| A recent New York Times article discussed how | | | | higher demand for their services, higher prices, and a |
| trade schools have become somewhat unexpected | | | | steady supply of government funds available, it is no |
| beneficiaries of the current recession. They have been | | | | wonder that the profits of trade schools are soaring. |
| realizing higher profits and seeing more students, or | | | | Problems occur when students are misled about their |
| rather customers, enter the doors. There are several | | | | prospects for future employment and have unrealistic |
| reasons for this phenomenon. | | | | ideas about how much they are likely to earn, even if |
| The first is no doubt sticker shock that people are | | | | they do find a job in the field they trained for. On top |
| having when they look at the cost of attending a four | | | | of that student loan companies have been notorious |
| year college or university. With yearly costs of $20,000 | | | | for lending too much money. They do this because |
| even at state sponsored schools being the average, it | | | | they know that student loans must be paid back |
| is an expensive proposition these days to finance a | | | | eventually and cannot be dismissed in bankruptcy like |
| four year degree. On top of that many states are | | | | credit card debt or even gambling debt. Some of this |
| raising tuition costs even higher as a way to cut | | | | should stop now that the Direct Student Loan program, |
| spending. There has been a big shift going on for a | | | | which was attached to the recently passed health |
| number of years to put the burden of financing higher | | | | care bill, is cutting out student loan companies from the |
| education on individuals rather than the state. And | | | | federal student loan process. |
| trade schools have also been able to raise costs along | | | | The profits of trade schools which are mostly funded |
| with traditional four your schools. People see the | | | | by federal student loans are so lucrative that the trade |
| earnings statistics showing that people who have | | | | schools have begun making private students loans |
| certain levels of education earn much higher salaries | | | | with their own money to students. They do this |
| than others who haven't continued on with school, and | | | | because there is a requirement with federal student |
| basically they conclude that they too need to further | | | | loans that at least 10% of the cost of going to school |
| their education. Supply and demand comes into play | | | | must be paid by the student or some other private |
| just about everywhere, and certainly the cost of | | | | loan source. So the trade schools step in and loan the |
| education is not an exception. | | | | money to cover this amount, even though they know |
| In addition, many people look to the future and see that | | | | much of this debt will be written off. They are making |
| their peers are having to settle for low paying jobs. | | | | so much money on the rest of the transaction that the |
| Even people who do have a college degree are | | | | loss is worth it. |
| basically under-employed and must settle for a lot less | | | | So people need to be careful about borrowing large |
| salary than expected. With so many people out of | | | | amounts of money to fund trade school training. It |
| work, they are happy to at least have something. | | | | would be best to avoid student loans altogether, but |
| Fueling all this is a steady supply of money coming | | | | people should at least avoid private student loans as |
| from or being guaranteed by the federal government. | | | | opposed to federal loans. The latter have many more |
| Trade schools are now having well over 80% of their | | | | protections for the consumer and also have much |
| revenues financed by federal student loans. So with | | | | lower interest rates. |