The financial risks of choosing the wrong college
Choosing the right college goes far beyond college rankings, identifying the right major, or even choosing the right college town. Many parents and students are unaware of the types of colleges identified as non-profit or for-profit. Unfortunately, not knowing the difference has left many students thousands of dollars in debt and no degree to show for it. The Education Trust report, “Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities” is highly critical of for-profit colleges with such findings as:
- For-profit colleges provide high-cost degree programs that have little chance to leading to high-paying careers
- Students graduate with heavy debt
- For-profit colleges aggressively recruit low-income students and students of color, with such students making up 50 and 37 percent of the student population at for-profit colleges
- 25 percent of Black, Hispanic, and low-income students begin college at for-profit colleges while only 10 percent of White students do so
- Only 22 percent of students graduate from such schools within 6 years
The report also reports the following six-year graduation rates at the following for-profit schools:
- 9 percent, University of Phoenix
- 15 percent, Sullivan University
- 16 percent, International Academy of Design and Technology
- 27 percent, Westwood College
- 31 percent, DeVry University
- 35 percent, Berkeley College
- 41 percent, The Art Institute
- 44 percent, The Illinois Institute of Art
- 66 percent, ITT Technical Institute
- 67 percent, School of Visual Arts
The report also noted a significant difference in the amount of debt that students are left with based on the type of school attended:
- $7,960 at public colleges and universities
- $17,040 at private, non-profit colleges and universities
- $31,190 at for-profit colleges and universities
For those students choosing to enroll into a non-profit college or university, the debt can still be daunting. The report by the Institute of College Access and Success,“Student Debt and the Class of 2009” estimates that college seniors who graduated in 2009 carried an average of $24,000 in student loan debt. The unemployment rate for 2009 college graduates rose to 8.7 percent, the highest annual rate on record.
The amount of student debt varies widely by state. The highest debt state is the District of Columbia at $30,033 and the lowest state is Utah at $12,860. Research the amount of debt by state for specific colleges. Interestingly, some of the highest debt colleges have the most liberal admission policies (Alabama State, Fort Valley State, and Wheelock College), while some of the lowest debt colleges have the most highly competitive admission policies (Cal Tech, Princeton, and Williams College). Thus, students should not only develop a plan for getting accepted into the right college, but ensuring that earning their college degree does not require that they mortgage their future.