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Education Loans and For-Profit Universities
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Turn on your TV and computer and you're likely to be bombarded with ads for for-profit universities. They claim to be the quickest way to practical job experience and a diploma that will get you the career of your dreams. However, for millions of jaded students, for-profit universities have provided disappointing education and even more disappointing financial aid.
Issues with For-Profit Universities
To understand the main issue with student loans used for for-profit universities, you should understand why for-profit universities are problematic. First, they have little oversight. The classes and material they teach are often not the same as private or public colleges in the same state. This means that credits are almost never transferable from a for-profit university to a regular university.
Another problem with for-profit universities is their application process. Unlike non-profit universities, their main qualification isn't intelligence or potential. It's if an applicant will be able to pay, either out of pocket or using financial aid. This leads to students who end up in degree programs that they are ill-prepared for and not equipped to finish. This situation can lead to colleges preying on students who qualify for federal financial aid.
The Cost and Tuition of For-Profit Universities
All of this would not be as bad as it is, were it not for the extremely high cost of attending a for-profit university. They claim that the cost is higher because you are paying for the convenience of being able to study online, when and where you can. However, the price difference between for-profit and non-profit universities is substantial. Students attending for-profit universities make up 10% of all college students, but they account for 25% of federal student loan funds! Many students claim that the education quality of their for-profit school is shoddy and not worth much at all, which makes the high costs even more heinous.
Dropout and Debt
This all boils down to the big problem of using student loans to pay for for-profit universities. Students at for-profit universities are more likely to drop out of school without a diploma. However, they are still saddled with the student debt that they used to attend the school.
Even worse, these students have taken on thousands of dollars in debt for no reason. The credits from their university typically do not transfer to a reputable university, which means that they have to completely start over.
Additionally, people who use loans to attend for-profit universities are far more likely to default on their loans than students who use loans to attend regular universities. They end up with no education, no money, and ruined credit.
Clearly, using student loans for for-profit universities is a dangerous practice. The students end up with little or nothing to show for their debt, while for-profit universities walk away with federal funds. You can avoid making financial mistakes by using the online resources, such as www.myloanadvisor.com, that exist to help you make good choices about your education loans.