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For Profit Schools, the Next Sub Prime Disaster

Sunday August 8, 2010    

There won't be empty subdivisions and Auction signs but there are already plenty of defaults on for profit school loans. It is basically the same recipe. The government guarantees the loan, the seller seeks marginal qualifiers and the result is a default. The school offers little in the way of academic education, the student fails to get the promised job, and so does not pay the loan. Meanwhile the school pockets the money and you and I pay for the default. And of course the prices for say a six month Legal Assistant class run well into four or possibly five figures. 

The SA Express News did a good piece on this continuing train wreck. Why wait until 2014 to start investigating?

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2 responses to “For Profit Schools, the Next Sub Prime Disaster”

  1. Marcos Esquivel Avatar
    Marcos Esquivel

    I do not know much about how “for profit” colleges operate, but to me it seems that it should not be a suprise if you cannot find a job over $30,000 with only a 9 month education behind you. From the prospective of an employer, I would rather employ some one with a 4 year degree than a 9 month education; they would know their occupation better and the employer would not have to worry as much on continuing education to stay competant to do their job. Also 40% of students defaulting because of not finding employment is rediculous, not really sure if the college is to completely blame unless it really is proven to be consumer fraud?

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  2. Dennis Elam Avatar
    Dennis Elam

    Most of the 9 month variety turn out to be menai assistant type jobs as the students discover, hardly worth the tuition which is why they default, I expect this will come in for some serious look from the government

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