Working Paper 87
Promising or Predatory? Online Education in Non-Profit and For-Profit Universities
Published March 2023

Online education is a rapidly growing segment of the postsecondary system, and recent growth is concentrated at non-profit universities. Research shows that Black and low-income students are disproportionately represented in online programs; however, research on the outcomes of exclusively online education, especially at four-year non-profit universities, has been limited. Two narratives have emerged about the consequences of the access that online education provides: one describing it as promising, and the other describing it as predatory. We harness both institution-level data and individual-level data to intervene in this debate. We show that online education is related to worse educational outcomes in non-profit and for-profit sectors, including lower retention and graduation rates. A sensitivity analysis suggests that selection into online education is unlikely to explain these results. Attending online is also related to some less desirable student loan repayment outcomes across sectors. Our results suggest that online education is a form of “predatory inclusion,” in that access is coupled with increased risks for students relative to comparable peers attending in-person. In light of our findings, we propose that the provision of online education by for-profit entities—even in the non-profit sector—may play a central role in producing poor student outcomes.

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