Tyler, interesting post. I think the answer to the question also depends on what is meant by VPN.
Sometimes proxy servers are described as VPNs. In this case, ISPs can indeed still see users traffic in and out of the internet, and in any case, can only affect traffic in and out of the proxy-connected application on the device, probably the browser.
A true VPN is an encrypted tunnel from the PC or other device to another network, with the effect that the device of the user appears as if it is on the other network. When active, all internet traffic in and out of the device, to/from all applications, is encrypted up to the endpoint.
The usual use of VPNs is to protect the data of members operating from remote locations on the private intranets of organisations, such as governments and private companies.
An ISP can determine nothing about this other than maybe a user is using some form of VPN.
Some ISPs, especially the lower priced ones in the UK, actually prohibit the use of internet VPNs, as their business model depends on being able to target users with ads. To do that effectively, they need to be able to monitor users internet behaviour.
I am lucky enough to be able to use a VPN most of the time and find it is an infinitely better experience with, than without. One can select from a large list of countries to have as entry point to the internet.
As a researcher using a VPN, I get a totally different experience using search engines like Google, as I can select which country I wish to appear from, and get entirely different sets of results from the same search, from one country to the next. So we can see that many Search Engines are themselves just targeted information systems. If you wish to get a whole view of a topic, you need to be able to search for it in a way that is not dependent on being in any particular country, so a number of searches, from a broad spectrum of countries is often needed.
Further, VPNs can enable people to work independently of whatever political restrictions might be in place to restrict traffic, such as embargoes and censorship. I found this useful myself when working in Cuba, which was blocked by Amazon, (The main carrier of most internet traffic). Without a VPN, one can send and receive very little data from within Cuba.
The only way a third party could still access private data on a VPN enabled device would be if there was some kind of server on the device, advertising access to that data, from wherever the endpoint was. I guess this could be possible using a backdoor to the operating system, or another application, or even the VPN application itself.