For-Profit School Overview
It is often our advice that rarely does the undergraduate school you attend significantly impact your earnings and life afterward. However, in light of the recent activity going on with Everest and Corinthian Colleges, for-profit schools are finally coming under the scrutiny they deserve. The CNN Article provides powerful examples of how students were promised career services help and a job market from a given degree, but when they graduated from the for-profit school, they were left without a job and crippling student debt.
These stories are absolutely heartbreaking and the statistics around this industry are equally troubling. A recent Senate Committee Report exposed the poor practices of for-profit schools (e.g. ITT Education Services, DeVry, Kaplan, Apollo Group, Corinthian). Some important statistics that parents and students should know regarding for-profit schools include:
- There was a 64% dropout rate among those seeking Associate Degrees
- They spent nearly 25% of their revenue on marketing
- The costs are nearly 4 times what a similar degree would cost at a community college
- Out of the total students that default on student loans, 44% of student loan defaults come from for-profit schools
Here at EDUsquared we do think there is validity in some technical and vocational schools and it certainly makes sense for some individuals. Yet when looking at the results, we find very little to be desired. The problem is not necessarily the skill set or the degree you get – it is the loans. Put simply, the cost of these schools is abnormally high largely because of the trade off they provide. Anyone and everyone can go there, as long as they are willing to pay the price. We don’t have to tell you about the dangers of high student loans, as we consistently stress them on this site.
We also stress, time and time again, that there are two parts to our program and our courses. First is figuring out your degree and the likely career field (a list of all the best majors can be found within our program as well as a simple Google search). Second is figuring out how to ensure that you limit your debt to something you can actually afford. When the cost of a degree far outweighs your potential earnings (our golden rule is to take no more debt than your first years’ salary), it becomes unjustifiable to attend these universities. Do not fall into the trap of just being happy you got into a particular school. Community colleges exist for a reason and should be used judiciously to reduce the overall cost of your education. More importantly, you must learn how to pick a major, how to pick a school, and how to reduce student debt specific to your circumstances. Understanding these key aspects will make the college experience much more enjoyable and much less burdensome later in life.