We all know that there's a boom happening in post-secondary trade schools. Chances are that you have seen some of them opening their doors not far from where you live. Some of these schools can teach you to be a chef or a computer technician. Others will train you to be an electrician, a medical information processor or an X-ray technician.
There's a reason why these schools are booming. Some of them offer training for professions where a lot of hiring is actually taking place. Some of them offer lots of job-placement assistance to their grads. And most of them help incoming students qualify for federal loans and other sources of financial aid.
Yet a recent article in the New York Times, "The New Poor: In Hard Times, Lured into Trade School and Debt," reports some troubling news about how trade schools are conducting business. Here's a summary of what Peter S. Goodman, the author's article, found out:
- The tuition is no bargain. The national average is $14,000 a year. Some students are paying $30,000 a year or more.
- Many of the schools derive a large part of their profits from "harvesting" federal student aid dollars, including Pell grants that were created to help low-income students. "For-profit schools have long derived the bulk of their revenue from federal loans and grants," Goodman writes, "and the percentages have been climbing sharply." One example: According to the article, the Apollo Group, which owns the University of Phoenix, "derived 86 percent of its revenue from federal student aid last fiscal year. . ."
- Some trade schools exaggerate the number of jobs that are awaiting their graduates. Goodman interviewed one student who racked up $30,000 in loans to train to become an auto body craftsman - but who is now earning $12 an hour repairing foreclosed homes.
So the bottom line is . . .
Remember the old saying, "Let the buyer beware." Investigate any school, and its placement percentages, before enrolling. And remember, earning college credits through online study at an institution like StraighterLine is still the greatest educational bargain on the landscape today.