Posted on 03/29/2011 9:46:30 PM PDT by TheDingoAteMyBaby
TAMPA - Westwood College representatives questioned Becky Loring about her hopes for the future. And when she wavered — worried about whether she could afford the $45,000 program — the recruiter used Loring's own words to seal the deal.
"If you don't do this," she recalled the representative saying, "you're never going to get what you've always wanted."
Loring, 32, now owes the government and private lenders more than $100,000. Working in sales, she is far from the graphic design job she studied for, barely able to make her college loan interest payments.
"When I think about it, I just feel nauseated," she said. "How did I let this happen?"
Students such as Loring are borrowing billions from the government every year to attend for-profit career colleges, where enrollment nationwide has tripled in 10 years.
Loring is working with her lenders to keep from defaulting, but she's on the edge, she said.
Meanwhile, tens of thousands of others have gone over, a recent federal report showed.
Of the career college students whose federal loans came due in 2008, nearly 25 percent quit making payments in the three years that followed. Taxpayers are ultimately responsible for paying off bad federal loans.
Default rates for some local colleges were even higher. The report showed Everest University in Largo with a three-year default rate of more than 41 percent. The Tampa branches of ITT Technical Institute and Concorde Career Institute were at nearly 30 percent.
By comparison, the rate for private nonprofit colleges and universities was 8 percent. For public institutions, it was 11 percent.
People have poured into the for-profit colleges in the past few years on federal student loans, searching for new careers in a weak and changing economy. But as the loan defaults rise, government regulators are trying to rein in the rapidly expanding schools — and facing protests from the industry.
People who are close to the issue disagree about what a high default rate means.
To critics of the for-profit college industry, it's a sign of a poor-quality school that will say anything to snag new students, manipulating their hopes and shading the truth about accreditation and job prospects.
To industry defenders, it shows these schools open their doors to people who have trouble in traditional colleges, who are often poor and struggle to pay their bills, especially during a recession.
The report on default rates is preliminary. Congress established the calculation in 2008, saying colleges with loan default rates of 30 percent and above for three years would risk losing their federal aid eligibility beginning in 2014.
Students are required to start paying back loans after they graduate, though many appeal to lenders to delay repayment. The recent report looked at students with repayment dates starting in 2008 and counted those who defaulted on those payments over the next three years. The number was more than 457,000.
Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee, held hearings last year into what taxpayers get back from the billions the government gives to for-profit colleges. The figure was nearly $30 billion last year.
For-profits enroll about 11 percent of all college students but account for about 45 percent of all student loan defaults.
"Serious questions have to be raised about the taxpayer investment in these companies," Harkin said.
Nationwide enrollment in for-profit colleges is about 1.8 million students.
A stretch of Dr. Martin Luther King Boulevard west of Interstate 75 tells the story. On one corner is Rasmussen College. A mile west is a branch of Southwest Florida College, next to a branch of Everest University.
Complaints have grown with the numbers. Witnesses at Harkin's hearings last year told of colleges exaggerating job prospects, fudging financial-aid applications and leaving graduates with heavy debt and few opportunities.
In October, the U.S. Department of Education released new industry regulations scheduled to go into effect in July. A trade group has gone to court to stop them.
The dozens of changes include requirements to:
•Cease paying admissions representatives on the basis of how many students they enroll.
•Provide easy-to-find job placement statistics by program, using methods verified by an outside agency.
•Require states to regulate all colleges with any students in the state, regardless of whether they have a branch or employees in the state.
For-profit representatives aren't happy with how the rules came about.
It was "the most biased process I have ever seen," said Kathy Mizereck, executive director of the Florida Association of Postsecondary Schools and Colleges. The group's 900 for-profit schools and colleges have about 370,000 students.
The Harkin hearings were stacked with opponents of the for-profit college industry, she said. And bad things happen in every school, she said.
"I got a call the other day about a community college student who had $90,000 in debt and had nothing to show for it."
The most controversial proposal to emerge last year, the so-called gainful employment rule, has yet to be released in final form.
It's a process intended to ensure students can repay their loans, taking into account the students' income, debt load and potential employment. The complex calculation also includes the loan repayment rate by students from each college.
A low score could limit a college's federal loan eligibility.
The industry is lobbying hard to modify the final rule, which is expected to come out any day.
"We've been told there's going to be a very, very big revision," said Kent Jenkins, vice president of the Everest College parent company, Corinthian Colleges, based in Santa Ana, Calif.
Florida has imposed its own new rules, said Samuel Ferguson, executive director of the Commission for Independent Education, which monitors for-profit colleges.
Admissions representatives, for instance, have to go through a training program in what they can and can't say to prospective students, he said.
But students also have a responsibility to ensure that a program is accredited and meets their needs, he said.
Cassandra Perry, 24, learned her lesson when she attended ITT in Virginia and couldn't get other colleges to accept the credits she earned there, she said.
After she and her husband moved to the Tampa area, she chose the University of Phoenix, partly because it had a more widely accepted accreditation.
