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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.

Categories: Student Advice Tags: ,

Hide and Seek on the American Career College Website – #2

what is REALLY missing from the site is the information that you need to make your decision about the school.  that information is the placement rates for the various programs.  why is this not included?  because apparently there is something to hide.

why do we say that?  well, let’s think through it.  in the end, the reason every student chooses a program like those offered at American Career College is to get a job and start on the new path for the rest of their life.  students pay extra (around 15x the cost at community college) because they want a streamlined program and support they don’t expect to receive from the traditional school system (in a later post we will talk about how for-profits consistently underdeliver).

while the support component might be difficult to quantify, getting jobs for students is not.  it is called placement rate.  Every for-profit school knows what it is because they must track it in order to maintain accreditation and federal recognition for Title IV funding.  the question is why this number is not available on the website?  if they are placing well, wouldn’t it be front and center showing how they get students jobs?

we contacted ABHES, the accrediting institution for American Career College, and they told us to ask the school for this rate.  this is just daring ACC to make up the number, and from what we have heard, they do.  programs from medical assisting, pharmacy technician, vocational nursing and medical billing have all been under the required 70% placement rate by ABHES in the last few years.  yet, this is not shown anywhere public and is supposed to be covered in the private meeting when the prospect is alone with the admissions representative.  what is really happening is that the information is buried in the enrollment agreement is mixed in with a stack of documents.  students enrolling don’t even know that they are acknowledging that they were told these lousy placement numbers.

think about this.  70% is seven out of ten.  even if they make this requirement it means that 3 out of every 10 students that attend American Career College will pay 15-20x the cost at community college and will still be looking for work.

3 out of every 10 will not be able to transfer the credits they just earned, they will not be able to get their loan forgiven and they will not be able to get the time they just wasted back.

3 out of every 10 will have just made their life worse than it was before they went to school.

explain to us again why do we need organizations that act like this in our community?!?!

Hide and Seek on American Career College’s New Website (Part #1)

recently, American Career College spent thousands of dollars updated its website.  while this change seems to provide more information, most notably what is missing is anything that relates to the tuition costs for the school.  additionally, it is very difficult to determine when classes start.  This information seems to be missing from the site.

this is a long standing tactic at American Career College.  the reason you cannot find the information on the site is because they are trying to force you to give them your contact information so they can release their admissions staff on you to pressure you into attending classes.  that is why there is no problem finding the lead form – but good luck finding the tuition and class schedules.

why do we bring this up?  because this year, the state of California reinitiated its agency that is responsible for regulating for-profit schools.  In the new regulations, the Bureau for Private Post-Secondary Education (BPPE) specifically requires that this information – along with anything information that is required in the catalog, be included on the website without requiring the forfeiture of lead information.  See paragraph “O” section 94897 entitled “Prohibited Business Practices” (http://www.bppe.ca.gov/lawsregs/ppe_act.shtml#94897).  It specifically states the following:

(o) Require a prospective student to provide personal contact information in order to obtain, from the institution’s Internet Web site, educational program information that is required to be contained in the school catalog or any information required pursuant to the consumer information requirements of Title IV of the federal Higher Education Act of 1965, and any amendments thereto.

did American Career College revamped its website and not include this information and are violating this regulation?  the short answer of it is no.  but they try pretty hard to make sure you can’t find it.  see this video that shows how hard it is to find this information on its website.

 

 

why would they do this.  well there are a couple reasons.  The initial reason it is in a pdf, buried deep in the catalog is it makes it very difficult for search engines (google, bing, etc.) to pick up – making the tuition more difficult for someone to find prior to visiting or calling.  this is also why they put it just one non-descriptive link on a page that very few people will find on the site.

but the most important reason is, as stated before, they want you to call or visit the campus before they tell you the price.  why?  because it is in these private conversations with the prospect when they can mislead and pressure promise prospects into making the decision they want – the same actions found by the GAO posted on this site in September.  This way there is no evidence accept the prospect’s account – which American Career College can easily deny.  It is critical that they continue the high pressure tactics that they use because this is the only way they can get someone to pay over $15,000 for a Medical Assisting certificate that would cost less than $1,000 at a community college.

as with everything – people only hide what they don’t want others to know about them.  in this case, American Career College is charging students – thus indirectly every taxpayer – over 15x more than a community college.  talk about a ripoff…..

The truth (and lies) about Medical Assistant Programs

check out our latest page that discusses discusses the concept of taking a medical assistant program as preparation for taking an LVN program. as with many things in the for-profit education space, it is a concept hatched up only to increase profits, not to help the student.

check it out here.

What’s the Hurry? Thinking Finances Before Going to Career College

there are certainly many reasons why someone decides to go back to school. a sense of pride, financial gain, and more stability all factor into this decision. to suggest that the decision is purely a “dollar and cents” decision is just not being realistic. but to ignore completely the financial aspect of the decision is not very wise. as with everything in life, decisions come with a cost. to ignore the impact to your wallet in the situation is how so many people got into trouble with their mortgages and had to face the prospects of bankruptcy and/or foreclosures.

so we put some numbers together to help you. we took a look at two common health care programs, Medical Assistant and Vocational Nursing and provided some analysis to help you. these will not give you a specific answer for your decision, but it will give you some ideas to think about as you make the decision.

