DAYTONA BEACH NEWS-JOURNAL: Pay for-profit schools for performance

Career College Central Summary:

  • A college education long has been viewed as a worthwhile investment. Students pay a lot of money up front in tuition — often by taking out loans and assuming a large debt — with the idea that the degree they earn will secure them employment that will offset the costs.
  • But what if the price of a degree eventually eclipses its rate of return? Then you have a situation that resembles the subprime lending that fueled the housing bubble, in which too many people secured loans for homes that failed to appreciate in sufficient value — and too many lenders were eager to entice them into buying homes they couldn’t afford.
  • That has been the primary complaint against some for-profit colleges, including WyoTech in Daytona Beach. As recently reported by The News-Journal’s Chris Graham, several former students have accused the technical school of failing to deliver on promises of employment after charging them exorbitant tuition fees for classes and training. They complain they assumed tens of thousands of dollars in debt in the belief they would become certified technicians in motorcycle repair. Instead, they say, they graduated only to find out they lacked the advanced skills to get good-paying jobs. WyoTech officials deny they misrepresent their courses.
  • Still, the school charges far more in its nine-month Motorcycle Technology Program — $26,500 — than Daytona State College does for its two-year Automotive Service Technology Program — $5,035. DSC’s graduation rates and job placement rates also are superior to WyoTech’s.
  • Allegations of high-pressure sales techniques and expensive courses that don’t lead to lucrative employment have been leveled at WyoTech’s former owner, California-based Corinthian Colleges Inc., as well as other for-profit colleges. In November, under pressure from state and federal governments, Corinthian agreed to sell WyoTech and a majority of its other campuses to the non-profit Zenith Education Group, which is affiliated with ECMC Group and Educational Credit Management Corp., a student loan guaranty agency.
  • Student loans are the linchpin of the controversy surrounding for-profit colleges. The easy availability of taxpayer-backed federal aid makes certain groups of students — the poor and unemployed, adults making career changes, veterans transitioning out of the military — targets for enticing them to sign up for classes that promise them marketable job skills and improved lives. The schools pocket the loan money, the students go into deep debt — and often receive minimal or inferior training that qualifies them only for low-paying, entry-level positions.

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