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 was tempted to go to a for profit school to get a degree, but getting a degree for graphics just isn't worth it at this point, not for what they charge. I am currently enrolled in a cheaper (50.00 a credit) school and glad I did it that way.
I'll finally get my degree for 10% of the cost it would have if I'd have gone with ITT or any school like that.
Unless you have sufficient assets to warrant a probate. the debt does die with you. It's SOP for bottom feeder debt collectors to illegally threaten family members for payment after the debtor dies.
They would have been better off getting a loan to buy tools, and learn a blue-collar trade. Machinists, plumbers etc. make some serious bucks.
As for college I'll just add this;
I used to work for a TV station in a major market many years ago. There were appox. 15 engineers in this place making anywhere from $25-$35 1970's dollars depending on seniority, experience, etc.
My recollection is that maybe 5 of them had anything that resembled a traditional 4 year degree (in electronics. One was a music major!). The rest were either military trained, for - Profit educated (ITT, IVY Tech, correspondence schools, etc) or in some cases got their skills from electronics hobbies they had in their teens.
One came in brand new and fresh faced from an ITT program and proceeded to shoot to the top of the pile simply because he had computer training when such people could not be had.
I work with a guy....retired Air Force. His 18-year old daughter came up and not only was she attending full-college but she was going the next state over, thus triggering out-of-state tuition ($25.5k a year just for tuition alone). He argued on both fronts...attend community college and attend within their state. He lost the argument via his wife.
The daughter and wife both believed that the community college effort takes away from the full effort and gives you a lesser education (community colleges are run by professors who aren’t as good as the full-up college was their argument). Plus there were these various classes which community colleges typically don’t carry compared to a full-up four-year university.
So my associate packed up and moved himself and the daughter to the next state...fifty miles from the house he owns, and he works & lives right there where the daughter is attending college. He has saved on various joint expenses and has some control over his daughter in the first year of this episode, so she’s not out partying.
I tend to believe as a minimum...a kid ought to attend the first year at a community college. What you tend to see is that a quarter of all kids going to a full-up four-year school....will mostly party and get drunk throughout the first year, and then get mostly F’s, then exit and never return to college, period. Using the local community college and making them live at home, you have some ability to monitor them and ensure they don’t do stupid things.
Those schools just consider that part of the curriculum. Techniques for post-grad application.
WPIX NY did a report this AM on the Obozo visit to Harlem. The street, to say the least, was ugly. Signs proclaiming the non war to be more or less BS etc. And a 22 yr old male person of color with a BA degree who is FURIOUS at the president for the fact that he can “only get work in a stockroom”. I think the president is in more trouble than his sycophants in the media can get him out of.
The town where I teach has a small Historically Black college. Almost all of the teacher assistants at my school graduated from there & they got such a horrible education that they can’t pass the National Teacher Exam; which is why they are an assisatnt making nothing.
About 2 years ago many of these people began starting BA & masters degrees at several of these places. Unfortunately they do not have the skills to really even have a high school degree; let alone an advanced degree. Several of the older, savvier at scams people talk about how they have no intention of paying off their loans.
It is both pathetic ( for the people who don’t have the skills & are doing this) & disgusting( for the people using the system & recycling papers others have written)................it’s such a scam, you have no idea.
The town where I teach has a small Historically Black college. Almost all of the teacher assistants at my school graduated from there & they got such a horrible education that they can’t pass the National Teacher Exam; which is why they are an assisatnt making nothing.
About 2 years ago many of these people began starting BA & masters degrees at several of these places. Unfortunately they do not have the skills to really even have a high school degree; let alone an advanced degree. Several of the older, savvier at scams people talk about how they have no intention of paying off their loans.
It is both pathetic ( for the people who don’t have the skills & are doing this) & disgusting( for the people using the system & recycling papers others have written)................it’s such a scam, you have no idea.
Sorry for the double post!
I agree. There do seem to be some abuses in the for-profit industry, but these days most “education” is way over-priced and over-promised.
You raise a good point. In fact it was one I was thinking about as I read the article. How many of these students are older? Meaning they are trying to feed the family and keep a roof over their heads...while attending these types of colleges. They may not have Mom & Dad to fall back on and their default rate would naturally be higher.
Verses those young college grads who move home...and can't find the job. They are paying their loans, but don't have to worry as much about food, rent, etc.
I would think one needs to look at the overall circumstances a bit closer before concluding the "for profit" schools are all scams.
Yep.
Yes, the days of "going off to college" and sitting there for 4-6 years are soon going to be over.
I think maybe the Republicans need to put a black man (West or other) in one of the ticket positions in 2012 in order to give the blacks an alternative to Obama.
It’s really pretty simple. Wherever government money goes, prices go up, quality goes down and those with bad intentions congregate.
There was an article posted on FR a week or so ago about how many students enrolling in these diploma mills were actually homeless.
Democrat schools( government collages ) are having trouble filling classes and harvesting more fedgov money, via ‘school loans’ will help keep the Democrat Academic Class ponzi class going. So, shutting down privated, rip off ‘schools’, will drive their sheeple customers into the government schools, along with those ‘student’s’ loan money.
( It’s about the money )
I think one difference is that “for-profit” schools (especially those whose programs are questionable enough that they aren’t accredited) have a big financial incentive to sign up students who simply aren’t college material.
Wrong.
Almost all trades, plumbing, mechanics, electrical( high and low ) use private school graduates. Truck drivers.
So for the productive working class( that get taxed to finance Queer Fem Black Psych degrees, Law degrees ) the private schools, other then the military and some unions is the way to go.
And there's the rub! We can fuss all we want about how worthless a degree is, but without it, you won't get an interview, or a job in many industries.
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