Degrees of Difference: Returns to Non-Profit and For-Profit Higher Education

As the college-for-all movement presses forward, public and non-profit institutions alone appear to have been unable to keep pace with the increasing demand for higher education and the share of students enrolled in for-profit institutions has increased. But are these proprietary institutions an adequate substitute for traditional colleges and universities? This paper reviews sociological theory on the role of higher education in the matching of employees and employers in the labor market. We would expect returns to for-profit and non-profit institutions to be indistinguishable, if proprietary institutions are equally effective at fulfilling the selection, human capital improvement, or signaling roles of traditional higher education. The analysis shows that the short-term financial returns to attending a non-profit institution are higher than those of attending a proprietary. While those who enroll in for-profits are more likely to receive a credential, they are more likely to leave school with a lower degree than students at non-profits. Those who attended at for-profits earn less, face higher costs, greater debt burden, less stability in employment, and are less likely to attend an institution that is regionally accredited.