Tag Archives: financial aid

Who Profits from For-Profit Schools?

In May, I wrote about for-profit schools, and over the Memorial Day weekend, I found a valuable source. The PBS program “Frontline” ran a special in May called “College Inc.” On this special, they explored the for-profit education industry. The program features interviews with school personnel, students, supporters, and critics.

Widely-publicized issues with for-profit schools—that students receive degrees for which they are not prepared because, for example, they have no practical experience in the field; that students come out with enormous amounts of debt and no job prospects; that students enroll in schools that are not accredited, not realizing that their degree will not have the value they expect—are explored on the program.

The University of Phoenix, currently the largest college in the United States, is explored, as is the for-profit education business from the point of view of the investor.

The possible reshaping of how Federal financial aid to hold the for-profits to a higher measure is also explored. Nearly half of the students who defaulted on student loans within three years of graduation calls into question the value of a for-profit degree to boost a student’s earnings.

And those in charge of accreditation of universities are also looking more closely at how the accreditation process works with for-profit schools.

To view the program, which is available online, go to this special section of the PBS website. While you’re there, you may also want to look at the responses from the colleges, and check out the 1053 viewer comments.

And, because one of the most striking stories in the special is that of a student who ended up with $200,000 in student debt and unable to get the job she trained for because the school did not have the proper accreditation, you may wish to read our article on “Financial Aid Options for College.”

For-Profit Schools

For-profit Schools have made the news the last few days as rumors that U.S. Education Deputy Undersecretary Robert Shireman is planning to resign have surfaced. Shireman has been considered a leader among those seeking tougher regulations of for-profit schools—regulations that could potentially reduce their Federal financial aid, which had increased six-fold from 2000 to 2009.

What are the for-profit companies for which Shireman has wanted to see increased regulation? They include Corinthian Colleges, Apollo Group Inc. (which owns University of Phoenix), Career Education Corp., DeVry Inc., and ITT Educational Series Inc. Upon news of his leaving, stocks rose significantly Monday for all of these companies. On Tuesday, with breaking news that Shireman would continue his relationship with the US DOE in an advisory capacity, the stocks all slid down, some more than others.

One of the main criticisms of for-profit schools is that they serve a predominantly low-income population of students who can end up with large, and sometimes unpayable, debt. Shireman had proposed that for-profit schools be required to demonstrate that graduates of the for-profit programs would have incomes commensurate with paying back their student loans.

Many of the schools that offer online technical or vocational training are for-profit schools. Certain of them have been known to have issues with proper accreditation as well as the funding issues, but careful vetting can help you sort these out. You can find useful information for making an assessment in our articles: “Distance Learning” and “Online Technical Schools.”

Technical and vocational education is also offered through schools that are not-for-profit, like high schools with technical centers, community colleges, and state-run colleges, universities, and technical colleges.

Sources

www.businessweek.com/news/2010-05-17/colleges-surge-as-government-official-is-said-to-quit-update1-.html

www.reuters.com/article/idUSSGE64H0JO20100518

Higher Education Act

The Higher Education Act was originally passed in 1965, as part of President Lyndon Johnson’s attempt to “strengthen the educational resources of our colleges and universities and provide financial assistance for students in post secondary and higher education.” The original reform made it easier for many to pursue secondary education by generating low-interest student loans, increasing the funding that is provided to universities, and creating scholarships. This legislation was designed to be open for review and change approximately every five years from its origination, in order to accommodate growth and improvement in the reformation of education.

The Higher Education Act has been reauthorized in the years 1968, 1972, 1976, 1980, 1986, 1992, 1998, 2008, and 2009. In 1998, the amendment prevented individuals with drug charges from receiving federal financial aid for school. Next, in 2003, the changes made to the Higher Education Act were intended to assist minority groups accomplish their educational goals. Then, the 2008 Higher Education Act made an amendment that would offer loan repayment forgiveness for disabled people. In other years of reconsideration, little changes were made and the existing legislature was reauthorized.

More recently, in 2009, Obama signed for some technical changes to occur in the Higher Education Act, which updated some language and political issues. Authorization of the program that is currently in effect is set to expire in 2013. However, with the current state of our economy, many people expect to see changes occur with the Higher Education Act before then. In 2010, the government plans to put a large focus on items pertaining to post secondary education loans and loan repayment.

Technical Schools

Technical schools are available all over the world. They offer professional skills for some of the highest paying jobs. Plus, they provide a fast track to a career. Most technical programs require only 6 months to a year of training before the student is ready for the job market. With the rising cost of tuition and the lengthy amount of time it takes to get a degree from a university, technical schools are growing in popularity.

Technical or vocational skills are recognized for teaching job specific skills, rather than providing a broad education, like one that might be received at a four year college or university. They are considered to be practical institutions, which prepare individuals for careers in a timely manner. Students choose technical schools for a number of reasons. However, they are most popular because they are job specific and ensure that one will be ready for a certain career upon completion of its related program.

When selecting a technical school, there are several things one should consider. Location is an important factor. Due to the fact that there are hundreds of technical schools located all over the map, often one can conveniently stay in their current area to attend school. Also, tuition and fees are a major consideration. Generally, a technical school is less expensive than attending a university. However, not all of them are accredited or able to offer you financial assistance programs. Also, every technical school should have current information about job placement and how many graduates are actually placed in their career field.

