Posted on 03/29/2011 9:46:30 PM PDT by TheDingoAteMyBaby
TAMPA - Westwood College representatives questioned Becky Loring about her hopes for the future. And when she wavered — worried about whether she could afford the $45,000 program — the recruiter used Loring's own words to seal the deal.
"If you don't do this," she recalled the representative saying, "you're never going to get what you've always wanted."
Loring, 32, now owes the government and private lenders more than $100,000. Working in sales, she is far from the graphic design job she studied for, barely able to make her college loan interest payments.
"When I think about it, I just feel nauseated," she said. "How did I let this happen?"
Students such as Loring are borrowing billions from the government every year to attend for-profit career colleges, where enrollment nationwide has tripled in 10 years.
Loring is working with her lenders to keep from defaulting, but she's on the edge, she said.
Meanwhile, tens of thousands of others have gone over, a recent federal report showed.
Of the career college students whose federal loans came due in 2008, nearly 25 percent quit making payments in the three years that followed. Taxpayers are ultimately responsible for paying off bad federal loans.
Default rates for some local colleges were even higher. The report showed Everest University in Largo with a three-year default rate of more than 41 percent. The Tampa branches of ITT Technical Institute and Concorde Career Institute were at nearly 30 percent.
By comparison, the rate for private nonprofit colleges and universities was 8 percent. For public institutions, it was 11 percent.
People have poured into the for-profit colleges in the past few years on federal student loans, searching for new careers in a weak and changing economy. But as the loan defaults rise, government regulators are trying to rein in the rapidly expanding schools — and facing protests from the industry.
People who are close to the issue disagree about what a high default rate means.
To critics of the for-profit college industry, it's a sign of a poor-quality school that will say anything to snag new students, manipulating their hopes and shading the truth about accreditation and job prospects.
To industry defenders, it shows these schools open their doors to people who have trouble in traditional colleges, who are often poor and struggle to pay their bills, especially during a recession.
The report on default rates is preliminary. Congress established the calculation in 2008, saying colleges with loan default rates of 30 percent and above for three years would risk losing their federal aid eligibility beginning in 2014.
Students are required to start paying back loans after they graduate, though many appeal to lenders to delay repayment. The recent report looked at students with repayment dates starting in 2008 and counted those who defaulted on those payments over the next three years. The number was more than 457,000.
Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee, held hearings last year into what taxpayers get back from the billions the government gives to for-profit colleges. The figure was nearly $30 billion last year.
For-profits enroll about 11 percent of all college students but account for about 45 percent of all student loan defaults.
"Serious questions have to be raised about the taxpayer investment in these companies," Harkin said.
Nationwide enrollment in for-profit colleges is about 1.8 million students.
A stretch of Dr. Martin Luther King Boulevard west of Interstate 75 tells the story. On one corner is Rasmussen College. A mile west is a branch of Southwest Florida College, next to a branch of Everest University.
Complaints have grown with the numbers. Witnesses at Harkin's hearings last year told of colleges exaggerating job prospects, fudging financial-aid applications and leaving graduates with heavy debt and few opportunities.
In October, the U.S. Department of Education released new industry regulations scheduled to go into effect in July. A trade group has gone to court to stop them.
The dozens of changes include requirements to:
•Cease paying admissions representatives on the basis of how many students they enroll.
•Provide easy-to-find job placement statistics by program, using methods verified by an outside agency.
•Require states to regulate all colleges with any students in the state, regardless of whether they have a branch or employees in the state.
For-profit representatives aren't happy with how the rules came about.
It was "the most biased process I have ever seen," said Kathy Mizereck, executive director of the Florida Association of Postsecondary Schools and Colleges. The group's 900 for-profit schools and colleges have about 370,000 students.
The Harkin hearings were stacked with opponents of the for-profit college industry, she said. And bad things happen in every school, she said.
"I got a call the other day about a community college student who had $90,000 in debt and had nothing to show for it."
The most controversial proposal to emerge last year, the so-called gainful employment rule, has yet to be released in final form.
It's a process intended to ensure students can repay their loans, taking into account the students' income, debt load and potential employment. The complex calculation also includes the loan repayment rate by students from each college.
A low score could limit a college's federal loan eligibility.
