Affinity Credit Union

For-Profit Colleges: Study Up Before You Enroll

by Jennifer Garrett



Constance Brown definitely learned the hard way. Like many Americans, she wanted to improve her earning potential. So when the 28-year-old Floridian found a program to train her to become an ultrasound technician, a career with an average annual Florida salary upward of $50,000, she didn't hesitate.

Brown graduated two years ago. She still hasn't found a job in the field. After she enrolled in and made the first payment of her $35,000 tuition—of which she borrowed $30,000 in a combination of Pell Grants, Stafford Loans, and private loans—to Sanford-Brown Institute, Jacksonville, Fla., she learned that the program wouldn't prepare her to sit for her registration exam until she'd worked for a year.

But Brown, who works in surgery scheduling in a local hospital, also discovered that most hospitals won't hire techs until they're registered. So she's trapped in a catch-22: She can't get a job because she's not registered, but she can't get registered because she can't get a job.

It didn't have to be that way. Midway through her training, Brown met students who were studying at other schools and who would be eligible to take the registration exam upon graduation. The difference was the accreditation.

Overpromised, overpriced

Brown's advisers assured her the school was accredited, and it was—but its accreditation wasn't recognized by the American Registry for Diagnostic Medical Sonography, the body that regulates the ultrasound profession. To add insult to injury, Brown also learned about another local program that not only was properly accredited but also charged tuition of $3,500—a fraction of the cost of her meaningless degree.

"I wish I would have known that up front," she says. "I would have gone to another university."

Now Brown is doing just that. She is enrolled at Florida State University in Jacksonville, studying X-ray therapy. She's repeating courses like math, English, and anatomy because none of her credits transferred, more fallout of the faulty accreditation.

"They did say that it was a possibility," Brown says, "but I didn't think I was going to have to go back to school, either."

Susan Lehr, vice president of government relations at Florida State College in Jacksonville, says she hears story after story about students like Brown with mountains of debt and worthless degrees. "Those debts will follow you your entire life," she says, noting that the government can garnish wages, tax refunds, and even Social Security payments to collect on student loans. "This is a very serious matter."

It gets even more serious when you consider who ultimately foots the bill for the defaulted loans. The federal loan dollars flow from the government, through the students, to the schools, and, ultimately, into the pockets of the institutions' corporate shareholders. When students default, the schools aren't the losers. "The taxpayers are paying that debt," Lehr says. "The institutions get their money first."

Of course, not all students at proprietary schools end up like Brown. Hannah Brown (not related to Constance Brown), a recruitment specialist at Front Range Community College in Westminster, Colo., has met with many students who have considered proprietary schools as well. She says some students consider the for-profit route because of the convenience. Programs often start every few weeks instead of once a semester. Accelerated timetables along with online, evening, and weekend classes can lead to faster degree completion. Lax admission criteria make programs available to anyone willing to pay. "These things might be a priority for the student, so they don't always consider other aspects like regional accreditation, lower cost, and smaller class size, which a community college provides."

Students at for-profit colleges make up 7% of total national enrollment, but account for 44% of educational loan defaults.

More than the ease, though, Hannah Brown attributes the interest to marketing and basic awareness. "Some of it is name recognition," she says. "Students know about the other institutions because of the commercials and billboards, which public institutions don't always use or have the money for."

Disproportionate defaults

While Lehr acknowledges that some students are happy with the for-profit schools, she points to the student loan default rate at proprietary institutions as evidence of a grave problem. The Institute for College Access & Success, a California nonprofit advocacy organization, reports that students at for-profit colleges make up 7% of total national enrollment, but they account for 44% of educational loan defaults. Also, students at for-profit schools are more likely to borrow for education, and they borrow more than any other cohort. "The numbers," Lehr says, "speak for themselves."

Edie Irons, communications director for the Institute, says the federal government plans to step in. Later this year, the Education Department will issue new rules regarding for-profit educational institutions. The new regulations could make it harder for schools to offer programs that won't adequately prepare students for careers by making those programs ineligible to receive federal student aid monies. "It's an effort to weed out programs that overpromise, overcharge, and underdeliver," Irons says.

Other programs at risk are those with tuition grossly disproportionate to the earning potential of its graduates. Lehr says the changes are due. "If you're going to be a nurse's aid, you shouldn't be able to borrow $50,000 to get a job that pays 50 cents above minimum wage."

Before you enroll

In the meantime, there are ways students can protect themselves:

Web sites to visit

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Published August 23, 2010



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