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Personal Finance: Scrutinize for-profit colleges before enrolling

Some experts say the graduates of such campuses are often ill-prepared for work, deeply in debt and unable to transfer their units to other schools. Here are some areas to look into.

October 03, 2010|Kathy M. Kristof | Personal Finance

Krystle Bernal spent three years studying fashion design, and she's got $80,000 in loans to prove it. But you'd never know it by what she does. She's a part-time bank teller.

"I wanted to be a fashion buyer," she said. "They told me I could earn $65,000 a year."

After finishing a three-year program at Westwood College, a for-profit university in Denver, Bernal was rejected for job after job by hiring managers who told her she wasn't qualified.

Westwood wouldn't comment about Bernal, who is a lead plaintiff in a suit against the school, but said in a prepared statement: "We are proud of the hard work by our 40,000 students and graduates, many of whom are working at businesses throughout the U.S."

Roughly 1.8 million — or some 10% — of the nation's college students attend for-profit schools that promise to prepare them for careers in everything from fashion design and culinary arts to criminal justice and medical technology. Advocates say these schools play a pivotal role in educating low-income students, but some experts in the field maintain that the graduates of for-profit campuses are often ill-prepared for work, deeply in debt and unable to transfer their units to not-for-profit universities.

The U.S. Department of Education recently said it was about a month away from announcing a new gainful-employment regulation that colleges will have to meet to maintain their eligibility to participate in federal student aid programs.

"Career colleges play a vital role in training our workforce to be globally competitive, but some of them are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use," said Education Secretary Arne Duncan in calling for new gainful-employment rules.

The regulation will probably aim to prevent schools from overloading students with debts they're highly unlikely to pay on time, based on the salaries they'll make in a given field.

Another regulation proposed by the agency would require schools to provide prospective students with their programs' job placement rates.

The regulations won't go into effect until at least July 2012.

In the meantime, it's a good idea for students considering for-profit schools to do their homework before signing any commitments, including loans, or paying any money.

• Check graduation rates: Every school must provide the Department of Education with its graduation rates.

This data is available at the College Navigator website (http://nces.ed.gov/collegenavigator).

• Check for more affordable options: Among the many troubling findings in a recent investigation of for-profit colleges by the Government Accountability Office was that many students had far more cost-effective education options.

A student wanting to earn a certificate to do massage therapy or computer-aided drafting could spend $14,000 at a for-profit school, for instance, or could attend community college at a total cost of $520, according to the GAO report. Those who wanted a two-year associate's degree in respiratory therapy could pay more than $38,000 at a for-profit college or pay less than $3,000 for the training at a not-for-profit school.

Had Bernal checked the College Navigator site for other schools providing her major, she would have discovered that she could have studied apparel and textile marketing management at Colorado State University in Fort Collins. There, the graduation rate is 62% (another 9% of students transfer to other colleges prior to graduation), and the $6,318 tuition was less than half the cost of Westwood's $13,958 tuition.

One major obstacle, however, is that not-for-profit schools tend to have much higher admission standards than for-profits. For example, Colorado State University, according to application information on its site, gives "priority consideration" to applicants "who have earned a minimum 3.25 GPA and have successfully completed 18 recommended high school units."

• Look for aid and net cost: The cost of tuition isn't always the cost of education. That's because some schools provide more financial aid than others. As a result, college experts say you've got to check each school's financial aid information to assess your chances of getting help with tuition and living expenses while studying.

• Check transferability: Westwood has revamped its website and practices as the result of the GAO investigation, according to a company spokesman. The school now provides a frank answer to whether its units are transferable.

"Credits you earn at Westwood College in most cases will probably not be transferable to any other college or university," the site says.

Conversely, units earned at Colorado State can be transferred to other schools or used as the basis for a graduate degree.

business@latimes.com

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