Trade Schools Scam Students and Taxpayers Like You.

In case you missed it, the New York Times‘ front page story yesterday was all about how for-profit trade schools are raking in beaucoup bucks in tuition right now, taking advantage of desperate-for-work students and federal financial aid programs alike:

But the profits have come at substantial taxpayer expense while often delivering dubious benefits to students, according to academics and advocates for greater oversight of financial aid. Critics say many schools exaggerate the value of their degree programs, selling young people on dreams of middle-class wages while setting them up for default on untenable debts, low-wage work and a struggle to avoid poverty. And the schools are harvesting growing federal student aid dollars, including Pell grants awarded to low-income students.

The article focuses mainly on schools that want to train you for food service, auto mechanics, health care, computers and electronics, probably because tuition for those kinds of programs can run you upwards of $30-40K, while beauty school is more in the neighborhood of $5-$15K. (Beauty U costs $8500 – $12,000, plus a slew of little extras like aprons, black clothes, products, and “advanced training” classes that are constantly being advertised at $95-$150 a pop.)

But I think we can all agree that even $8-12K is debt you don’t want to be carrying around when your expected income after graduation is $18-32K per year — if you can get a job at all. (Estimates vary widely, but I use the Bureau of Labor Statistics’ data, which ballparks salon workers’ before tax salaries at $9-15 per hour.) A lot of my Beauty U classmates are worrying about the debt they’re racking up and whether it’s going to be worth it. “I’m at the point where I can’t believe I got a loan for this,” says Meg after the now slightly infamous water bottle thing. “It doesn’t feel like they’re preparing us for anything.”

Of course, the for-profit trade school industry argues that it’s providing an indispensable service, helping the working poor realize their middle-class dreams and creating opportunities for professional growth for “career changers” or other recession casualties. When I interviewed at Beauty State, the owner talked a blue streak about how this would be a better investment than my fancy bachelor’s degree from a private university. And Mr G, the owner of Beauty U, loves to paint word pictures about our anticipated success.

And here’s another trick that the NYT story forgot to mention: Extra hour charges. Since most of these programs require you to complete X number of hours in order to sit for the state board exam (I’m working my way through 600), trade schools assign you a graduation date when you enroll. On paper, this makes sense. You want to get through your 600 hours as quickly as possible, so having August 16, 2010 marked on your calendar gives you a reason to get up every morning. But then comes the catch. If you don’t finish all your hours by that set date, the school gets to charge you by the hour to finish them up afterwards. Which means if you miss a couple of nights (to move house, take care of a sick kid, cope with a death in the family, whatever), you have to make the time up as quickly as possible to avoid getting charged later.

Is anyone surprised to hear that Beauty U has extremely strict rules about when you’re allowed to make up those hours? Or that their “make-up hours” fall exclusively during weekday business hours, which makes it nearly impossible for night students (who are attending school at night precisely so they can go to paying jobs during the day) to ever catch up? We’re stuck choosing between losing income now by missing work, or paying Beauty U later.

But I am encouraged to hear that Obama administration is taking notice of these issues. From yesterday’s article:

Concerned about aggressive marketing practices, the Obama administration is toughening rules that restrict institutions that receive federal student aid from paying their admissions recruiters on the basis of enrollment numbers.

The administration is also tightening regulations to ensure that vocational schools that receive aid dollars prepare students for “gainful employment.” Under a proposal being floated by the Department of Education, programs would be barred from loading students with more debt than justified by the likely salaries of the jobs they would pursue.

Yes. More of that, please.

[Photo of the Manhattan Trade School for Girls, which offered year-long training programs for women headed into the garment industry circa 1890-1930.]