Like many parents who have taken a break from their careers, I’ve been contemplating the idea of returning to school. However, I find myself asking: where should I go, and what should I study? The advertisements on public transport are enticing, especially those from the University of Phoenix, featuring vibrant images of enthusiastic young adults engaged with their computers. I admit, I have a soft spot for education—I loved my college experience and would happily remain a perpetual student. Yet, the choice of institution could have significant long-term repercussions on our financial future.
The University of Phoenix is classified as a for-profit college, and recent findings from the Brookings Institution reveal a troubling trend. Researchers Adam Looney from the U.S. Treasury and Constantine Yannelis from Stanford University compiled data showing that over the past 15 years, the amount of student loans taken out for for-profit colleges has skyrocketed.
As noted by journalist Mia Carson in The Atlantic, “In 2000, only one for-profit institution was among the 25 colleges with the most student debt. By 2014, that number had risen to 13, with the University of Phoenix leading the pack. The total debt for students attending for-profit colleges surged from $39 billion in 2000 to a staggering $229 billion in 2014, largely due to increased borrowing rates rather than enrollment growth.”
This is alarming. Students from for-profit and community colleges face much higher loan default rates compared to those who attend traditional four-year institutions. Carson points out, “Only 8 percent of federal loan borrowers from four-year colleges defaulted within two years of repayment. In contrast, the default rate for students at non-traditional colleges was nearly three times higher.”
Several factors contribute to this disparity. For instance, for-profit colleges often mislead students about credit transferability, which results in extra courses and costs. Additionally, these institutions typically don’t provide the flexibility for students to take breaks, making it difficult for them to work while studying. Furthermore, graduation rates paint a concerning picture: while 70 percent of students at four-year public or private universities earn their degrees, only 49 percent of those enrolled in for-profit schools do.
Then there’s the issue of misleading job placement statistics. If a for-profit college exaggerates its employment rates, graduates may struggle to find decent jobs, making loan repayment a daunting challenge. As highlighted by journalist Sam Rivera in Vox, “Unemployment rates for borrowers from for-profit colleges soared to 21 percent, whereas community college students faced a 17 percent unemployment rate. Even those who secured jobs reported low earnings, with graduates of for-profit colleges making just under $21,000 annually.”
If a for-profit institution shuts down before a student graduates, the outcome is grim: they end up with a mountain of debt and no degree to show for it.
On a brighter note, college enrollment tends to rise during economic downturns, as noted by Rivera. As the economy recovers, we can expect to see a decrease in loan defaults.
As for me, I’ll probably satisfy my academic cravings with a few classes here and there. However, when it comes to my children, who will soon be exploring their college options, the message is crystal clear: prioritize four-year institutions and resist the allure of for-profit colleges.
For those interested in alternative paths to parenthood, check out this informative post on home insemination kits. If you’re seeking guidance on pregnancy and fertility issues, the American College of Obstetricians and Gynecologists offers excellent resources.
In summary, while the temptation of for-profit colleges may be strong, the risks associated with debt and uncertain job prospects far outweigh any potential benefits.
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