Korean Job Discussion Forums

[madoka]

http://finance.yahoo.com/college-education/article/109081/in-hard-times-lured-into-trade-school-and-debt

One fast�growing American industry has become a conspicuous beneficiary of the recession: for�profit colleges and trade schools.

At institutions that train students for careers in areas like health care, computers and food service, enrollments are soaring as people anxious about weak job prospects borrow aggressively to pay tuition that can exceed $30,000 a year.

But the profits have come at substantial taxpayer expense while often delivering dubious benefits to students, according to academics and advocates for greater oversight of financial aid. Critics say many schools exaggerate the value of their degree programs, selling young people on dreams of middle�class wages while setting them up for default on untenable debts, low�wage work and a struggle to avoid poverty. And the schools are harvesting growing federal student aid dollars, including Pell grants awarded to low�income students.

"If these programs keep growing, you're going to wind up with more and more students who are graduating and can't find meaningful employment," said Rafael I. Pardo, a professor at Seattle University School of Law and an expert on educational finance. "They can't generate income needed to pay back their loans, and they're going to end up in financial distress."

For�profit trade schools have long drawn accusations that they overpromise and underdeliver, but the woeful economy has added to the industry's opportunities along with the risks to students, according to education experts. They say these schools have exploited the recession as a lucrative recruiting device while tapping a larger pool of federal student aid.
"They tell people, 'If you don't have a college degree, you won't be able to get a job,' " said Amanda Wallace, who worked in the financial aid and admissions offices at the Knoxville, Tenn., branch of ITT Technical Institute, a chain of schools that charge roughly $40,000 for two�year associate degrees in computers and electronics. "They tell them, 'You'll be making beaucoup dollars afterward, and you'll get all your financial aid covered.' "

Ms. Wallace left her job at ITT in 2008 after five years because she was uncomfortable with what she considered deceptive recruiting, which she said masked the likelihood that graduates would earn too little to repay their loans.

As a financial aid officer, Ms. Wallace was supposed to counsel students. But candid talk about job prospects and debt obligations risked the wrath of management, she said.

"If you said anything that went against what the recruiter said, they would threaten to fire you," Ms. Wallace said. "The representatives would have already conned them into doing it, and you had to just keep your mouth shut."

A spokeswoman for the school's owner, ITT Educational Services, Lauren Littlefield, said the company had no comment.

Article continues at link.

[Cerberus]

I've been laughing at those trade schools and the idiots who actually believe their crap for years.

but the newfound depravatory depths of the 'bidness' they conduct amaze even me.

the entire "free market" system in the US to constantly set up to continually screw, in a big way, anyone gullible enough to be screwed.

Is this really the bes way for a society to function?

[madoka]

The problem with the schools is that they are largely funded by government grants. So in that sense, taxpayers may eventually have to foot a big chunk of the bill. Here's what the article says:

"For�profit schools have ramped up their own lending to students to replace loans formerly extended by Sallie Mae, the student lending giant.

These loans are risky: Career Education and Corinthian recently told investors they had set aside roughly half the money allocated this year for private lending to cover anticipated bad debts.

Financial aid experts say such high rates of expected default prove that graduates will not earn enough to make their payments, yet the loans make sense for the for�profit school industry by enabling the flow of taxpayer funds to their coffers: they satisfy federal requirements that at least 10 percent of tuition money come from students directly or from private sources.

"They're making so much money off their federal student loans and grants that they can afford to write off their own loans," said Ms. Asher of the Institute for College Access & Success."

[Senior]

[Cerberus]

[Senior]

[Cerberus]

i can't argue with your basic points. I agree with them though I'm not sure it would have made a big difference if interest rates were a 100 basis points, even 200 basis points higher.

However, I would strongly question whether a private profit motive should exist for broad societally desireable and beneficial things like education...
and health care.

(for e.g. the profit incentive in health care means you want people not to get sick, and if they must, die soon)

Since broad swaths of the populace are innately stupid, this breeds and encourages marketing abuses, scams and basically everything else in normal "bidness" that teaches the average citizen the value of the words

CAVEAT EMPTOR.

it's about the only thing about Confucian culture and values that I have some respect for. The value placed on communal good means the govt mandarins in charge of such things tend to look out a little more for the average idiot citizen and make sure he doesn't get completely reamed.


btw.. please IMAGINE what would've happened if George W would've passed his desire to privatize Social Security accounts. Millions and millions of idiots would have been marketed by and to by Wall Street, billions would've poured into equities and all those people would've lost a fortune (while Wall Street would've made their fees).

Personally it would've worked fine for me. I know the game better than they do and know all the scams and marketing tricks (hey, remember buy and hold? remember average 10% yearly returns in equities, etc?)
But though I don't care for all the millions of losers in Darwin's lottery, there should be a line drawn in the sand somewhere, don't you think?

