November 1, 2015

HIGHER EDUCATION BUBBLE UPDATE: The Closing Of A Newsroom’s Mind: I’ve seen how for-profit colleges can help students—many of them older and seeking better jobs—but the government and the media want to shut them down.

Until recently, we couldn’t answer a fundamental accusation. Knowing our students and following their careers, we believed that their education was opening doors to jobs and increasing their incomes. But to our frustration we couldn’t prove it. We didn’t have the third-party data. Once students graduated, we had no way of verifying their incomes.

A consortium of 35 states has now gathered income data from taxpayers for recent years (based on unemployment-tax filings). Researchers have access to that data, not for individuals but for groups like our former students. We cannot know the income of any individual student, but we can ask for the average of a group—say, nursing students.

Comparing Kaplan students’ pre-enrollment incomes (which we know from their student-aid filings) with their incomes in the years immediately after graduation:

• The weighted average gain in mean income among associate-degree graduates with jobs was 31%. This is the average earnings of graduates of all our programs—what most of you would call majors—weighted for the number of students in each program.

• The weighted average gain in mean income among bachelor’s-degree earners was 35%.

• The weighted average gain among masters-degree earners was 42%.

Of course, students paid tuition and spent years to earn those degrees. There is more research to do, and we’re just starting to evaluate the gains in income compared with the cost of education, but our initial figures look very good for students and for Kaplan.

We have educated students for degrees that have, on average, produced real gains in income. And we’ve done it with a student body 64% of whom were eligible for Pell grants (the Pell-eligible population is 38% at not-for-profit colleges). The numbers relate only to income gains in the first couple of years after college; graduates expect that they are starting a career and that their earnings will grow with time. . . . You would think that the earnings data above would be universally hailed as good news: Students on average are achieving significant income gains after getting degrees. I can promise you it will not be so hailed. Politicians, analysts and advocates—and some reporters or whole newsrooms—have closed their minds to the possibility of anything good being achieved by students at a place like Kaplan University.

For-profit schools compete with traditional schools, which are a core Democratic constituency. Naturally government and the media are out to get them.

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