Ask about a school’s default rate before you enroll.

Recession Hits

 

Schools with high default rates usually blame them on:  1) the economy; 2) the type of students they enroll; or 3) both.  If the economy isn’t producing jobs, then graduates won’t get jobs, and in turn, they won’t be able them to repay their student loans.  This is particularly true for students from low-income families, because without a job, there are no other resources for repaying their loans.  Seems sensible, doesn’t it?  Maybe, but this is NOT the end of the story, that’s for sure.

A new report by California Watch (located here) compared the default rates of schools with similar numbers of low-income students, and found big differences.  For example, the default rate at Everest College in San Francisco was more than double the rate of Heald College in San Francisco, which has even more low-income students.  According to Deborah Frankle Cochrane, program director for the Institute for College Access and Success, “”When you see colleges of the same type and offering the same programs with dramatically different cohort default rates, you have to assume that there are other factors, primarily institutional quality, that are contributing to that,” she said.

There’s a lot to learn from this, but two items are of practical importance.  First, before you enroll in a for-profit school, find out its default rate.  The average for California schools is 15%; so if the school you are looking at is higher than that, you should ask the school hard questions – and insist on documented answers!  Second, if you are currently enrolled at, or recently graduated from, a school with a high default rate (like the ones on the list below), you should ask yourself whether the school provided what it promised.  If not, take action.

Here is the list from the California Watch report (“cohort default rate” generally means the default rate for an incoming class of students; if there are many start dates during the year, it can mean the rate for each start date, but it is usually lengthened out to cover all start dates in a particular year):

Rank Institution Name City Program Length School Type Official Default Rate for 2009

1

Institute of Technology Clovis Associate’s Degree For-profit

28.1

2

Everest College Los Angeles Associate’s Degree For-profit

27.6

3

WyoTech Long Beach Associate’s Degree For-profit

27.4

4

Everest College Hayward Associate’s Degree For-profit

26.8

5

Palladium Technical Academy El Monte Non-Degree 2 Years (1800-2699 hours) For-profit

26.4

6

Pacific Coast Trade School Oxnard Non-Degree 1 Year (900-1799 hours) For-profit

26.3

7

Allan Hancock College Santa Maria Associate’s Degree Public

26.1

8

WyoTech Fremont Associate’s Degree For-profit

24.6

9

Gavilan College Gilroy Associate’s Degree Public

24.4

10

Four-D College Colton Non-Degree 2 Years (1800-2699 hours) For-profit

23.9

11

Everest College Ontario Associate’s Degree For-profit

23.6

12

NTMA Training Centers of Southern California Norwalk Non-Degree 1 Year (900-1799 hours) Priv

23.5

13

Everest College San Francisco Non-Degree 1 Year (900-1799 hours) For-profit

23.3

14

Everest College Alhambra Associate’s Degree For-profit

22.8

15

Empire College Santa Rosa Associate’s Degree For-profit

22.8

16

Design’s School of Cosmetology Paso Robles Non-Degree 1 Year (900-1799 hours) For-profit

22.6

17

University of Antelope Valley Lancaster Master’s Degree or Doctor’s Degree For-profit

22.1

18

Antelope Valley College Lancaster Associate’s Degree Public

21.8

19

Everest College Gardena Associate’s Degree For-profit

21.8

20

InterCoast Colleges Orange Non-Degree 1 Year (900-1799 hours) For-profit

21.8

Be careful out there!
Creative Commons License photo credit: Alex E. Proimos

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