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For-Profit College Grads to Congress: Student Loans Are Good Investments

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Dressed in the hospital scrubs, chef jackets and mechanic suits of their professions, more than 1,000 students and graduates of for-profit colleges gathered on Capitol Hill Wednesday to tell Congress that federal loans put toward their educations are worthwhile investments.

The students rallied against a pending new rule that would eliminate federal financial aid at career colleges where high proportions of graduates are not making enough money in their new jobs to pay back their school loans.

The colleges, which include institutions like University of Phoenix, offer training for vocational careers and are attractive to many students because of their online classes, flexible hours and, for now, financial aid packages built on federal tax dollars.

The rule that would end federal financial aid at some career schools -- the so-called "gainful employment" rule -- is opposed by the schools but supported by consumer and education groups. In a news release Friday, Department of Education Secretary Arne Duncan said: "While a majority of career colleges play a vital role in training our work force to be globally competitive, some bad actors are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use."

The rule, slated to begin in November, has been pushed to sometime in 2011 because of resistance from students, the schools and the corporations who are invested in the for-profit education system. The Senate Health Education Labor and Finance Committee will hold its third hearing to discuss the issue Thursday.

At the last hearing, Sen. Tom Harkin (D-Iowa) reported that enrollment in for-profit colleges increased from 600,000 to 2 million over the last decade, causing federal financial aid to students to grow from $12.8 billion to $26 billion. A government analysis of the eight publicly traded for-profit colleges reported they spent 31 percent of profits on recruitment-billboards, TV commercials and Web ads.

Harris Miller, president of the Association of Private Sector Colleges and Universities, said Thursday's hearing won't include and student success stories, but there were several at Wednesday's rally.

John Nuss, 23, studying to be an automotive technician at Lincoln Technical Institute in Columbia, Md., said he will finish his degree in six months and has a job lined up upon graduation. Nuss said he went to Lincoln Tech because it fit his learning and lifestyle.

"I did have an option to go to a state college, but it was too expensive and this was closer to home," Nuss said. "They're also more into the field, whereas in school, they're into the books."

Kerbe Fuller, 26, splits her time between her job as a medical assistant and classes at Virginia College in Birmingham, Ala., where she earned her first degree in the medical field in one year at Virginia College. She said she will be certified as a nurse at the end of her second year.

"I found my first job within a month of graduation," Fuller said. "Our career counselor was really adamant about getting our resumes out and getting us out on interviews."

Fuller said that 92 percent of the classmates she graduated with in December of 2009 now have jobs.

Both sides of the for-profit college debate agree that job placement is the best way to measure the return on federal loans' investment. Studies by the Accrediting Council for Independent Colleges and Schools and the Coalition for Education Success report an average of 75 percent of 2009 graduates of for-profit institutions received jobs within six months.

The discussion in the Senate on Thursday will focus on whether a 75 percent job-placement rate is enough to justify the estimated $30.6 billion needed to meet the loan demand at for-profit colleges.
Filed Under: Education, Jobs, Economy

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4 Comments

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vicbar88

What a stupid thing for supposedly educated people to say! - Huge Debt is never ever a good investment. These people do not represent the "common folk" that are already oppressed by debt. I know people in their 40's who are still paying on college debt. Why is it that this country and it's government just don't get it - We do not need more debt. We do not need more credit, we need jobs and cold hard cash. And we need to take a look at the costs involved with higher educatiion a lot closer. As a parent of three students I see that there are a lot of "strange" costs associated with going to college and I question the management and regulation of that industry. I find it strange tha my kids (all three) will have to attend at least one extra semester to get their degrees when on paper they already meet the required credits to graduate on time. Another semester? times thousands of students? adds up to mega bucks and if they are not "full-time" sudents their loans become due so they have to take unnecessary classes to stay full-time. More big bucks. Seems to be some scamming going on!

October 06 2010 at 6:18 AM Report abuse rate up rate down Reply
connie997

The answer is the dirty "R" word. There is not enough REGULATION in the multi-billion dollar industry. There ARE students who learn better in these smaller "hands-on" environments, including my daughter. However, both for-profit colleges she has attended has accreditation problems. In Ohio, the Ohio Board of Career Colleges director, John Ware,is on the payroll of the Career College Association CCA and the Ohio Association of Career Colleges and Schools OACCS. The board make up is illegal, the Chairman being being a board member of a for-profit, strictly prohibited by law, no student rep for FIVE YEARS, no current member from the Ohio Board of Regents. It is ridiculous. This board approved new nursing programs for Miami-Jacobs Career College while their nursing program was under a "Consent Agreement," with the Ohio Board of Nursing OBN and now the OBN has recommended that the program be shut down. The poor students who have loans for sub-par educations have no redress except arbitration. Give the student some help with the bad schools and maybe the students can continue to receive education at for-profits. Just make sure the for-profits are actually TEACHING decent programs.

September 29 2010 at 9:40 PM Report abuse +2 rate up rate down Reply
Mike D.

Lol! This is just The big for-profits utilizing their money and fooling the students who don't know any better to stand up for them. They don't realize this act would hold the colleges accountable for scamming students. I can't wait until the truth comes out tomorrow :)

September 29 2010 at 9:05 PM Report abuse +3 rate up rate down Reply
Michael

A loan is a debt. An investment is an application of capital. Student loans eventually require capital creation for their amortization. That means jobs, the kind this administration has NOT created for graduates.

September 29 2010 at 7:49 PM Report abuse +4 rate up rate down Reply
4 replies to Michael's comment

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