Sunday, August 22, 2010

For-Profit Colleges and Student Loans

As people reading this blog probably know, the Washington Post owns Kaplan, Inc., which returns profits well in excess of those earned by the newspaper. In editorializing for the continuation of subsidized loans to private colleges that have astronomical default rates, the Post discloses its ownership of Kaplan but neglects to inform readers that Kaplan is the jewel in its corporate crown.

I'm reminded of a comment by Adam Serwer that pretty much sums up how a lot of those colleges work - and why their default rate is so high.
Universities like this make money by promising easy routes to well-paying and doable careers that in the past really never required a formal degree: those in the culinary arts, massage therapy and support staff for medical and legal professionals. The growth in these programs just take advantage of students who don't have access to traditional non-profit college degrees.

Moreover, there's no evidence it helps them. It's hard to imagine that someone with a degree in retail management will never get higher than retail management, which for the most part is not a lucrative career.
The student graduates with significant student loan debt to compete for entry level, low-wage jobs. Consider, for example, the lack of return for most students who enroll in culinary arts schools, or the anecdote recounted in this forum post about a private college instructor's candid disclosure. If it takes you two years to complete the degree program, odds are you would have been better off spending those two years working in the field and earning experience.

I'm not saying you can't learn valuable skills in those programs, but those skills won't necessarily be valued by employers. You want to start your own catering business? Great. But even then you may be better off working in the field and selectively taking some classes to round out your food knowledge before starting your own enterprise.

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