Here is what we did:

assumptions

1. let’s call the person in this example chris. we started assuming that the current situation for chris a job $10/hr. and chris is using every dollar so there are no savings at the end of the year.
2. we then assumed that chris will work for the next seven years and will receive modest increases of 2% each year and will get a promotion or change jobs for 20% more salary after year 2 and year 5.
3. for comparison, we assumed that chris decided to go back to school and borrowed either $10K (MA) or $20K (LVN) to pay for it.
4. we gave chris average california incomes of $33K (LVN) and $40K (LVN) to start and an increase of 2% each year. we left out the promotions and job changes because salaries are fairly consistent across the field. One would need to get a new skill to command significantly more money (You will see that this doesn’t really impact the analysis significantly anyway).

analysis

we analyzed three scenarios for comparison.

1. the first assumed that chris got a job right away at the average salary and added the cost of a 10 year student loan to the expenses from before.
2. we analyzed the impact if chris did NOT get a job and went back to the previous employer with the same assumptions as before
3. we used a 70% placement rate projects the “expected outcome”. this estimates the average outcome for any student who engages in this decision (this is the scenario that many businesses would use to make a decision)

what we found

as you would expect, the best case scenario where the student gets a job right away shows great positive impact on the projected savings – creating over $100K (LVN) and $75K (MA) over the 7 year time (approximately $10K each year) period that could be used to pay for a new car, house, or planning for the future. this result also will continue for years to come – a very positive outcome.

the other cases are not so good. of course, the worst case scenario where chris goes back to the original job has chris behind not going back to school by $50K (LVN) and $40K (MA) SEVEN YEARS LATER! This is because chris did not work for a year while going to school while still taking on expenses (-$20K) plus the loan ($20K or $10K). at this rate, chris will never get back to the beginning unless someone gives chris gets a higher paying job, receives the money from someone else or defaults on the loans.

the “expected” case is telling as well. it says that at 70% placement rates, the average student will be worse off by $1K-$11K at the end of the seven year period. in short is says that any student enrolling should expect to be no better off than they are today after seven years.

depressing, eh?

for more details on the analysis, click here for a PDF version.

how to improve the outlook

so, are we advocating not going back to school? absolutely NOT. we are suggesting that you take your time and think about it. here are some ways that you can make the education work for you and not end up high and dry.

1. Slow Down – as shown in the analysis, this is a decision that will impact at least the next 2-3 years if not the rest of your life. don’t listen to the TV commercials and the admissions reps pushing you to “get off your butt” and start today. if you do not think it through correctly, it is very possible that you could be WORSE OFF than better after school. trust us, they have more start dates and you have the rest of your life to consider.

2. Focus on Placement Rates – the #1 influence on this analysis is whether chris gets a job in the new field or not. if the placement was 90%, the conclusions would be drastically different. ask and get placement rates from the reps and verify it by talking to recently graduated students using facebook/twitter/allnurses.com/indeed.com. also contact potential places of employment and ask them for an opinion on the school and the alumni from that school. this is more important homework than you will ever get at school, so make sure you do it. remember, getting a job is the main reason you are spending the money.

3. Limit Borrowing – find out what it will take to get into community college or less expensive programs than the for-profit route. the second largest impact on the analysis is the size of the loan chris had to take out. consider waiting a year and saving money while you study and determine the process to get into community college. Had chris not borrowed $20K and happened to not get a job after school was done, chris’ only losses would be the expense during his time at school. chris would cut his negative impact by at least 50% and would be creating savings immediately after his first year.

4. Don’t get ahead of yourself – the for-profit schools want to play on your desire for a change and so they press you to start right now. they will tell you that your new job will give you enough money to do what ever you want. This is simply not true in a vast majority of the cases. you need to plan your future – especially if you are under 25. you have time on your side – bankruptcy or defaulting on your loans will last with you for the rest of your life.

note about tv commercials: even a broken clock is right twice a day

consider the TV testimonials – each school has a former student come up and tell you how much better things are after school and why you HAVE to start today. consider this. most for-profit school systems have thousands of alumni to choose – for them to find 3 or 4 who tell you how great it is less than 1/2 of 1% of the total student population in a given year. You should be much more interested in what the other 99.5% have to say. also consider that most of the time, these people are many years removed from the school. as you get farther from your graduation, your success will be less and less dependent on your schooling and more on your work ethic, experience and networking. for a vocational school to claim it was the key to your success 4 or 5 years after the fact is simply not being respectful to the talents of the student.

look at the placement rates over numerous years and the internet reviews and social sites. do your own research. ignore the tv.

New Advice Page for Prospective Students

if you are considering attending a for-profit career college, check out the page we made that walks you through the process and gives you advice. you can find the page here.

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