Should college aid be tied to landing a job?
The federal government is proposing stricter rules for financial aid at for-profit colleges.
The economy has brought new emphasis to a debate that has long plagued education circles: Are students paying too much for college educations that don't lead to good jobs?
A recent Department of Education report looked at student loan repayment rates for each institution, including for-profit colleges that often emphasize career opportunities in their advertising.
The report found that students of many for-profit colleges were the least likely to pay their student loans. Post continues after video.
At public colleges, 54% of borrowers were paying down the principal on their loans, compared to 56% of those from private non-profit colleges. But at for-profit colleges, only 36% were paying down their student loans -- which means that almost two-thirds of them couldn’t. At the University of Phoenix alone, that amounts to almost $2.8 billion in federal student loan debt that isn't being paid down.
Chicago Tribune columnist Gail Marksjarvis notes that students often do less investigating of their college choices than their cell phone plans. She suggests students look at the Department of Education report:
That report, which focuses on what is called "gainful employment," shows that almost half of students that have finished college or quit over the last four years have not been making monthly federal student loan payments as required. And the findings hint at why: Students often haven't found jobs that pay enough to cover their loans and living expenses.
The federal government is moving toward stricter regulations of schools whose students receive federal aid, with the goal of making sure the taxpayers are getting value for their money.
New rules proposed for for-profit colleges would allow students to use federal financial aid only to attend institutions where a certain percentage of students repaid their federal loans and where graduates got jobs that paid enough to make their loan payments. You can read details on the proposed rules here.
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The executives of for-profit colleges have lobbied heavily against the new rules, The New York Times reported.
What do you think? Are students borrowing too much money for educations that don't pay? Should the federal government tighten requirements for institutions whose students receive federal aid?
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