In response to a recent story in The Mercury by Justin Pope, "For-profit colleges boost lending," here’s the practical reality. Many market-funded colleges are making postsecondary educational opportunities available to students that are not otherwise possible. Such institutions are putting their own skin in the game. They lend their own funds to fill the tuition gap some students face when all forms of public aid have been exhausted, especially given that most banks — even with massive government support — refuse to lend to anyone with less than stellar credit.
True, a minority of students will be unable to repay their loans for various reasons, including the fact that they do not come from well-to-do backgrounds, as do the vast majority of traditional school students. Defaults are an unfortunate part of every lending scenario. Even graduates of top professional schools default. But prudent business practice — not some artful calculation — requires that schools make a conservative estimate of loan defaults, while doing everything possible to ensure the students can afford to repay their loans so defaults are at a minimum.
The most important thing schools do is work hard to ensure students graduate and get jobs. Career college students graduate at rates higher than or comparable to others — at twice the rate of students in community colleges, for instance — contrary to the factual error in the story. We know postsecondary education is the predicate for success in a competitive workforce. Average annual income jumps from $26,000 for those with just a high school degree to $36,000 for those with an associate’s degree. So the school based loans are good for the students and the economy.
Career colleges are not banks, but 2.4 million students are banking on career education as their bridge to the future. For the overwhelming majority, it works.
HARRIS N. MILLER,
Career College Association (www.pottstownmercury.com)