[Senior]

[Cerberus]

[Senior]

[Cerberus]

there is no country on Earth where the central bank doesn't set the short term interest rate. It's the only way it can then exert control on the economy, primarily by raising rates to control inflation first and foremost.

ooh, let me guess. You want to go back to the "gold standard". Good luck. that all ended when medieval kings in Europe learned to debase their coins by decreasing the percentage of actual gold in them in order to finance their wars, etc.

medical bankruptcy means say you lose your job and are then forced to buy your insurance on the private health insurance market. Skirting aside the debate for now about the uselessness of the private insurance company its mere middleman nature, they can cherry pick their customers. If you had a pre-existing medical condition before you lost your job you will not get coverage on the private market, and if you do, it will be beyond any ability for you to pay the rate. Thousands and thousands of people in the US go bankrupt by this reason year after year.

Once again, a singular exception in the OECD.

yes, people have a right to their choices, and by their choices I can easily conclude people are very very stupid. this is the same conclusion drawn by various bidnesses who then hire marketers and other snake oil salesmen to basically prey on the stupid. btw I have some very reasonably priced penile growth pills on sale. PM me.

[Senior]

[jugbandjames]

Leaving aside the economic argument, I think providing aid to poor students to get a trade degree (plumbing, HVAC, nursing, etc) or university degree is beneficial. It provides social mobility and a skilled work force. The problem begins when you give people who don't belong at a university money to go to a school that anyone can get admitted to and very few people graduate from and go on to have successful careers. Not everyone belongs at a university. Some people should be mechanics, builders, factory workers, etc. Unfortunately, we've lost a lot of the jobs that were for people who are average or below average intelligence. People really do need a degree of some sort to have a real shot at being middle class. If they were smart, they'd get trade degrees at community colleges. In the right part of the country (read: really cold places), someone with an HVAC degree can make 45-50k starting out and own their own business within 5 years. The accreditation process (which schools have to satisfy in order to get federal funding) should be reformed to take into account graduation and after-graduation employment rates.

I teach for one of these online, for profit schools. The classes are informative, and they are all taught by qualified teachers. If you take them, do the work, and take it seriously then you'll learn something. I'm very limited in what I can teach and how I can teach it, and it's nowhere near the difficulty level of a real school. You can also find answers for most of the assignments on the internet, usually for a fee. I've considered doing this myself if I ever quit working there (I'm not averse to taking my slice of the pie). The degree you get will be fairly useless as a result. It's not really even proof that you did the work, but if you're in BFE Oklahoma it might be the difference between being a cashier or a supervisor at your local Walmart. The problem isn't the classes though, it's the registration and financial aid process.

Each class I teach, there are about 20 something students enrolled. Only about 12 of them ever bother to submit any work. Only about 5 of them make a C or higher. Each class usually has at least one person who does not have a computer or access to a computer with the internet on a regular basis. Yet, these people make it through the registration process to take online classes. I've even had a homeless person enrolled in one of my classes. He apparently thought that we would provide him with a place to go and do his assignments. I also teach at public community colleges. We get some of these people, but after a semester or two we figure out that they're just in it for the financial aid check and we kick them out. At the university I attended, you could take a class up to two times, but if your GPA dropped below a 2.0 you were put on academic probation, and, if you had less than a 2.0 average the following semester, you were kicked out. In my online class, I've had people tell me that it is their 3rd or 4th attempt to pass the class. Most of them still didn't pass.

Financial aid is basically being used as back-door welfare, and the existence of these companies enables it. This isn't exactly a new thing either. It's been going on at least since the 80s, and I believe there was some reform in the late 80s early 90s and it cut down on a lot of the private for profit schools (I believe that's where they came up with the rule that 10% of the income had to come from students). Unfortunately, we've lost a lot of the middle class jobs for your average Joe since then. Without jobs for people who aren't that intelligent, the government doesn't have much choice. Everyone can get behind welfare if it's masked as education, and it's better than having a bunch of poor, unemployed people living outside of town in make-shift camps. Plus, you don't have to count students in the unemployment numbers! Everything's fine! Keep buying houses and cars you can't afford!

[Senior]

Cheers. Good post.

You have to ask where all those middle class jobs went to? Mostly because of govt policy. Minimum wage makes it difficult for young or unskilled people to find work. Frankly, they aren't worth minimum wage, but probably would be if they got some on the job training. But, who wants to take that chance?

Tight regulations on zoning, permits, taxes, labor laws, licensing, on and on make it difficult and costly to start a small business.

Labor unions entrench the position of their members, whilst keeping out competition in the labor market.

Tariffs make production inputs more expensive.

Subsidies keep the wrong businesses in business, strangling capital to new firms.

Corporate welfare Out right theft from the public coffers to failing firms help govt cronies.

As you can see, I could go on like this for some time.

[Cerberus]