Attending a for-profit college? Buyer beware!

As I’ve been out meeting with numerous citizens across the Commonwealth, I have been surprised to hear about all of the students enrolling in the programs of for-profit colleges and universities. These will often have tuition rates averaging $40,000 for a two-year degree and up to $80,000 to complete a four-year. While many of these institutions offer a viable option for those who want to advance their education and training, I want to strongly encourage students who are considering enrolling in for-profit colleges and universities to do their homework and to consider many factors, including some of the following facts:

-In June of 2011 the Obama administration finalized its regulations regarding for-profit colleges. According to The Washington Times, “the rule would impose three tests on for-profit institutions, whom critics say have enrolled huge numbers of students receiving federal aid without delivering real results. Repeated failures to meet the new tests would mean the college could no longer accept students paying with federal money, a restriction that could force some nontraditional institutions to close their doors. …”

What are these three tests?

1. At least 35 percent of former students must have begun to repay their student loans within the first three years of graduating;

2. The estimated loan payment of a typical graduate must not exceed 30 percent of discretionary income; and

3. The estimated loan payment of an average graduate must not exceed 12 percent of total earnings.

-According to the U.S. Department of Education, for-profit colleges and universities enroll one in eight U.S. students, yet they account for almost one in two federal loan defaults. For example, a bachelor’s degree recipient at for-profits have median college debits of $31,190 compared to $7,960 at public colleges.

– Harris Miller, president of the Association of Private Sector Colleges and Universities, reports that “for-profit colleges have higher student loan default rates because they serve lower-income students, minorities, immigrants and working adults.

-Under U.S. law, loan obligations can rarely be discharged in bankruptcy. This further blocks students from additional education. Defaults can subject students to government confiscation of tax refunds, social security payments as well as paychecks.

– The state attorneys general in Kentucky, Florida, Iowa, and Illinois are all investigating for-profit colleges as a result of the U.S. government’s probe and these federal regulations. This year lawmakers in Arizona, Iowa, Idaho, Massachusetts, Minnesota, Missouri, Mississippi, North Carolina, North Dakota, Nebraska, New York, Texas, and Utah have all proposed bills relating to for-profit colleges.

I sincerely hope that this information is on the radar of students here in the CNMI as well as on the radar of local agencies that provide scholarships and financial assistance to students.

Yes, the offerings at Northern Marianas College have been quite limited. This has forced many students to look elsewhere for an education and, when it is not possible to physically move to other islands or the U.S. mainland, students have often been enrolling in online degree programs at these for-profit institutions. NMC will be aggressively working this year to develop partnerships and relationships with key states and regions within the United States, allowing us to bring a number of programs at very reasonable prices to you here in the Commonwealth, without leaving home! For those of you who still choose to leave home and travel to be educated in the U.S., we will be seeking partnerships with numerous public colleges and universities to specifically reduce the tuition rates presently being charged to Commonwealth residents.