NEW YORK — April 22, 2015 Human Resources managers and corporate executives involved in hiring say that the on-the-job performance of for-profit college graduates is as good as if not better than that of traditional college graduates. However, a disparity becomes apparent in that most of these hiring professionals’ companies are not willing to provide financial support or reimbursement for online courses taken at these institutions.

According to Carl Marks Advisors’ surveys, many company executives are concerned about the career longevity of job candidates with significant student debt, particularly surrounding job-hopping for higher salaries or becoming discouraged about progression in their careers. This is potentially affecting these graduates’ likelihood of being hired, despite their highly rated performance once employed.

As the cost of college education has been increasing for more than a decade — and is expected to continue to increase — these trends have significantly impacted for-profit schools’ enrollments, and thus their revenues. Coupled with high real estate expenses that weigh on colleges’ profitability, many of the for-profit institutions are in need of a restructuring and under pressure to become financially viable, while lowering costs for students and improving the quality of the education offered.

Joe D’Angelo, a Partner at Carl Marks Advisors with deep experience in advising challenged educational for-profit and non-profit institutions, commented at a recent Carl Marks Advisors-hosted event, “For-profit colleges are under pressure to improve their programs and student outcomes by innovating around education delivery and job placement services.”

College administrators increasingly believe that the Internet will be an important component of educational programs and will play a key role toward increasing student retention. D’Angelo adds, “In three to five years, almost all college students will complete at least a portion of their post-secondary education online. There will be issues along the way, but it will happen. The appeal of online education and satellite-based campuses is becoming ever more apparent.”

Notable survey findings included:
• 95% of respondents find the on-the-job performance of graduates from for-profit colleges average, above average, or outstanding.
• 65% of these companies surveyed hire candidates from for-profit colleges, but only 33% of companies surveyed encourage and provide partial or full financial support for employees to pursue online degrees from for-profit schools.
• 53% of respondents believe candidates with significant debt are likely to either job-hop for higher salaries or become discouraged about their careers and future prospects.
• 24% consider job candidates with for-profit college degrees less capable and with less career potential than those with traditional college degrees.
• 33% of all respondents consider job candidates with online degrees less capable and with less career potential than candidates who received degrees as full-time students.
• Over 50% feel that the per-credit tuition charged for online classes should be a lot lower than that for in-class learning. An additional 25% said a bit lower.

Methodology

Carl Marks Advisors conducted online surveys of 425 Human Resources professionals and corporate executives in the U.S. in February 2015 to better understand employers’ perceptions surrounding the value of online and for-profit degrees, hiring concerns, financial support for higher education, and the capabilities of graduates.