Fed Borrowing Cap Threatens For-profit College Health Care Programs

The owner of Bryant & Stratton worry that some programs could be jeopardized by a broad attempt to crack down on a few "bad apples."

Michael Gutierrez, campus director of Bryant & Stratton in Albany, said his medical assisting, criminal justice and business programs have the highest student demand because they lead to jobs after graduation.

Placement in those programs is around 90 percent, he said.

With an annual tuition of $7,335, Gutierrez said, it could limit borrowing for students enrolling in the medical assisting program since the starting salary in that field is roughly $24,000 a year.

"It could force schools to either lower the cost or get rid of some programs," Gutierrez said.

Nancy Kyer, a single mother from Schaghticoke, has worked as a medical secretary for years. Last fall, she enrolled in the licensed practical nurse program at Mildred Elley, taking night classes to make herself more marketable if she were to lose her job in the down economy.

With the starting salary for LPN’s hovering around $32,000 a year, Kyer was willing to pay $354 a credit or a total of $19,116 in tuition to enroll in the 54-credit program.

“I wouldn’t be in the program without taking out loans,” she said.

She expects to borrow about $15,000 by the time she finishes the 16-month program.

Mildred Elley owner Takes is afraid that students like Kyer will be unable to enroll in the LPN program if the Education Department creates a borrowing cap based on starting salaries.
It’s a concern that U.S. Rep. Howard “Buck” McKeon (R-California) questioned Arne Duncan about during a U.S. House committee meeting last month.

Duncan assured the congressman that the department does not want to hurt students or good programs.

“We don’t want to put in place something that has unintended consequences,” Duncan said.

“I’m a big believer in competition and I think the free market will play here and bad actors, they’ll lose business.”

The Education Department wants to ensure that for-profit schools have high job placement rates, low loan default rates and high graduation rates, he said.

An updated version of the rule is expected to be produced by June and a final decision is expected to come in November, Duncan said.

The effort comes at a time when students seeking two-year degrees also are facing a potential $1,000 a year cut in New York’s Tuition Assistance Program, one of many spending cuts proposed by Gov. David Paterson.

The state Senate leadership has supported the move, but the Assembly rejected the proposed cut from $5,000 a year to $4,000.

“Right now we are at somewhat of a stalemate on that issue,” said Jeffrey Lane, a lobbyist for The Vandervort Group LLC of Albany, who has been helping Mildred Elley fight the cut.

“It’s another example of the challenges we face at a time when people should be looking to us because we provide the exact kind of training the country needs right now,” said Takes of Mildred Elley.

THE BUSINESS REVIEW OF ALBANY

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