose education topped out no higher than high school. Only 26 percent of public four-year college students were the same. What does all this suggest? Neither community colleges nor for-profit schools are, on the whole, producing very good outcomes, but before making any pronouncements about who is sufficiently appreciated, a lot of context is necessary. And considering the [massive](https://www.cato.org/publications/policy-analysis/higher-education-tuition-lost-appropriations) [taxpayer subsidies](https://trends.collegeboard.org/student-aid/figures-tables/student-aid-nonfederal-loans-current-dollars-over-time) to the entire Ivory Tower, maybe no parts of higher education deserve much appreciation. ##### About the Author [![Neal McCluskey Cropped](/sites/cato.org/files/styles/author_picture/public/2023-11/mccluskey-cropped.jpg?itok=I-QI0yJD)](/people/neal-mccluskey) ##### [Neal McCluskey](/people/neal-mccluskey) Former Director, Center for Educational Freedom, Cato Institute