Most students who attend for-profit colleges are forced to take out much larger loans and accumulate more debt than students who attend non-profit colleges, according to an article in The Washington Post.
The article cited a study completed by the College Board. The study used the 2007-2008 college school year. It found that 53% of students who attend for-profit colleges accumulated at least $30,500 in debt. Only 24% of students who attend non-profit colleges and 12% of students in public colleges amassed that much debt.
These high levels of debt could cause significant financial problems for students after graduation. The golden rule has traditionally been that students’ salary for their first year out of college should be higher than the total amount of debt that they would graduate with.
The federal government is trying to push measures that make it easier for college students to pay back loans. These measures – if passed – will decrease the interest rate of college loans and offer more debt forgiveness.
There are several factors that can increase a college student’s debt. The largest is the cost of the college one chooses to attend. Also, students who have their own children – and are not supported – by their parents are at the highest risk for intense debt. These students are 25% more likely to accumulate large amounts of debt than other students. Naturally, a student’s parents’ household income can strongly affect a student’s debt.
Students should find out if the college they want to attend is for-profit or non-profit. Also, students should be well aware of how much the college will cost them after scholarships and financial aid are deducted. Some expensive colleges offer copious amounts of financial aid and merit-based scholarships in attempt to lure students into attending. These colleges sometimes exploit students by making them feel better about themselves with scholarships; so they believe they will “reach their fullest potential” at that college. Students should be cognizant of these pitfalls.
More expensive colleges are not automatically better colleges. Some smaller colleges have one or two majors that they specialize in and are well-known for. These colleges might not rank in the highest caliber; however, some of their programs will. The professionals in that industry - that these smaller colleges specialize in - are fully aware of these programs’ merits. These schools can offer the most value to incoming college freshman.