Personal loans to attend for-profit schools could be risky

Selecting a college is a complex matter, and scholars should be cautious of private, for-profit colleges. The federal government, along with state governments, is often at loggerheads with for-profit institutions, and students that attend them have the highest default rates on student loans. Some schools are great institutions and well worth thinking about. However, prospective scholars should check any out thoroughly before matriculating.

Trump facing possible Indictment

Five companies that work for, for-profit universities will be investigated. The New York Attorney General will be doing the investigation, CNN states. One school that is part of this investigation is the former Trump University. Donald Trump started the for-profit university a few years back. The organization had to rename itself the Trump Entrepreneur Initiative after the New York Department of Education said it could not call itself a school. The New York Times reports that Corinthian Colleges, Bridgepoint Education, Lincoln Educational Services and the Career Education Corporation are the other schools involved. Charges have not yet been filed. They are all being investigated still.

School and state fight

Previous scholars are not very happy that state and federal governments have been coming down on for-profit universities. Right now, Donald Trump is being sued by some scholars in California. They say they were misled by what is now Trump Entrepreneur Initiative. Corinthian’s colleges are also under investigation in Massachusetts, California, Florida and Georgia, according to Reuters. The Apollo Group is also being investigated as it runs the University of Phoenix and Kaplan Career Institute, which the Washington Post Company runs currently. This is the plan for the Massachusetts Attorney General, reports the Boston Globe. Smaller private colleges could be less stable than their megacorporate counterparts, as well. Alpine College in Spokane, Washington shut down unexpectedly. Scholars were left without a degree and thousands in personal loans.

Payments extremely hard to afford

Cost is something individuals must consider when choosing which university to go to. Most for-profit universities are costly. They can cost more than they are worth. Reuters states that 15.2 percent of students who went to a for-profit university defaulted on student loans within a year in 2009, which is twice the 7.3 percent of students who defaulted after going to a public college. The rate was much lower for private, not-for-profit schools. That rate was only at 4.3 percent. About half of total loan defaults come from for-profit university scholars as well. Several individuals have accused for-profit universities of fraudulent advertising and of not preparing students well enough for the job market, thus making it harder for them to meet their loan obligations. The Department of Education is currently attempting to institute a rule that would deny federal loans to students attending 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”