The industry is lobbying hard to modify the final rule, which is expected to come out any day.
"We've been told there's going to be a very, very big revision," said Kent Jenkins, vice president of the Everest College parent company, Corinthian Colleges, based in Santa Ana, Calif.
Florida has imposed its own new rules, said Samuel Ferguson, executive director of the Commission for Independent Education, which monitors for-profit colleges.
Admissions representatives, for instance, have to go through a training program in what they can and can't say to prospective students, he said.
But students also have a responsibility to ensure that a program is accredited and meets their needs, he said.
Cassandra Perry, 24, learned her lesson when she attended ITT in Virginia and couldn't get other colleges to accept the credits she earned there, she said.
After she and her husband moved to the Tampa area, she chose the University of Phoenix, partly because it had a more widely accepted accreditation.
She worked during the day and went to class at night.
"My classes were small. It's like we were a family," she said. "This has worked out perfectly for me."
Graduating in June with a bachelor's degree in psychology, she has applied to the University of South Florida's graduate program.
It's selective, so she doesn't know if she will make it, but she's counting on USF accepting her University of Phoenix degree, she said.
Becky Loring thought she did her homework when she picked Westwood when she lived in Seattle in 2006.
The admissions representative assured her Westwood, owned by Alta Colleges Inc., based in Denver, Colo., was accredited by a national agency recognized by the U.S. Department of Education.
Loring had always loved design and liked the description of Westwood's visual communications program, which she could complete online.
But the $45,000 price tag made her nervous.
She said the admissions director told her not to worry, that she would make at least $70,000 a year no matter where she lived because she could easily work from home.
Loring got a federal loan for $60,000, but that wasn't enough to cover her college costs and living expenses, she was told, so Westwood helped her apply for private loans.
The school refused to accept several credits from an online college she attended earlier, contrary to what the Westwood representative had told her.
Her costs continued to rise when she had to buy expensive equipment and software, and pay online fees, so she borrowed more money and pushed on, committed to finishing.
She moved to Sarasota and graduated from Westwood in 2009 with mostly A's. She built what she thought was a solid portfolio, including fliers, brochures and booklets with logos and other elements she had designed.
"I was so excited," she said. "I did not take advantage of my education in high school, so in college I was determined to apply myself and do my absolute best."
She put out dozens of résumés, she said. No response.
Maybe she needed more education, she thought. But when she began looking into the state universities, she realized she was in trouble. Admissions representatives told her the Westwood degree didn't count for them.
Though Westwood was accredited, it wasn't accredited by an agency they recognized.
"I had a clear path and I thought I knew where I was headed," Loring said. "Now it's like I'm swimming in murky waters."
She contacted Tampa law firm James, Hoyer, Newcomer, Smiljanich & Yanchunis after seeing a television news report about problems at Westwood. The firm is suing Westwood.
A Westwood spokeswoman, Emily Port, questioned Loring's assertion that she was told she would make $70,000 a year.
A company website shows that 77 percent of its visual communications graduates are employed in their field of study, but the average reported salary is $35,000 a year.
Port also said the company informs students about program costs and the risk that not all colleges will accept Westwood's credits.
Loring stands by her recollection of the assurances she received regarding credit transfers and job prospects, but she blames herself for believing them.
She is one of nearly 1,200 students who have contacted James, Hoyer with complaints about Westwood. Most of them are struggling with tens of thousands of dollars of debt, said attorney Jonathan Cohen.
The firm also has received hundreds of complaints about other for-profit colleges. Their stories are often the same.
"They start out so proud and end up buried in debt with a piece of paper that doesn't mean anything," Cohen said.
More than 180 Florida students have complained to the state attorney general about their experiences at for-profit colleges.
"I was counting on a degree to help with a promotion in my career and I got nothing but debt," wrote Kimberly Bramblett of Crawfordville about her experience with a Kaplan online program.
"Please help me," wrote Janet Ayala, who borrowed $8,000 for the medical assistant program at Everest in Lakeland and can't find a job. She was wary of taking on the debt, she said, but Everest representatives were persistent, calling her every day at one point.
Jenkins said Corinthian has become more cautious about enrollments. It has stopped accepting students who don't have a high school diploma, and its short-term default rate is declining.