She worked during the day and went to class at night.
"My classes were small. It's like we were a family," she said. "This has worked out perfectly for me."
Graduating in June with a bachelor's degree in psychology, she has applied to the University of South Florida's graduate program.
It's selective, so she doesn't know if she will make it, but she's counting on USF accepting her University of Phoenix degree, she said.
Becky Loring thought she did her homework when she picked Westwood when she lived in Seattle in 2006.
The admissions representative assured her Westwood, owned by Alta Colleges Inc., based in Denver, Colo., was accredited by a national agency recognized by the U.S. Department of Education.
Loring had always loved design and liked the description of Westwood's visual communications program, which she could complete online.
But the $45,000 price tag made her nervous.
She said the admissions director told her not to worry, that she would make at least $70,000 a year no matter where she lived because she could easily work from home.
Loring got a federal loan for $60,000, but that wasn't enough to cover her college costs and living expenses, she was told, so Westwood helped her apply for private loans.
The school refused to accept several credits from an online college she attended earlier, contrary to what the Westwood representative had told her.
Her costs continued to rise when she had to buy expensive equipment and software, and pay online fees, so she borrowed more money and pushed on, committed to finishing.
She moved to Sarasota and graduated from Westwood in 2009 with mostly A's. She built what she thought was a solid portfolio, including fliers, brochures and booklets with logos and other elements she had designed.
"I was so excited," she said. "I did not take advantage of my education in high school, so in college I was determined to apply myself and do my absolute best."
She put out dozens of résumés, she said. No response.
Maybe she needed more education, she thought. But when she began looking into the state universities, she realized she was in trouble. Admissions representatives told her the Westwood degree didn't count for them.
Though Westwood was accredited, it wasn't accredited by an agency they recognized.
"I had a clear path and I thought I knew where I was headed," Loring said. "Now it's like I'm swimming in murky waters."
She contacted Tampa law firm James, Hoyer, Newcomer, Smiljanich & Yanchunis after seeing a television news report about problems at Westwood. The firm is suing Westwood.
A Westwood spokeswoman, Emily Port, questioned Loring's assertion that she was told she would make $70,000 a year.
A company website shows that 77 percent of its visual communications graduates are employed in their field of study, but the average reported salary is $35,000 a year.
Port also said the company informs students about program costs and the risk that not all colleges will accept Westwood's credits.
Loring stands by her recollection of the assurances she received regarding credit transfers and job prospects, but she blames herself for believing them.
She is one of nearly 1,200 students who have contacted James, Hoyer with complaints about Westwood. Most of them are struggling with tens of thousands of dollars of debt, said attorney Jonathan Cohen.
The firm also has received hundreds of complaints about other for-profit colleges. Their stories are often the same.
"They start out so proud and end up buried in debt with a piece of paper that doesn't mean anything," Cohen said.
More than 180 Florida students have complained to the state attorney general about their experiences at for-profit colleges.
"I was counting on a degree to help with a promotion in my career and I got nothing but debt," wrote Kimberly Bramblett of Crawfordville about her experience with a Kaplan online program.
"Please help me," wrote Janet Ayala, who borrowed $8,000 for the medical assistant program at Everest in Lakeland and can't find a job. She was wary of taking on the debt, she said, but Everest representatives were persistent, calling her every day at one point.
Jenkins said Corinthian has become more cautious about enrollments. It has stopped accepting students who don't have a high school diploma, and its short-term default rate is declining.
It was not an easy decision to start saying no, he said.
"These are students who have nowhere else to go."
I don’t understand why a student can’t attend a regular community college for two years and then transfer to the state school. Normally if you complete the community college with decent grades (2.0), the state school will accept you pretty “automatically”. However, you would probably have to attend one of the satellite schools throughout the states and perhaps not main campus. But it still seems smarter to do than what these folks have been doing.
If all student loans were privatized, people majoring in marketable degrees like nursing and engineering would be paying about 3%. People majoring in women's studies and similar fluff would be paying about 30%. The market would build in the risk of default according to the value of the degree and price the loans accordingly.
I don’t have the source. I have read it here from other Freepers whose children have been caught up in loans. One her daughter is dying, they took her house, but the mom states that this is the case. Another is a Freeper whose mom got a loan when he was 17. His mom dies many years ago. This year the IRS took his refund to pay for his mom’s loan.
Apparently, death does not discharge the obligation.
If you find it, it would be good to have. But I find it hard to think more than one person here would just dream this stuff up.
See post #23
The law-school scam is far bigger than anything these for-profits could dream of. Tuition approaching 40k a year at third tier schools and lies by nearly everyone of the law schools about salary and employment percentage.
Also, my understanding of my loans (grad plus loans) is that unless I die, the only way out is repayment, so I do not know what these “defaults” are.
Colleges, by and large, are a scam. You place an overworked & underpaid TA in front of a bunch of dull undergrads, while some faculty talks and talks about a topic that he has recycled from years past.
Each undergrad is worth 10’s of thousands of $$ in tuition, per year, a number the administrative staff can multiply by as many as the admissions committee allows them to. Nothing tangible is produced, at the undergraduate level.
