Other experts expressed similar concerns.
"These are low-income students, without a parent or other co-signor, borrowing more than they can borrow within the federal student-loan program," said Robert Shireman, director of the Project on Student Debt.
"To ask a student to take a high-interest-rate loan, on top of federal loans, for an unknown possibility of a degree and a job is too much risk," he said. "Students should consider both other financing options as well as other schools."
These loans are often compared to credit card debt, with the additional unattractive feature of accumulating compound interest while the student is enrolled in school. The result: After a few years, the student's debt can double.
Student loans are not dischargeable in bankruptcy, so this debt can haunt a former student for life.
Some lenders don't want to finance some students at certain for-profit schools, Shireman said, because their graduation rates are poor and the graduates often have trouble getting work. That makes repayment prospects bleak.
Default rates at for-profit schools run about double the national average, according to the Department of Education. In 2005 -- the most recent year for which statistics are available -- the average default rate for commercial school students was 8.2% compared to 4.6% for students overall.
Community colleges offer classes that lead to the same degrees and job prospects as proprietary schools, Shireman said. But, community colleges cost a fraction as much.
Pasadena City College, for example, charges $628 annually in tuition and fees to in-state residents, according to the College Board, a service that tracks higher education costs nationwide. That gets students a wide range of education options, including two-year degrees in nursing and dental hygiene, among others, and general education requirements to transfer to four-year universities.
Those wanting a medical assistant's degree from Everest's campus in Colorado Springs, Colo., would pay $11,045 for eight months of study, a telephone representative said.
Barragan, the student at Everest in West L.A., took on an $8,000 loan at 8% interest for an eight-week medical assistant course.
At a bus stop Tuesday morning, she waited with three friends, each with a similar loan. The students said they knew that their loans were more costly than conventional financing, which they couldn't get. They said they knew that repayment would be difficult on the $9 an hour or so they expected to earn if they got jobs.
But the loans meant opportunity. Barragan's friends -- Daisy Garcia, 18, of Lennox; Anna Sandoval, 19, of Venice; and Stephanie Chavez, 19, of Culver City -- said they were getting 75% to 90% of what they needed to get and keep a job.
"If I didn't have this," Barragan said, "I'd just be sitting at home right now."
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ron.white@latimes.com
kathy.kristof@latimes.com
