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Why Are Dropout Rates So High for Online Colleges?

written by: •edited by: Tricia Goss•updated: 11/3/2014

More online colleges seem to crop up every day. If they are so popular and successful, why aren't more adults graduating from these for-profit institutions? Learn several factors to consider when deciding on the best approach for your education.

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    Why Are Dropout Rates So High for Online Colleges? The explosive growth of for-profit colleges has opened doors for students, but it has also set traps. In 2009, 9% of all US undergraduate students were enrolled at a for-profit institution. In 2000, it was 3%. By 2020, it may be closer to 20%.

    Yet the increase in educational opportunities has not led to lucrative results for many. Students can easily end up with piles of student loans and a degree worth little or even no degree at all.

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    The Ease of For-Profit Schools

    For-profit institutions such as the University of Phoenix, ITT or Capella University will come find you. They specialize in aggressively marketing to low-income and first generation students who qualify for grants and loans. Ability to pay is a prerequisite.

    They focus on job-related education. Rather than building knowledge around a particular field, they aim to give you certification for a specific occupation. If you are pursuing a specific job, a for-profit school may get you qualified faster.

    For-profit schools are parallel to the expanding online learning field. Some exist only online. If you wish to study online only, a for-profit may be a better fit than a traditional non-profit school that is gradually adapting.

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    What Is the Priority?

    Motivation is the key to understanding most situations. Education is no different. A non-profit school exists to make powerful graduates. Nothing advertises the college better. All funds are redirected back into the institution to educate the next class of students.

    For-profit schools exist to enrich the business. If a program is not making a suitable return on investment, it will be cut or reformed. Spending excessive amounts on staff, equipment or facilities is not part of the plan.

    For the academic year of 2008-09, for-profits spent an average of $2,659 on the instruction of each student while non-profits spent $9,418. Meanwhile for-profits charged $30,900 while non-profits charged $26,600.

    Laureate, the largest for-profit educator in the world, lays off teachers as part of its business model. It earns $4 billion a year worldwide by taking over schools that are in debt. It trims fat, replaces full-time professors with part-timers and recruits thousands of new students while cutting staff.

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    What Will Your Degree Do?

    Analyze your goals before spending money on any school. If you are trying to transfer to a larger public school after a couple years of study, be sure your credits will be transferable. Many technical and art schools offer courses that will not carry over.

    What will the job market look like when you graduate? Will this education open the doors you want opened? Will the doors still exist? Some occupations come and go like fads. Remember when a travel agent or newspaper reporter was a good job? Be sure your chosen profession has staying power.

    Will your degree net a profit? Calculate the overall costs of your education and compare it to expected gains in income. Be pessimistic. You may not find the goldmine you are expecting. You may graduate in six years rather than four. Decide if your study will be worth it.

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    Will You Graduate?

    Despite your opulent dreams of graduation and career success, the statistics may discourage you. According to the Education Trust, only 22% of first time, full-time students at for-profit colleges graduated in six years. At public schools, the rate was 55%. It was 65% at private schools.

    The for-profits explain that the difference in graduation rates is due to the complex lives of their students, who often have families and jobs competing for their attention. They should not be expected to graduate as fast as traditional students did.

    Will your lifestyle change over the course of your study? Will you always have the time to study? Your priorities may shift. You may develop dreams and goals. Be sure you can stay the course for the next few years.

    For-profit students also graduated with more debt. According to the Pew Research Center, students earning a bachelor's degree in 2008 from for-profit schools were five times more likely to have over $40,000 in student loans.

    Those were only the students who graduated.

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    Between a Degree and a Poor Place

    Be sure to look deeply into your desired career and your chosen school, or you could end up like Amy Kaplan. She dreamed of being a magazine photographer and was halfway to her degree when she became disillusioned. Her instructors gave little effort. The career services were not guiding her toward a job. The school in general had over-promised and under-delivered. If she wanted to switch to a state school, her credits would not transfer.

    Already under a pile of debt, she had to decide whether to keep paying for a degree that was useless or start over. She chose the latter and, a little wiser, began attending a community college.

    This is not an unusual story. Students often start their education with a particular vision. When the school turns out to be less than they expected or the job they aspired to fizzles out, they are caught halfway to a finish line they don't want to cross.

    They drop out, shift directions and end up in debt with no degree.

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    Beware and Plan Well

    Be sure your move will net you a profit. Understand students default on their loans at for-profit schools nearly three times as often compared to students at private non-profits.

    Get to know students at your desired school. See what they say. Sometimes promises of internships, resume building and recruiters looking to make a sale exaggerate industry connections. Sometimes tuition discounts are temporary, leaving students partway to a degree they can no longer afford.

    Investigate the teachers. Are you their priority? Is teaching their full-time profession? Can they modify their curriculum or does the company stiffly enforce it? Will they teach you or just put on a movie?

    Do your homework and avoid being in debt with no degree.