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Private Colleges A Disaster For Students

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May 03, 2010 – Comments (8)

Here's a Canadian article on student loan repayment and in Canada the private education institutions are proving to be disasterous for young people.

The wages are incredibly low:

A survey done by the federal government and the Canada Millennium Scholarship Foundation last year found 79 per cent of career-college graduates had full-time or part-time work, with an average income of only $26,727. 

 I suppose the part time work is pulling that average down, but no wonder they are defaulting on their student loans.

8 Comments – Post Your Own

#1) On May 04, 2010 at 1:00 AM, ChrisGraley (29.78) wrote:

I think this one is a global problem Dwot.

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#2) On May 04, 2010 at 2:31 AM, peachberrytea (64.85) wrote:

I'm not surprised

There are too many students going into programs that don't really offer much in terms of job prospects upon graduation.

Students generally don't know well enough to research what the job prospects are like before they get into post-secondary education. And I don't blame them - a lot of our young people are getting into post-secondary education at age 18. I know I was clueless and hopelessly naive when I was 18 (I'm in my mid-20's so I'm not that far removed from 18 and I still remember how I used to "think").

If you look at it from the perspective of a student coming out of high school, the easy answer is just to go do some more schooling. Well it's also the only answer. You can't get any decent job these days without some sort of college diploma (most employers wont' look at you unless you have post secondary training on your resume). You really have no alternatives but to do more school.

So you can see how the private colleges can take advantage of this. You have 18 yr olds who have no clue how to evaluate the value of education, who have no alternatives, and you are giving them money in the form of student loans to buy education.

I don't think this is limited to the private colleges. It's well known that universities want larger research budgets and use undergrads to fund their budgets. Public universities, like private colleges, also have the incentive to "trick" our young people into liberal arts degrees (no offense to liberal arts majors meant; as a group liberal arts students are some of the most motivated and brightest that I know. I just want to point out the reality of things as I see it).

 Colleges, public and private, IMO try very hard to hide these from our view.

(I think widely-available student loans is the cause of this - student loans are a subsidy, subsidies cause misallocations of capital; in this case, students and ultimately taxpayers are left holding the bag while colleges benefit; governments can't correct this because it's political suicide to cut student loans, and students have no other alternatives available to them - but that's another topic altogether)

I know people who have graduated with a BCom Accounting at UBC and have no job, or $12-5/hr clerical accounting jobs. To get into a UBC BCom program nowadays you need straight A's in high school so it's not exactly a shady school with low/no entrance requirements. Accounting is also as practical as degrees get.

If you can see that then it's no wonder that students from career colleges can't get a decent paying job - even guys in university can't, and supposedly career colleges are for those who couldn't make university. The job market is far too competitive and we simply don't have that many jobs. Neither public university nor private college have much incentive to offer you education that'll get you a job.

Sorry for the rant.. I think I went off on a tangent. But I wanted to explain why that statistic didn't surprise me, and what I think are the causes of it. I wouldn't be shocked if that $26k figure was a full time figure. This is the reality for a lot of students nowadays, unfortunately.

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#3) On May 04, 2010 at 2:38 AM, peachberrytea (64.85) wrote:

oh btw.. BCom is a Bachelor's in Commerce.

It's a straight 4 year degree recognized just about everywhere... I know a few people who went onto MBAs at Harvard or MIT after a BCom, so it's not some degree you can earn online or something funny like that, and I imagine it's recognized everywhere.

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#4) On May 04, 2010 at 6:52 AM, devoish (97.18) wrote:

From the National Association of Career Colleges

Why select a private career college?

Selecting the right college - the college thats right for you - is as important as selecting the right career. Colleges tha specialize in offering career training are called private career colleges.

1. Because private career colleges are privately owned they are ready to respnd to the ever changing needs of business and industry by developing new courses and making changes in instruction that quickly become part of their programs.

Maybe the abilities of privately owned entities are vastly over estimated due to relentless anti-Gov't and pro private industry marketing that just is not always true. I know any sales pitch that contains that idea has been a "red flag" to me for quite some time.

From the first paragraph of the article: 

Students at private colleges are twice as likely to miss student-loan payments as their counterparts at public colleges and universities, costing taxpayers more than $227-million in a recent three-year period, according to a Globe and Mail investigation.

Immediately the first reply to the article brings up ideas such as "market distortions" caused by Gov't lending along with the ideas of "there just not being jobs" followed immediately by the issue of "incentives" that are typically marketed as being correctly aligned for private enitities due to their risk of failing and incorrectly aligned for public entities because they lack that risk and can just "tax" to correct their mistakes.

I have to go to work, I am looking forward to seeing where this thread goes.

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#5) On May 04, 2010 at 10:17 AM, dwot (41.91) wrote:

peachberrytea,

You are in the Vancouver area?  

