Do for-profit schools ease burden on taxpayers?

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A study financed by for-profit schools has found that for-profit schools are not a drain on taxpayer dollars.

Released earlier this month, “Who Wins? Who Pays?” was the work of two groups, Nexus Research and Policy Center and American Institutes for Research. Nexus is supported by the Apollo Group, which owns the University of Phoenix, a major chain of for-profit schools, and by the private foundation of John G. Sperling, founder of the University of Phoenix.

The study looked at taxpayer money going to public, private (nonprofit) and for-profit schools. This money includes Pell Grants, a significant source of federal financial aid for undergraduates, and subsidies from state governments.

They compared those amounts to the amounts paid in taxes by graduates of these schools. Because college graduates earn more than high school graduates, they pay more in taxes. Another tax impact is that public and private colleges are tax-exempt, while for-profits pay taxes.

The study concludes that, on average, taxpayers subsidize students at public universities at a cost of $60,000 per degree and at private nonprofits at $8,000 per degree. In contrast, they conclude, for-profits add $6,000 per degree to the tax coffers.

“Strictly from a taxpayer perspective, for-profit institutions represent a better deal,” conclude study authors Jorge Klor de Alva and Mark Schneider. 


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