When Going to a For-Profit College Might Make Sense

ECPI University has a better reputation than other career colleges. But is it worth the cost?

The Virginia Beach campus of ECPI University, a for-profit educational institution. (National Journal)

VIRGINIA BEACH, Va. — ECPI University's campus here looks like a suburban office park, and that's exactly the feel its career-focused students want. "I was really tired of making $9 an hour. The only way you're going to make more than that is going back to school," says Darius Mitchell, 27. A state-university dropout who has spent years working retail jobs, he consolidated previous student loans and took out additional ones to enroll here.

"The question I was faced with: Do you go deeper? Or do you continue doing what you're doing, and never get out?" Mitchell says of his debt. He'll graduate from ECPI's campus here in May with an associate's degree in network security and a job at Canon Information Technology Services. It's not Google, but it might be Mitchell's entry point into the middle class.

At about $14,000 a year, tuition at ECPI is more than triple that of an in-state student at nearby Tidewater Community College. But low-income students are willing to cough up the money because programs are shorter, graduation rates are higher, and 85 percent of students move into jobs in their field of study — usually health care or technology — soon after graduation. ECPI serves about 9,800 students across 13 locations in Virginia and the Carolinas, offering credentials from certificates to master's degrees.

But students don't always experience a high return on investment. Only about half of ECPI programs recently evaluated by the Education Department pass proposed federal student debt and default standards for career programs, although the rest are close to passing. Administrators here say they're working to keep tuition affordable and starting salaries high — but they can't control the economy.

Buying Opportunity

Many jobs that used to be open to a worker with just a high-school diploma now require advanced training. Medical assistants, who work on administrative tasks in doctor's offices and earn about $29,000 a year, are usually required to hold a postsecondary certification or an associate's degree. To become a nurse, a medical assistant would need to go back to school.

In many fields, education requirements are tightening because jobs have become more complex. In 2010, ECPI introduced a program in mechatronics — a design discipline that incorporates multiple fields of engineering — because regional manufacturers are looking for workers with skills in advanced production-line technology that blends computer programming and engineering. In other technology jobs, workers often need to retrain to stay on top of the latest tools and processes.

For-profit colleges, otherwise known as proprietary institutions, currently serve about 13 percent of all college students. Whether they're organized as small businesses or publicly traded companies, for-profit educational institutions sell a tantalizing product: a fast track to a better-paying job. Although they can be expensive, for-profits attract disproportionate numbers of low-income, adult, and minority students, who rely on federal grants and loans to meet high tuition costs.

These institutions are notorious for leaving students with meaningless credentials and lots of debt. The sector accounts for about one-third of student loans and nearly half of loan defaults, according to the Education Department. Federal and state investigations into for-profit institutions have become so common that last week, congressional lawmakers proposed creating an interagency committee to coordinate them all.

ECPI University has a better reputation than most for-profits. That might be partly because the institution wants to offer quality programs that meet the needs of regional employers. ECPI President Mark Dreyfus says that he wouldn't run the institution any differently as a not-for-profit. "Your philosophy is the same — you're for the students. If the student succeeds, we succeed," he says. Since Dreyfus's father founded ECPI in 1966 as the Electronic Computer Programming Institute, the for-profit has expanded to offer more and more advanced degrees, mostly in health care and technology, in response to regional workforce needs.

ECPI also serves a population that's a little more affluent than those at local campuses of low-performing for-profit chains. About 47 percent of ECPI students receive federal Pell grants and 57 percent are nonwhite, according to the National Center for Education Statistics. At nearby Everest College, in Chesapeake, 68 percent of undergraduates receive Pell grants and 76 percent are nonwhite. To enroll, ECPI students must be able to perform college-level work and commit to enrolling full-time.

Students are drawn here because, unlike at a community college, they can start classes every five weeks and attend on nights and weekends. Course material is also accelerated, so an associate's degree can take just a year and a half to complete and a bachelor's can take two and a half. Students don't have to load up on courses to meet broad requirements; they only take classes relevant to the credential they want.

Students are also buying access to a professional network. Matthew Bailey, 43, knew he'd need help getting a job in a new industry. "I've built just about everything under the sun. But all those jobs are gone," he says. A farm boy who dropped out of high school and has worked labor jobs all his life, Bailey never learned to touch type but is now working toward a degree in software development. ECPI's career-services team helped connect him with a job in tech support for Web-hosting service InMotion Hosting.

ECPI's graduation rate of 40 percent for first-time college students is low by national standards. But it's twice the graduation rate at the local community college and close to the 49 percent graduation rate at Old Dominion University, the major four-year state university in the area. In 2011, ECPI awarded more computer science associate's degrees to African-Americans like Mitchell than all the public community colleges in Virginia combined.

About 45 percent of ECPI students have been to college before. Many have struggled with what Dreyfus calls a "treadmill of higher education": endlessly pursuing credits without completing them, or paying for a series of degrees that don't seem to get them ahead in the workforce. It's hard enough for recent graduates of elite colleges to find jobs, Dreyfus says, let alone working adults who don't have the education or social connections that can help get a job-seeker through the door.

"How do we get them on the on-ramp? And how do they become successful?" Dreyfus asks. "That first job is so hard to get, and so important."

Then What?

But as Bailey and Mitchell know all too well, not all jobs deliver social mobility. Federal data recently released by the Education Department show substantial variation in what ECPI's graduates from 2007 to 2009 ended up making in 2011. The data suggest that the average graduate earned about $28,000 that year, less than the national average for adults with just a high-school degree.

Graduates of longer, higher-level ECPI programs tended to fare better: Registered nurses with bachelor's degrees earned over $50,000, while medical assistants with associate's degrees earned about $20,000. Graduates of some computer science programs earned more in 2011 than ECPI would have projected from starting salaries; culinary-school graduates didn't do as well as the institution would have hoped.

Jeff Arthur, ECPI's vice president for regulatory affairs and chief information officer, cautions that the Education Department data follow students who graduated right around when the financial crisis hit — a terrible time to be looking for work.

There are regional differences, too. ECPI's internal data show that the Manassas campus produces higher-paid graduates than any other location, not because the programs are any different, but because students live in the booming economy surrounding Washington.

Comparable data are not available for recent graduates of public state colleges or public not-for-profit colleges in the same jobs in the region, which makes it difficult to assess how ECPI graduates have fared compared with peers with the same credentials and similar socioeconomic backgrounds. Student default rates for ECPI programs were lower than at other area for-profit campuses such as Everest College.

The threat of federal regulation has forced ECPI to pay closer attention to default rates and starting salaries. In 2012, a Senate committee report criticized the university for high withdrawal rates from online programs and an above-average student-loan default rate. ECPI administrators counter that online programs make up just 11 percent of enrollment, and that the student-loan default rate has dropped from 23 percent in 2008 to 15 percent today, lower than the national average for community colleges.

"It is a game changer. I mean, it really is," Dreyfus says of the Education Department's proposed standards for career programs. If programs don't keep student-loan payments before a certain share of earnings, and keep default rates low, they won't be able to enroll students receiving federal financial aid. The proposed standards would protect students by pushing institutions to charge tuition based on what students can expect to earn three years after graduation. But there's still no guarantee that a student's investment of time and money in a for-profit degree will pay off in the form of a financially rewarding career path.