Study: Students at nonprofit colleges have only 50-50 chance of graduating

Students who start at four-year, nonprofit colleges only have about a 50-50 chance of graduating, according to a new report released Wednesday.

Third Way, a centrist think tank in Washington, studied students with loans at the colleges and found what it called “stunning levels of institutional failure.”

{mosads}The report said private schools graduate only 55 percent of full-time freshmen with federal student loans within six years of enrollment, and students who fail to earn a degree within six years are unlikely to finish at all.

While colleges tout their programs as a path to a brighter future and a bigger paycheck, the report found just 63 percent of students earned yearly salaries and wages that exceeded $25,000 six years after graduating.

Of the 465 four-year private, nonprofit schools that have more than 38 percent of students receiving Pell Grants — aid for low-income students — only 27 percent graduated more than half of their loan-holding students within six years. Two-thirds of those schools had more than half of their students earning over $25,000 six years after graduation.

“This degree of institutional failure goes well beyond the current discussion about rising tuition costs to the very essence of what colleges spend billions of dollars purporting to do: provide an education worthy of the time and cost associated with it,” wrote the report authors Tamara Hiler, Lanae Erickson Hatalsky and Megan John. “And this analysis begs the question, what can be done about the quality crisis in our nation’s colleges?”

In its recommendations, Third Way said schools should have a “skin in the game” and be required to pay back some fraction of the federal loans their students cannot repay, at a rate which can be adjusted based on the nature of the student body at particular schools. 

It also suggested schools with graduation rates below 67 percent be forced to develop and implement a plan to increase student completion and that high-performing schools be encouraged to accept more low-income students.