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Let’s Talk Payback

So, while many prospective students would agree that these programs are expensive, the key point is that you can pay back the education with the increased salary that you will get after the training.

this logic is solid, but needs to be confirmed or mapped out.  in the long run, almost any increase will pay off because anyone under 30 will likely see over 30-35 years in any projection of an increase.  in fact, if the increase was only $1.00 per hour for someone at 25 years old and planning to retire at 65, the benefit would be over $80,000 paying for just about any education costs.

however, one of the key selling points to prospects from the for-profit market and American Career College is the speed.  they say, “in just 8 months you will learn medical assisting and you will immediately start this new career with increased pay”.  so the real question is how long will it take for you be able to break even on the expense and actually get to spend the extra money that you are earning?  the answer is not very exciting for those who have to take out loans to pay for this decision.

so let’s take a look at medical assisting and look at the sources.  on the American Career College website, they reference the bureau of labor statistics – an excellent government source about employment.  on that page they show the following table about wages:

the school would love to tell you that you will make the median wage.  but this figure is the median for ALL medical assistants and at the time of graduation, you will have zero experience.  more realistic salary will be somewhere around the 10%-25%.  what is true, is that california pays more and this chart is for all of US.  so, because this information is not available, we will assume the top end (25%) for any student coming out of the American Career College MA program.

also, we will compare the change from minimum wage job and from a job at $10/hr.  additionally we will compare at various levels of grants versus loans.

bottom line, unless you are getting at least 50% of the program covered in grants (money that does not have to be paid back), you will need at least one full year of living in the same conditions you were before you go to school to use the extra money to pay off your school loans.  If you were making $10/hour and pay for the entire program with loans, it will take almost 5 years.  we are absolutely sure, given the stories we have heard about American Career College and other for-profit schools, that this is not being shared with prospective students.

lets compare it to community college.  using cerritos college information from the web site, a comparable program would be 30.5 credits at $20 a credit for a total of $610.  there are a number of other fees like parking and the like so we have used $1,000 for the analysis.  also, we are going to assume that all of it is loaned versus having any grants – see below:

yes, you are reading that correctly.  the community college comparison requires either 2 months or 4 months to pay back the debt.  and while we acknowledge that the community college system is more difficult to navigate and may take a little longer, think about waiting 5 years after you are done with school to actually feel the benefits of the new job.

*Analysis assumes 40 work weeks, 52 weeks a year.

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