The For-Profit College Reality Check

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3 The For-Profit College Reality Check For students and their families thinking of attending a for-profit college 1 Write the job title you are considering 2 Go to (federal jobs data maintained by the state of Minnesota) 3 On the home page, click browse occupations Explore Careers : Salary + Benefits : Education + Training : Job Search Resumes + Interviews : People + Places to Help browse occupations : help a job seeker : salary info write job descriptions : military transition : disaster recovery services regional economic development 4 In the blank next to Keyword Search, type in your job title 5 Then click Search and then Continue 6 Then choose your state or a state you are interested in and click Continue 1

4 7 Scroll down to State and National Wages for an example like this one for dental hygienists: State and National Wages Dental Hygienists 8 Under the yearly income for your state, add the 10% and 25% numbers. In this case, you would add $31,400 and $36,800 to come up with $68,200. Divide that number by two to get an average. In this case, that would be $34,100. State labor economists say this is a good approximation of an entry wage. 9 Enter that number here That number represents an approximation of what a starting salary is likely to be for new graduates of dental hygiene training in Alabama based on the latest data collected by the federal government. Pay differs from state to state, so your number might vary. WHY START WITH FIRST-YEAR PAY? Because financial experts point out that you will need to be able to afford your student loans right away. So you can t wait 10 years for your pay to rise. Average pay numbers are also misleading. You usually need to start making your student loan payments within six months of graduation - or sooner. Also, you will have lots of other claims on your money, like rent and a car payment. So focusing on your first-year pay to see how much in student loans you can afford makes tons of sense. 10 List the amount of pay the for-profit college claims your job will pay: 11 Compare the two. If there s significant difference, this is a strong clue that the for-profit college could be exaggerating the benefits of borrowing to pay for their program. 2

5 12 Scroll down to State and National Trends and check out what the federal government says are the growth prospects for this job under the Percent Change and Job Openings columns both nationally and for your state. State and National Trends 1 Job Openings refers to the average annual job openings due to growth and net replacement. Note: The data for the State Employment Trends and the National Employment Trends are not directly comparable. The projections period for state data is , while the projections period for national data is Write the percent change for your state here: 14 Write the number of job openings for your state here: 15 Compare this to what the for-profit college recruiter is telling you. If there is a significant difference between the two, consider the possibility that the for-profit college is exaggerating to get you to sign up for its courses. 16 On the Web page, scroll down to Education and Training and see the typical level of schooling that is required in this field of work. Here, we see that most dental hygienists have an associate s degree. Education and Training Dental Hygienists 3

6 Find colleges, training schools and instructional programs for this occupation. 17 Just below the Education and Training chart click the line that says, Find colleges, training schools and instructional programs for this occupation for a list of the schools in your state that offer degrees or certificates in this line of work. Use these to compare prices among the different programs. Could you get the training you need for substantially less money than a for-profit college is asking? Could you get the training at a local community college, live at home, have a part-time job, and possibly get the skills you need for ZERO debt? Many students can. How much can you borrow and still pay it back? Consider that your student loan payments can fall into the: Comfort Zone, or 10 percent of your monthly income - or less; Increasing Discomfort Zone, or 10 percent up to 15 percent of your monthly income; Danger Zone, or 15 percent of your monthly income - or more. Debt Debt Load load goals Goals 0% - 10%* Comfort zone 10% - 15%* Increasing discomfort 15%+* Danger zone *Monthly debt payment as a percent of monthly starting salary. 4

7 $20,000 $28,800 $240 $19,200 or less $25,000 $36,000 $300 $24,000 or less $30,000 $43,200 $360 $28,800 or less $35,000 $50,400 $420 $33,600 or less $40,000 $57,600 $480 $38,400 or less $45,000 $64,800 $540 $43,200 or less $50,000 $72,000 $600 $48,000 or less $55,000 $79,200 $660 $52,800 or less $60,000 $86,400 $720 $57,600 or less $65,000 $93,600 $780 $62,400 or less $70,000 $100,800 $840 $67,200 or less $75,000 $108,000 $900 $72,000 or less $80,000 $115,200 $960 $76,800 or less $85,000 $122,400 $1,020 $81,600 or less $90,000 $129,600 $1,080 $86,400 or less $95,000 $136,800 $1,140 $91,200 or less $100,000 $144,000 $1,200 $96,000 or less * To support payments at a comfortable 10 percent of monthly gross income. Assumes interest cost of 8 percent. ** Payments at a financially hazardous 15 percent of monthly gross income or greater. Assumes interest cost of 8 percent. The For-Profit College Reality Check copyright 2010 is based on the e-book HOW MUCH SHOULD I BORROW FOR COLLEGE by Stephen C. Talbott, Porter Creek Press LLC copyright To buy this worksheet for $0.99, the Workbook Chapters for $1.99, or the entire book for just $4.99, go to 5