For-profit colleges' risky place to spend personal loans

Selecting a college is a complex matter, and scholars should be cautious of private, for-profit colleges. There have been many clashes between for-profit schools and the authorities, and profit driven school attendees have the highest loan default rates after graduating. Students should do their homework before going to, though many for-profit schools are perfectly fine.

Indictment for Trump

CNN reports that the New York Attorney General is investigating five companies that were for-profit universities. One of the schools involved is the previous Trump University, the small for-profit university launched by Donald Trump several years back. It became the Trump Entrepreneur Initiative easily though. This was as the Department of Education said that it couldn’t say it was a school at that point. The New York Times states that Corinthian Colleges, Bridgepoint Education, Lincoln Educational Services and the Career Education Corporation are the other schools involved. The corporations and schools are being investigated although there aren’t yet any charges filed.

How schools and states argue

State governments and the federal government are beginning to come down on for-profit universities, and some previous students are not thrilled. Donald Trump is currently being sued in California by students of the now Trump Entrepreneur Initiative because they say they were misled. Corinthian’s colleges are also under investigation in Massachusetts, California, Florida and Georgia, according to Reuters. The Boston Globe states the Massachusetts Attorney General will investigate the Apollo group as well which is known as the Kaplan Career Institute, operated by the Washington Post business, and University of Phoenix. The stability of smaller private colleges is generally not strong either. They are fairly unstable really. For instance, Alpine College in Spokane, Wash., recently closed its doors permanently in the middle of a term, leaving scholars holding the bag for thousands in unsecured loans and no degree to show for it.

Affording it is hard to do

Students have trouble deciding which school to go to. Typically, cost is a significant thing to consider. For-profit, private colleges can be incredibly expensive. In just one year after graduating from school, 15.2 percent of scholars who went to a for-profit university defaulted on student loans in 2009. That is almost twice the 7.3 percent rate that public university scholars had, Reuters explains. Private, not-for-profit schools had a default rate of 4.3 percent. Also, for-profit school students make up half of student loan defaults. That’s a fairly high rate. It has been too hard for scholars to meet loan responsibilities after going to for-profit universities. People have accused for-profit universities of not preparing scholars well enough. The Department of Education is currently attempting to institute a rule that would deny federal loans to students going to a school with a 35 percent default rate or higher.

Citations

CNN

money.cnn.com/2011/05/20/news/companies/trump_university/index.htm

New York Times

nytimes.com/2011/05/20/nyregion/trumps-for-profit-school-said-to-be-under-investigation.html?pagewanted=1&_r=1&ref=education

Reuters

reuters.com/article/2011/05/20/education-forprofit-idUSN2028820820110520

Reuters

reuters.com/article/2011/05/20/us-education-idUSTRE74J55O20110520

MSNBC

msnbc.msn.com/id/43130397″>MSNBC

Boston Globe

http://articles.boston.com/2011-05-17/business/29552871_1_college-access-success-college-students-schools”