North Carolina for-profit colleges are graduating students with more debt and without the job prospects to pay the money back, according to a new report from the Durham-based Center for Responsible Lending (CRL). CRL’s report analyzed both debts and outcomes for those attending a wide range of higher education institutions include public, and private for and non-profit colleges and noted some trends that point to serious questions about for-profit colleges. 

According to the report, for-profit students are graduating with more debt, are less likely to be able to afford their debt, and are disproportionately African American compared to public and non-profit private higher education institutions in North Carolina. Specifically, “Students at the 2-year, for-profit institutions graduated with 170 percent - $16,533 – of the debt load of comparable 2-year public colleges at $9,728.” While 30 percent less of for-profit college borrowers can afford their loan repayments compared to North Carolina’s public institutions.

Besides the debt these programs leave their students, they also have lower attainment rates than their public and non-profit counterparts, including both graduation rates and licensures. 

The report highlights a series of investigations into for-profit colleges by the Attorney General’s Office. Many students have been misled into taking unlicensed programs or stripped the licenses upon failure to meet state requirements. In many instances, the investigations led to students being repaid by the for-profit colleges.

CRL offers several statewide policy recommendations to help combat the predatory practices of these institutions, and help students separate good programs from the bad:

  • Improve oversight of for-profit schools by requiring the institutions to report on how much they spend on tuition compared to other spending such as advertising and salaries.
  • Strengthen reporting requirements – particularly for for-profit schools - that track accreditation, licensing, graduation, drop-out rates, loan indebtedness, loan defaults and other measures that together reflect what an educational investment in these institutions will provide.
  • Use objective data to shut down poorly performing schools and support those that well-serve their students.
  • Increase funding and support for HBCUs that prioritize spending on student instruction and success.

In addition to these recommendations, CRL also explores state-level student loan servicing reform—a growing trend among the states.