Private sector career colleges are providing value to students, producing higher income gains and the same or better success rates than public two-year colleges, while serving proportionately more high-risk students, according to a study released today that analyzed government-collected data. The study also found that private sector capital investment in educational facilities and equipment is nearly $1 billion a year and enrollment is growing five times faster than public sector community colleges.

A comprehensive analysis of Department of Education (DOE) statistics by The Parthenon Group’s Education Center of Excellence found that graduates of private sector post secondary colleges achieve a $7,900 annual income gain or $250,000 over a 30-year period. This equates to an average income gain of 54% compared with 36% for graduates of public colleges. The analysis focused on students enrolled in programs of two-years in length or less.

“Much of the discussion surrounding the value private sector colleges provide to students has been driven by conjecture and anecdote,” said Robert Lytle, partner and co-head of Parthenon’s Education Center of Excellence. “Our analysis of the Department of Education’s own data found that, in fact, most private sector providers do a better job graduating students and delivering significant income gains at a societal cost comparable to public institutions.”

Private sector schools also achieve graduation rates more than 20% higher than public institutions, the government data show. The data demonstrate that, contrary to the most frequently voiced criticism of the private sector, graduates of private sector schools obtain marketable skills that convert into job opportunities offering salaries sufficient to pay off the debt students incur. The study was undertaken with support from Corinthian Colleges, a private sector education company, in an effort to help inform the discussion about private sector post-secondary education and outcomes. Full details of the Parthenon analysis are available at http://parthenon.com/tlcategories/EducationCenterofExcellence

Parthenon’s findings are especially timely as the nation struggles to regain economic momentum and stimulate employment growth. Post-secondary education is recognized by all parties to the debate as vitally important, especially for students characterized by DOE criteria as “high-risk,” which include students who are financially independent, are low income or unemployed and single parents. Parthenon’s analysis shows that private sector post-secondary schools actually enroll a higher percentage of “high-risk” students than do their public sector counterparts. Further, for minority students, the graduation rate at private sector colleges is almost double that of public two-year colleges. Overall, in terms of success rates – defined as graduation, certification or transfer to a four-year college – the DOE data support the Parthenon conclusion that private sector colleges surpass public sector schools 69% to 62%.

“The research confirmed what we already know from experience,” said Jack Massimino, Chairman of the Board of Corinthian Colleges. “Private sector education provides greater access for minorities and other at-risk students and helps these students graduate and find careers in their fields of study. For many of our students, public sector schools are often unable to offer the educational opportunities in a format or schedule that allows them to participate, let alone succeed. We hope the Parthenon analysis facilitates an understanding of the vital role that private sector institutions play in providing access for students in need and in meeting the demands of the labor market.”

The Parthenon analysis relied on three primary government data sources:

• NCES Beginning Post-Secondary Survey (BPS), which is a longitudinal study of 19,000 students from both public and private schools who were followed for 5 years. It records hundreds of variables including student outcomes in terms of employment status and income;
• Integrated Post-Secondary Education Data System (IPEDS), a survey of 7,000 colleges, universities, technical and vocational post-secondary institutions reporting statistics ranging from enrollment, completions, revenue and expenditures on an annual basis;
• National Post-Secondary Student Aid Study (NPSAS), which is a collection of student financial aid data from 114,000 students at 1,600 post-secondary institutions plus data from institutional records and government databases for the 2007 – 2008 school years.

Completed in January 2010, The Parthenon Group’s analysis represents the most current assessment of the government’s own data. These data were used primarily because they represent the best source of valid and verifiable information that can provide a baseline for discussion of post-secondary educational opportunities. It was considered especially relevant to assess the government’s data at the same time President Obama’s 2020 College Attainment Goals call for five million more post secondary graduates in the next decade.

About Parthenon Group

The Parthenon Group is a leading advisory firm focusing on strategy consulting for a variety of industries. Its Education Center of Excellence, which conducted this analysis, dedicates management and team resources to ensure the company’s global expertise extends across public sector and non-profit education providers, foundations, for-profit companies and service providers and investors.

About Corinthian Colleges

Corinthian is one of the largest post-secondary education and training companies in North America. As of December 31, 2009, the company had 106,000 students enrolled in 117 schools in the United States and Canada, including 20,000 exclusively on line students. Corinthian has approximately 15,000 employees including 5,200 full-time and part-time faculty members and 700 career placement counselors.