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How much debt can you get from going to a for-profit college?
You’ll likely pay more to attend a corporate college than if you went to an in-state university.
If you’re considering attending a for-profit school, you’ll want to keep in mind a few potential pitfalls before following through. As someone who’s worked in administration at several for-profit schools for the past five years, I can attest that not all of them are bad. But you’ll likely face high tuition rates and possible accreditation issues. And graduate with a higher debt load.
In fact, students who attended for-profit schools account for about 50% of all student loan defaults, according to research by the Brookings Institution. This is likely the result of high loan amounts and fewer opportunities for higher paying jobs.
What’s the average debt load of for-profit college graduates?
Students at for-profit schools graduated with an average of $39,900 in student loan debt in 2016 — 41% more than students at nonprofit four-year schools, according to data from The Institute for College Access and Success.
How much will a degree from a for-profit college cost?
Enrolling in a for-profit college will likely cost significantly more than attending a community college or even an in-state university. If you’re trying to save money, a for-profit college probably won’t be the best choice.
The average annual cost of attending a four-year, for-profit college is around $32,500, according to 2017-2018 data from the Institute of Education Sciences (IES) National Center for Education Statistics.
Here’s how it breaks down:
|For-profit college expenses||Average annual cost|
|Tuition and fees||$16,200|
|Books and supplies||$1,293|
|On-campus room and board||$10,550|
|Other expenses while living on campus||$4,494|
|Total annual cost||$32,537|
How long will it take to earn my degree?
One of the benefits of for-profit degree programs is that they’re often online or self paced. If you’re a nontraditional learner, this could be exactly what you’re looking for.
However, according to that same IES study, it took students at for-profit schools a median of 104 months to complete a four-year bachelor’s degree in 2016. This is compared to 56 months for students at public universities and 45 months for those at private nonprofit colleges. So you’ll need to decide what’s more important — flexibility or speed.
How can I pay to attend a for-profit school?
No matter what type of school you attend, start by looking into non-borrowing options such as scholarships, grants or even getting help from family. Keep in mind that accreditation at the school you attend can affect your eligibility for some forms of funding. Make sure the different programs accept applicants attending for-profit schools before applying.
When you’ve exhausted all of your options for free aid, you might want to consider taking out a student loan. Here’s how your two options break down:
Federal student loans
If you need to take out student loans, you should turn to federal loans first. These loans typically have lower rates and more flexible repayment options than private loans. However, if your school isn’t accredited — some for-profit colleges aren’t — you likely won’t qualify.
Private student loans
Only consider private loans if you don’t qualify for federal loans or if you have a gap in funding. Just make sure to check the eligibility requirements before applying — some private student loan providers only work with students enrolled at an accredited school.
Can I get a job with a degree from a for-profit college?
Lenders aren’t the only ones looking at college accreditation — potential employers are, too. Most employers will require a degree from an accredited institution. And statistically speaking, graduates from for-profit online colleges are 22% less likely than a public college graduate to receive a callback for a job, according to a 2016 study in the American Economic Review.
If you’re considering attending a for-profit college, make sure they’re accredited. And start brainstorming ways to set yourself apart from other applicants in the future, such as internships, certificates or volunteer work.
What to watch out for with for-profit colleges
If you ultimately decide a for-profit college works best with your schedule, be on the lookout for issues other students have faced and even filed lawsuits over.
First and foremost — beware of graduate job placement claims. Some for-profit colleges over promise jobs that graduates will be able to get or exaggerate the amount of money graduates are making. Corinthian Colleges was forced to pay $30 million in fines for similar false advertising practices.
For-profit colleges also prey on vulnerable markets such as low-income and first-generation students. They’re often less likely to question high tuition and fees, leading to large amounts of student debt. This tactic has been equated to real estate lending practices before the market crashed in 2008. This could potentially lead to a similar implosion of the for-profit market if regulations aren’t put into place.
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As someone who’s spent many years working in for-profit colleges, I can attest to some of the shady practices that take place. But you should be cautious when considering any school — and don’t be afraid to compare costs, graduation rates and employment rates to other colleges before making a decision.
To learn more about how to pay for school, check out our guide to student loans.
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