I agree that young people don't know how to research, but career advisors are also useless in advising these young people.  I did a degree that resulted in under employment and I took a few years thinking about where to go before going into teaching. 

There was all this rubbish about a teaching shortage coming by 2004.  Big, big, big rubbish.  You can't do good research when the people putting out the information are basically grossly incompetent.  I spent years under employed in Vancouver after really assessing what I thought had gone wrong and then not realising that you can't trust any forcasts because most people are miserably bad at it.

This was the true picture in 2004.  Almost no new graduates got a classroom job.  When I finished I'd say about half did, and vast majority of the rest of us got onto an on call list.  In 2004 about 60% found nothing.  In 2007 the month before I came north I met a teacher who had graduated in 2004.  She had just gotten onto her first on call list, 3 years after graduating and she was on her first day of work as a teacher.  And she was stressed to the limits, saying things like, "it has been so long since my training I don't feel like I remember a thing."

Now, here in the north I do very limited career counselling of my students.   The math skills are very weak here and the few students that are strong in math I encourage to employment that demands strong math.  We have no electrician in town and that is related to the math skills.  I have 3 boys and 2 girls that can handle the math and I always tell them employment is about supply and demand and math skill limit supply.  When I contacted an electrician in a town 3 hours away he basically told me he had not had a day off in 78 days, was taking a week off shortly and would get back to me in a month or two.  He never did.  Not only are these people with these kinds of skills not getting days off, they are working long hours most days as well.

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#6) On May 04, 2010 at 2:37 PM, peachberrytea (64.85) wrote:

Hey dwot,

 Yeah, I’m a Vancouverite. I guess you’re in northern BC someplace?

I completely agree that career advisors are next to useless. I remember back in high school when they put us through CAPP (career and personal planning – I think all the public BC high schools do this?) and there was absolutely nothing mentioned about what the job markets actually look like, or the importance of that. Nevermind making bad predictions about where there may be shortages and such – they don’t even TELL you that you need to think about these things. And even when they do mention it offhand (e.g. about shortages in trades) they don’t emphasize it to you enough. It’s like they don’t want to burst your bubble and tell you “there aren’t enough lawyer doctor engineer accountant jobs out there” or whatever, and instead just leave you to find out on your own. It’s awful.

Then you have the advisors at university/college who would just recommend anything to you. My younger brother’s going thru this right now actually.. he’s being put into Geography or something. Apparently the process was, the advisor asked him “what do you like to study, good you like Geography, here’s how you do it thru our geography program” and that’s it. They really don’t know/care about what your future looks like, only that you stay with them. I’ve been telling him he should consider trades cuz he’s good at that sort of thing. But the parents really don’t like it – they want him to at least have a shot at a degree and being a professional of some sort and to do that he needs the degree.

BTW I don’t mean to say that our young people can’t research and it’s their fault. I meant to point out that colleges are taking advantage of our young people, and there’s little they can to do avoid being victims.

Teaching has a really tough job market. I have a few friends who did their 4 years at UBC then did the 1 extra year B.Ed. Most of them are TOC-ing – the full-time jobs just aren’t there. I know one who has full-time teaching job, but I know she’s excellent, more or less graduated at the top of her class.. she spoke fluent French and could teach music. And she didn’t get a “homeroom” teaching job – she does French part time and helps teach other stuff like math and so forth on the side. I know a couple of other people who are doing their B.Ed practicum right now. I don’t have the heart to tell them how tough it is. I used to talk to young people who were still studying about their job prospects – I thought I could help them make the right choices because I’ve been in their shoes. But I stopped because when I do, I just get this depressed blank response like I’ve hit right where it hurts. 

I have to go to work, I am looking forward to seeing where this thread goes.

 FWIW I think the solution is to reduce/reallocate student loans to supply/type of education meets demand, and then award these limited loans based on merit. This means that our labour force will be “centrally planned” by the gov’t, kind of, because gov’t loans will incentivize areas where there're labour shortage. Then again our labour force already is centrally planned kind of, if you look at how Canada does immigration. Reducing student loans seems like the right concept though I haven’t thought too much of it. Of course, this is political suicide. Also don’t know how this will affect cost of education. I wonder if colleges already lobby governments to keep loans in place. Report this comment
#7) On May 04, 2010 at 8:19 PM, devoish (97.18) wrote:

In the United States we are attempting to solve this issue through the back door, by limiting student loan repayments to no more than 10% of earned income. Of course there is no limit to how much you can borrow or how long you can keep paying 10%, and the obvious risk is you fund a bank 10% of a meager income for a very long time.

I'd rather borrow from, and fund, the United States Gov't.

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#8) On May 04, 2010 at 8:23 PM, getrichdietrying (82.75) wrote:

Schools like those online private institutions?

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