Tuesday, August 31, 2010

University of Phoenix, DeVry, ITT: Scams That Leave You "Dumber" and Poorer

By Makaiya Brown, The Loop 21 
on August 30, 2010
For-profit college target the poor and minorities, and students who enroll end up with debt that far outweighs that of their nonprofit and public school peers.
If you’ve spent any length of time in an urban community in the U.S., I’m sure you’ve seen the ads on public transportation or heard the television commercials from schools where you can train to be a medical assistant or a computer technician. But before you or someone you know signs up for a “promising career” at one of those for-profit colleges, take heed!

For-profit colleges have been around for years. The University of PhoenixSanford BrownDeVry University, and ITT Technical Institute are just a few of the more popular ones. It appears that these schools target minorities, low income individuals and anyone dumb enough to believe their ads. The most memorable are the commercials from ITT Technical Institute: Because you can’t get the jobs of tomorrow until you get the skills today. Start by calling ITT Technical Institute.

But I’m here to tell you these schools are not the answer to a promising career! I think schools like ITT are a money sucking scam! With record unemployment in the U.S. and African Americans making up a large percentage of the unemployed, I fear that more African Americans may be lured into the trap of dishonest for-profit schools only to find themselves with a degree or certificate that they cannot use and loads of debt that they cannot pay.

According to data provided by U.S. Department of Education, students who enroll in for-profit colleges end up with debt that far outweighs that of their nonprofit and public school peers. The data showed that last year 350,000 University of Phoenix students were responsible for repaying almost $5 billion in outstanding loans, yet only 44 percent of them had the financial means to repay their loans. Don’t get me wrong, students who attend public universities can graduate with large amounts of debt as well. However, all of my friends who’ve gone to 4-year accredited public or nonprofit universities have gained skills and jobs that have allowed them to pay off their loans. I can’t say the same for friends who’ve enrolled in schools like ITT Technical Institute or the University of Phoenix.

A federal investigation found that several for-profit colleges are involved in fraudulent acts and questionable marketing practices to attract students. The investigation unveiled that many of the colleges harass prospective students with repetitive recruiting phone calls after students request school information on websites. Several of the schools also encouraged students to falsify financial aid forms in order to get federal funds. By law up to 90 percent of the revenue of for-profit colleges can be derived from federal student aid. That’s billions of federal dollars that is wasted in some cases by students who either don’t finish the programs or default on the loans due to misguidance by representatives from these colleges.

Luckily the Obama Administration has been gearing up to tackle for-profit school regulation.

In order to qualify for federal aid, for-profit schools must prepare students for gainful employment. The DOE’ s proposed regulations would cut federal aid to these schools if students don’t find gainful employment or if too many of their students default on their loans. The DOE plans to rule on the regulations by November of this year. In the meantime I urge prospective students to consider traditional 4-year universities and reputable community colleges rather than for-profit schools and certificate programs. Do your research and don’t sign anything that you don’t understand, otherwise you might end up dumb and broke.

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