It was not an easy decision to start saying no, he said.
"These are students who have nowhere else to go."
It all comes down to motivation and hard work. A friend of mine is a nurse. He doesn't look anything like the stereotype of one. A side hobby of his is working on old cars. He made his own parts in his home garage, then when other friends wanted parts, he rented space in a corner of a machine-shop. His business grew over the last ten years as he expanded and hired others and leased his own building. It is now his full-time job, making custom metal components for old cars.
Having a degree is nice, but there are cheaper ways of obtaining one than going into deep debt. Meanwhile, you can still make a decent living with or without one (by living within your means).
Realistically, what kinds of jobs are available to 18-year-olds that will support the cost of independent living?
Our daughter has a best friend from WI, and her parents started a business that manufactured reloading equipment. They weren’t really big, until zero got elected. They went from a handful of employees to over 100. They’ve had to expand their facility three times since 2008. They used to ship the day an order came in, but now have a 2 - 3 week wait time to fill the orders. Their daughter quit a $65K job in CA to help with the business.
My wife has a good friend whose husband has run a gun magazine manufacturing business for years. He has a similar story. His business can’t keep up with orders. Some of his magazines are also used by the military as well. Got to say one thing, obummer has helped anyone who has a firearms related business.
That is our financial economy. Or in a older term, now our political economy.
It is what this nation does. And will do more.
In Japan they have multi generation home loans. Your kids, even if they are now, say, two and three, are contracted to pay off your home loan.
Slaving, serfdom, indenturing is the economy. We live in the big plantation. Instead of being chained to a post, or in a mine, your are in exchange for higher return allowed to roam around and find a best fit, tax maximization occupation.
Every year the screws are tighten, each generation accustomed to every more control, and extraction. From the smallest incorporated town, to Fedgov, each where and when they can, tighten. Just this years federal borrowing, rounds out to near $15,000/per family. ( about 100 mil families ). Next year, $20,000, added to this years 15k and last years 15k. So, since the Bush/Obama borrowing, $50,000, in just these three years have been chained to families and their lives. These government forced elite borrowing may well go on for a decade, leaving each family with $150-$200K. Not including past debts, and entitlements.
Reality will break the proudest. Americans are pretty much addicted to suckling the state tit, and trading their bodies for cash.
Then they aren’t Americans anymore, they aren’t free.
That’s what government schools are for, mentally manufacturing the unfree. State bleach poured on young minds.
Being a homeschooler, I couldn’t agree more.
Americans HAVE become the socialists the public school advocates wanted. It is preciously what they mean when they say, “What about socialization”? It was always meant in a political sense, not how to get along with others.
Wicked cool.
Doubt that. Must be something lost in the translation. That could only happen when the parties file fed taxes jointly. As in a married couple. Even then the “Injured Party” can file a form to get their portion of the return.
All schools have a big incentive to "sign up" students. Even public high schools fight to keep kids from going to private. I've seen it first hand.
Also have a nephew who worked in "financial aid" at a state college. He quit because of the pressure to write as many loans as possible regardless of viability. Last straw was when he got in trouble for informing a felon his desire for a school loan for law enforcement classes was a waste of money since he'd was ineligible for that line of work.
I don’t see how a seventeen year old files jointly with a mom.
Since I don’t remember the Freepers name, there is not much else to say.
I do not doubt that people who are not currently experiencing this, will want to believe it. But I have come across different Freepers who have had this experience, in different ways. I don’t doubt them.
Time will tell the issue. ;)
Unfortunately there’s no shortage of inaccurate info being posted here.
Bottom line. Fed school loans in default draw flags at the IRS and any tax return for that former student gets seized.
What would be interesting to know is if social security payments would likewise be seized. I have never heard of it happening.
IPhone post.
I meant the top 100 HS’s not the top 100 HS Students... And I would bet there are a fair number of thise kids who don’t go onto college.
MY HS was just over the 100 mark in NYS and we only send 93% of my class to colleges..
If the eyes were more slanted, that could be a grey alien.
That is absolutely false. There is no debt whatsoever that can be legally passed on to offspring. Once you’re dead, and your estate depleted, it’s done.
The government NOW OWNS ALL student loans.
And you trust them, why?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.