Your post 16: “In fact, they now will fall unto any children the borrow[er] has, until it is ALL paid back.” implies that the borrower’s children are liable for their parent’s student loan. That is not correct.
Also, a parent is not responsible for a child’s student loans unless the parent cosigned for the loan.
“she is far from the graphic design job she studied for”
Ok there are somethings you can learn online UOP style and some you can not. Graphic Design, creative type courses=fail...
Besides fields like ‘graphic design’ are as useful as majoring in piano. Yes there are jobs out there but few and far between.
If I ever get bumped out of the IT space by all the out sourcers and need to ‘re-tool’ I will look into education, a heath care field, or a trade (pipe fitting)... None of them get you rich but its usually doable to find a job..
There is little doubt that these schools (like UOP) are nothing but paper factories and that, in and of itself, is a bit scummy. But it’s not illegal..
Chances are for the same amount of money this Girl could have enrolled part time in a local community college or university and gotten a better education for less.
Easy Answer: Make universities with a default rate of more than 15% over three years co-sign for loans until they fix the issue..
Let’s put UOP on the hook for taking students who have no business working toward a masters..
They aren’t? A huge % of their loans end up falling on the tax payers!
HTR I did one year of UOP when it was on the company dime... It was a joke! As soon as I left for a company which did not pay I hug it up.
Most of these places *especially the online ones* are scams. And if they want to scam people for a piece of paper thats fine but no federal student loans should go out to places like this.
Let them self fund or co-sign private loans for their students.
They write this as if this only happens with for-profit vocational colleges.
Every democrat is out there (and some republicans) talking as if college is a right, and it will solve everyones problems.
I know a lot of people that are in debt to plain old liberal arts colleges, including state ones.
The problem is our entire educational system is broken. College has been taken out of the place it should be (as a place to truly educate) into some sort of cure-all for an unhappy life.
Also by privatizing loans deals can be worked out.
Being in hock for a student loan is worse than being in hock to the IRS. They never let you off the hook.
Have to disagree with you there, at least in the degree is from a good school like Rhode Island School of Design, Art Center, or a good public school. Ad agencies, design firms, architects, industrial design consultants, and companies that design in house all need graphic designers. If my business continues to pick up I'll need to hire one. Not sure how great the job market is right now for recent grads, but overall your comparison= fail!
I remember being a computer science student, sitting in C++ class, thinking, “gonna work hard, make money, own a house”...whoops, looks like those programming jobs went overseas!
Along with everything else. Companies figured out they could get away with murder in China/India/Mexico, so they expanded there, downsized here.
Such heroes.
If we got the government out of the loan guarantee business this problem would be solved.
Lenders would only lend if they had a reasonable chance of being paid back.
“Students” with poor prospects would have a hard time getting a loan. They’d have to forego their crummy college or save up to go.
“Universities” that don’t give a quality, marketable degree would rapidly fold.
So, whose the “predatory lender” now, eh> Why it’s the education industry.
This article has what I think are a few misrepresentations. One is that taxpayers get stuck with the bad loans, at least for the federal student loan program. That was the case for a very long time, but within the past 10 years or so, the law was changed so that those students will, at some point in their lives, have to pay them back. They are loans that do not go away. The govt will collect if they have to garnish any income the student makes.
I also found the industry rep’s story about a community college student having $90K in loans unbelievable. That is $45K/year for a 2 year program? Most community colleges charge @ $100/credit. Few students carry more than 15 or maybe 18 credits in a semester. So, let’s say a student is carrying 18 credits for three semesters, and let’s say s/he attends a more expensive community college that charges $150/credit. That’s $8100. Throw in $1200/semester for books and another $1K for activity fees. You’re up to $12,700. But the govt is lending this student $45K ?? That’s a pretty healthy amount left over for living expenses.
I think there ARE restrictions on how much the govt will lend a student, based on the school’s tuition and costs. They also require that the studies be concluded within X amt of tim, something like 150% of the time it takes under ideal conditions (full time, no dropping classes, changing majors, etc). So that $90K debt from community college story just doesn’t add up.
Given the offerings at Community Colleges, I can’t imagine why a student would go to one of these expensive for-profit programs in any case. At least our community colleges offer an enormously broad program of studies. And in VA, and most other states I’ve heard of, the state universities’ 4 year schools will accept a graduate of the community college, with certain requirements that the four year college sets. Some of the 4 year school require a higher GPA than others; some are fussier about which credits they will transfer, etc. But it sure sounds like a community college grad will have better prospects after completion than the students featured in the article
So many of the schools really are scams. Drag some student in that can barely read and help them get loans and grants. When the money runs out suddenly the “student” read “mark” has failing grades and it’s out the door with no more money, no training, no job and none on the horizon.
But the debt lives on and on and on.
My nephews daughter just finished her work and had a job before she graduated, starting at about 80,000 per year and they have agreed to pay her school costs after four years. It is all in what you get that degree in.
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