For all types of occupations including, welders, certain types of engineers, computer drafting, dental assisting, hospital tech jobs, and more, technical schools assist students in joining the workforce with a set of specific skills. However, they are generally not as highly accredited as a university and often make it difficult to transfer credits around. On the other hand, there are many advantages to technical schools which may cause them to be the better option for certain individuals. Selecting any type of educational facility is an important decision that requires careful thought and research.

Student Support

As a young adult, there are many things to consider while pursuing an education. You must figure out how to fit the expensive bill of attending an educational institution. Plus, you will need to plan for creating a class schedule and finding the right resources that you need to succeed. Many young students fail to be prepared for important things like health care. Fortunately, student support is offered for all of these items and more. There are many people and resources that are available to help you reach your educational goals. The most important thing is to know what services are offered and how to find them.

Finance is a word that sparks anxiety in many college students. However, the cost of tuition and books should not defer anyone from pursuing an education. School is an investment in your future. For this reason there are multiple organizations that can help you get by. Every educational institution should have a financial aid department. Financial assistance my be available through the school in the form of a scholarship. Also, the federal government, state agencies, and private organizations or individuals may be able to provide for you. Most financial aid departments will have you begin your search for aid with a FAFSA application. This is a lengthy government form that requires your financial information, as well as that of your parents. The application is usually done online and you will want to be prepared with your most current income tax return, as it will ask for some detailed information. However, if you have questions about completing the application, the office of financial assistance is there to help.

When the time comes to select the appropriate classes, you should probably seek the advise of your schools academic adviser. They are a great resource and can help you stay in line for a timely graduation. You will find out exactly what courses are required for your field of study and be instructed on the number of classes you should be able to handle each semester. However, schedule an appointment in advance. Academic advisers become very busy at the start of a new semester.

If you struggle academically because of a learning disability or any other reason, you will want to seek the appropriate organization for assistance. Each state requires student support services for those who are at a disadvantage when it comes to learning. You may be eligible for free tutoring, class room accommodations, or some extra help learning study and organizational skills. Ask your school counselor if you think you may be a candidate for these resources.

Due to the fact that attending an educational institute can be very stressful, young students often find themselves feeling under the weather. Some of them may be far from home or lack appropriate health care coverage. Many schools offer their own health care center. You should contact the Student Insurance office on your campus and look into a policy that ensures you will receive the proper care in the event of an illness or accident. It is required of some schools that you have medical coverage prior to attending.

Get familiar with your campus and know where to go to find help when you need it. Although attending a new educational institution can be an exciting and intimidating experience, help is available if you look around. Student support is offered in a variety of forms and is there for almost any problem you may encounter.

Financial Aid – Student Loans

Most college students need some sort of assistance. Very few students go into college with all the cash needed to support the whole education process to the end result. Most students have to work during college and/or get financial aid of some sort. Here we will talk about the different types of aid that can be possible solutions.

Federal Aid Grants – These grants are determined by a number of factors. Grants are funds that you receive that you DO NOT have to pay back. These are much better than loans and should be the first resource that a student turns to just to keep their future debt load to a minimum if at all possible. Keep in mind that you can do an Internet search for non-federal aid and you may be surprised. There are many offers out there and many people/organizations willing to fund education. For federal aid (Pell Grant) here are a few of the qualifiers:
  • You must be a US Citizen
  • You must have a GED, high school diploma or take an exam approved by the the Federal Aid Office
  • If you are male, you must be registered with Selective Service
  • Have a valid Social Security card
  • Must be accepted to a college
  • Must not have had a drug conviction
  • Give financial documents to prove need and to see how much you qualify for
Student Loans – Many financial institutions offer student loans at low interest rates for the use of education. Student loan payments are usually deferred until the student is done taking classes. After you have been out of school for a certain length of time then the payment begin. The payment amount naturally depends on the loan amount. Most institutions also offer deferment plans if you find that you can’t make the payment for some reason. Ultimately though, you will end up paying it all back with interest.
Scholarships – Scholarships are like grants in that you do not have to pay them back. The difference is that scholarships have different requirements and each one is unique. There are scholarships based on academic status, some on sports activity, some on theatre, music, or other arts. Thousands of scholarships go unused each year so it is worth finding scholarships that you qualify for, even if they are small, every bit helps. You should not have to pay fees to apply for scholarships so don’t get caught up in a scam.

Education Funding

Education funding has always been a topic of debate. With the financial crisis of 2008 many more topics and issues have come up. In our recent article posted on educationbug.org we discuss some of these issues.
Do we have equitable education funding? Do we have adequate education funding? Should education be funded by property tax? What about school vouchers? Our latest article discusses some of these issues.
You may find our other articles about financial aid interesting as well. Click on the highlighted links to learn more.

Tuition Increases

Education systems have been hit hard by the recession. Over the past year or so we have seen a number of news articles on how smaller colleges and universities have been affected. These schools have lower enrollments, which means lower funding, which means the rise in tuition and the laying off of staff members. It appears many of the larger, more expensive, universities are suffering as well. In the news today, Dartmouth joins the numbers in announcing they will be raising tuition another 4.8%. This will increase the cost of attending Dartmouth to nearly $39,000.00 a year, and with room, board, and fees closer to $50,000.00 a year! In their announcement Dartmouth also explains cuts in budgets which will effect building projects, salary freezes, financial aid, and layoff about 60 employees.