Summer 2011 |
High cost, student debt vary greatly between for-profits and public colleges
As an academic advisor at Metropolitan Community College (MCC), Kimberly Schuchmann
sees her fair share of students who were formerly enrolled at a for-profit college.
"All the time, students come in and say, 'I want to come [to MCC] because some of
my credits will transfer and because of the low cost,'" she said. "They realized how
much they were paying at the for-profit college, and how much more affordable it is at
MCC—and they get more choice in classes here."
For-profit colleges are educational institutions that are run by private,
profit-seeking companies. Such colleges are run like a business; the company's owner
or shareholders expect it to make money. On the other hand, nonprofit colleges like
MCC, state colleges and universities receive a portion of their funding from the
state, and education is a goal in and of itself.
Recently, the multi-billion-dollar for-profit education industry has come under
fire. Critics say that a large chunk of those profits actually come from taxpayers in
the form of federal student loans: An average 89 percent of students at for-profits
use loans to pay for their education, compared to only 12 percent of community college
students. Moreover, the jobs for-profit students obtain after graduation often aren't
enough to pay the loans back—some 40 percent of for-profit students defaulted on their
loans in 2010.
The difference in the cost of education is astounding. MCC's tuition rate is $48
per quarter credit hour—four times less than the tuition rate at many Omaha for-profit
colleges. In fact, students who attend a for-profit school in Omaha take out at least
three times as much in loans as students who attend MCC.
The high level of debt among for-profit students led the U.S. Department of
Education in June to require for-profits to demonstrate that their programs are
preparing students for "gainful employment"—or risk losing theireligibility to
participate in federal education grant and loan programs.
In addition to debt, students at a for-profit college may have trouble transferring
their credits to other institutions. MCC will not accept all for-profit credits. Among
the health careers, for example, transferring credits is even stricter. If the
for-profit program isn't accredited, students may have to retake classes if they are
planning to continue their education. Meanwhile, credits at MCC are accepted
nationally, and some programs make transferring a completely seamless process.
The other benefit to a community college, Schuchmann said, is the focus on the
community. Community colleges are driven by students, not profits. MCC, the
second-largest postsecondary institution in Nebraska, has a 37-year-history of working
in the community and building relationships with employers to guide students toward
careers. "If a student has their degree from MCC, it gives them an edge," Schuchmann
MCC President Randy Schmailzl echoed MCC's mission to provide affordable, quality
"Metropolitan Community College works hard every day to provide affordable,
accessible and convenient education to our students," he said. "Under the leadership
of our Board of Governors, we continue to hold the line on property taxes and tuition
while working with the State Legislature on an equitable distribution of state aid.
These endeavors, along with dedicated faculty and staff, provide educational
opportunities for students without undue financial hardship."
Why does accreditation matter?
Accreditation means you are getting a quality education with credits that
transfer. Many for-profit colleges have national accreditation rather than more
rigorous regional accreditation. MCC is regionally accredited; credits are
What about financial aid?
Be wary of organizations that charge a fee for financial aid advising. At
MCC, there are never fees for advising services.
Should I be worried about debt?
MCC does everything it can to minimize student borrowing. MCC students
borrow at least three times less than for-profit students in Omaha.