There have been numerous criticisms of higher education in America. On top of the list is the student loan debt. According to WSJ.com, the average debt of class 2015 is more than $35,000. But beyond that, there are other issues that we need to look into – most of which leads to the confusion of incoming college students.
While some of them can be argued there is one fact that can’t be – and that’s the number of educational options available. There are state universities, private universities, private colleges, for-profit colleges, career schools and community colleges. And within these options, there are literally hundreds of different choices.
However, among these options, the one that has become the most controversial is for-profit schools. The government basically shut down one of them, Corinthian Colleges. This was per the website NPR.org, which stated, “Corinthian Colleges will shut down all of its remaining 28 ground campuses, displacing about 16,000 students, less than two weeks after the U.S. Department of Education announced it was fining the for-profit institution $30 million for misrepresentation.”
The basic problem
The basic problem of for-profit colleges is that they operate mostly to satisfy the demands of their investors and shareholders and not their students. The federal government, the media and states’ attorneys generals have investigated the for-profit schools and found numerous instances of unscrupulous behavior including deceptive, manipulative and aggressive tactics designed to enroll as many students as possible without regard for their potential for success or their ability to pay the tuition. This is especially true of those schools that are operated by big, publicly traded companies.
The harsh truth
The for-profit colleges and universities would not have been successful in luring students except for one thing – government-backed student loans. These loans are relatively easy to get, the money goes to the for-profit colleges and it’s the students who get stuck with the bill if they drop out or are unable to get the jobs they had been promised.
It gets even worse
The news has gotten even worse thanks to a study done by the University of Missouri. What it found was that students of the for-profit colleges would have been better off getting degrees from community colleges. The reason for this is because, believe it or not, students from both these types of schools have similar job prospects – despite the vast differences in what their educations cost.
How the study was done
The University of Missouri researchers created fake resumes for job applicants that had a community college degree, a high school diploma or a for-profit college degree. They then set out these resumes in response to ads for positions in customer service, information technology, sales, administrative assistance and medical assistance. The calls they received from employers asking about candidates that had degrees from for-profit colleges were just about the same as for those who’d graduated from community colleges. What makes these findings so important is because for-profit colleges always cost a lot more than community colleges. In fact, their tuition can be five times higher than that of community colleges. And according to Cory Koedel, on economics professor at the University of Missouri who co-authored the study, “When people are weighing their higher education options, tuition cost and the ability to gain employment after school should be considered heavily.” What this translates into is that if you will need to finance your education it’s critical to know that you’ll not only find a job after school but one that will pay well enough to support your student loan payments.
The students of for-profit schools end up taking on a big burden of debt. According to a study done by the Department of Education about 13% of their students that earn higher education degrees represent about 31% of all student loan borrowers and about half of those the default on student loans.
If you default on a student loan the consequences can be severe. Your entire unpaid balance and any interest would be immediately due. You would lose your eligibility for forbearance, deferment, and repayment plans and for any additional federal student aid. Your delinquency would be reported to the credit bureaus, which would damage your credit rating. In turn, this would affect your ability to buy a house, a car or even get a credit card. Your state and federal taxes could be withheld through what’s called a tax offset. This is a shorthand way of saying that the IRS could take your federal and state tax refund to collect on your defaulted debt. The amount of your debt will increase due to the late fees, court costs, collection fees, additional interest, attorney’s fees and any other costs associated with the collection process. And last but not certainly least your account could be assigned to a collection agency, which could then garnish your wages. If you do not do something about it, you could end up compromising your financial future. While there are debt relief options like debt consolidation that can make payments easier, it has to be said that you do not have to put yourself in this situation in the first place.
The bottom line
Since according to this study there is no significant difference in generating employer interest between those that have community college degrees and those that went to for-profit schools, here’s the bottom line: Go to a community college. You could get the schooling you need at a fraction of the cost of attending a for-profit school and your job outlook will be just as good. You might even do as many adult learners have done and that’s choose a community college offers occupation-oriented degrees. These are what are called associate degrees and their purpose is to help students acquire specific skills and knowledge in preparation for a particular career path. The degrees typically offered by community colleges include Associate of Applied Science (AAS), Associate of Applied Arts (AAA), Associate of Occupational Studies (AOS) and Associate of Applied Technology (AAT).
Finally, you could choose a trade or vocational school where you would be taught skills specific to a certain job. This could include anything from film and video production to nursing assistant or from floral design to ASE certification. Most of these vocational schools have very reasonable tuition rates and offer some form of financial aid. Plus when you complete your studies you are almost guaranteed a job – unlike those that graduate from one of the for-profit schools where it’s quite possible they won’t be able to find a job in their field of study.
Finally, here’s a short video that could help you decide whether or not to choose a vocational school.