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HSFPP Weekly Update #121—Career College?  

Message from Bob & Chris: Scams are everywhere today, even including some post-secondary educational institutions. Private career-oriented educational programs have become a recent trend, many of these promising high-paying jobs and high job placement percentages to attract students. These institutions not only do not live up to their promises, they also leave many students with large financial debts to the federal government. Unfortunately, these debts cannot be discharged if the student files for bankruptcy.

Related Updates:

Update #97 - Considering Careers and Potential Earning - 13 September 2004
Update #88 - Paying Back College Loans - 18 March 2004
Update #82 - How Anyone Can Pay for College - 9 February 2004
Update #73 - Changing Needs for Student Financial Aid - 10 November 2003

 

Website Pick of the Week:

http://www.cbsnews.com/sections/60minutes/main3415.shtml

The Web site for CBS’s 60 Minutes newsmagazine program occasionally includes videos and other content on financial topics that you can use in the classroom.

Activity for Educators:

Have students read this week’s article In the New$... and then answer the Discussion Questions at the end of the update.

For an additional activity, students can research careers on http://www.bls.gov/oco/, the Web site for the Occupational Outlook Handbook. This nationally recognized source of career information forecasts how well each occupation is likely to do in the future in terms of numbers of jobs likely to be added or lost in a field and tells how much people in a profession are paid, the level of education needed, etc. This is exactly the kind of information students need when planning for their education, training, and career.

Students can also go to Update # 97 (link provided above) and answer the student activity questions in that update.

In the New$... For-Profit College: Costly Lesson

“Are you interested in a new career? Are you looking for specialized training and a high-paying job in computers, fashion or health care?

”Well, a lot of people must be, because companies selling that dream, the for-profit career colleges, are one of the fastest growing area[s] in the field of education.

”It’s a multi-billion dollar business with most of the revenues guaranteed by the federal government, and until recently the industry was the darling of Wall Street.

”Now, it’s under scrutiny, with one of the biggest players facing allegations that it deceived investors, the federal government, and students, who say they’ve been taught a very expensive lesson.”

“If you’ve ever watched daytime TV, you’ve probably seen one of Career Education Corporation’s ads offering students a brand-new life.

“‘Ever think you could be part of this? With the right training, you can!’
That one was for the Katharine Gibbs schools, which were bought by Career Education Corporation in 1997, and make up just a small part of its scholastic empire.”

“A year ago, CEC was one of the hottest stocks on the NASDAQ exchange, with five years of record growth and $1 billion in annual revenue. It comes from nearly 100,000 students at 82 different campuses, taking classes in everything from computer animation to the culinary arts.

“Brooks College in Long Beach, Calif., offers training in fashion and design, but its graduates have a special nickname for their alma mater: ‘ Crooks College.’

“Why?

“‘Cuz they robbed us,’ says one graduate.

“‘Everything was a lie,’ says another.

“What was the biggest lie?

“‘Job placement – 98 percent job placement,’ several graduates said. ‘They said, like, starting $30,000 a year, $30,000 or more.’”

According to this CBS 60 Minutes report by correspondent Steve Kroft, for-profit colleges promise students lucrative and prestigious jobs once they graduate but, for most, those jobs never materialize. Admissions officers at these schools are said to be more like used car salespeople, who must sign up a certain number of students each week, regardless of academic qualifications or ability, or lose their jobs. Most students at these schools never graduate and those who do are placed in low-paying jobs they could have gotten without going to school. Many people interviewed, including former students, faculty, and administrators said these schools exist not to help students, but only to make money. The profits for these schools can be enormous, coming mostly from federal student loans, paid for by your tax dollars. This industry lobbies politicians and contributes to their campaigns in return for their protection. But these abuses are beginning to attract more attention.

“CEC is not the only publicly traded career-school operator in trouble with the federal government. Last fall, the Department of Education handed out its largest fine ever – $9.8 million dollars to the Apollo Group and its University of Phoenix for admitting unqualified students to boost enrollment.

“And a year ago, federal agents raided the headquarters and 10 campuses of ITT Educational Services, investigating charges of falsified grades and attendance records.”

“And the Brooks College graduates? They feel betrayed. They were sold the idea that an investment in education would change their lives. This investment did, but not in the way they were promised.

“‘My mother told me to declare bankruptcy and I’m only 21,’ says Thurston. ‘She said it’ll go away in 10 years so when I’m 31 I can start my life all over.’

“‘But we are all students that did everything we were supposed to, we gave it our all,’ says Amanda Harris. ‘And we’re still jobless. You know, like, it doesn’t make sense.’”

Source: Adapted from CBS 60 Minutes, “For-Profit College: Costly Lesson.” Reported by Correspondent Steve Kroft. January 30, 2005.
http://www.cbsnews.com/stories/2005/01/31/60minutes/main670479.shtml

 

Activity for Students:

Discussion Questions :

1. If you are interested in post-secondary education, have you thought about where you might go to school? Does the article give you an idea of what to avoid?
   
   
2. What are you looking for in a post-secondary educational institution?

 

Kentucky High School Financial Planning Program

http://www.ca.uky.edu/fcs/hsfp

The purpose of this Web site is to assist county extension agents, credit union educators, and high school teachers in improving the economic well-being of our constituency, beginning with today’s students; and also, to assist teachers in Kentucky in meeting KERA’s goal that all students become technologically literate. Weekly Updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators.