When Michael Podrid enrolled at the Art Institute of Atlanta in 2005, he dreamed his degree in photographic imaging would land him a job with an advertising agency.
After graduating in 2010, the Dunwoody man has more than $60,000 in debt and hasn’t found a job using his photo skills, so he’s had to ask for help to repay his debt.
He’s happy with his education, he said, but disappointed that his school’s career services department hasn’t done more.
Protecting students from graduating with heavy debt and few job prospects is something the U.S. Department of Education hopes to change.
It recently released stricter “gainful employment” rules that would bar federal tuition funding to for-profit schools whose students graduate aren’t able to pay back hefty federal loans.
Georgia has several for-profit schools, also called career colleges, including DeVry University, Herzing University and Le Cordon Bleu College of Culinary Arts in Atlanta.
Students at for-profit institutions represent just 12 percent of all higher education students — but they account for 46 percent of all student loan dollars in default, according to the Department of Education.
But Brian Moran, executive vice president of government relations at the Association of Private Sector Colleges and Universities, said measuring students’ job placement success in such a terrible job market is questionable.
He also believes the colleges are providing valuable services to people not always served by the traditional college environment.
Under final terms of the law, schools will only be able to receive federal-paid tuition if at least 35 percent of its former students are repaying their loans.
It stipulates the estimated annual loan payment of a typical graduate must not be bigger than 30 percent of his or her discretionary income, or 12 percent of his or her total earnings. The first year a program could lose federal funding is 2015.
“We’re asking companies that get up to 90 percent of their profits from taxpayer dollars (which come in the form of grants and federally-backed student loans) to be at least 35 percent effective,” U.S. Secretary of Education Arne Duncan said.
“This is a perfectly reasonable bar and one that every for-profit program should be able to reach.”
But Moran wonders whether the for-profit colleges, or schools that provide job-specific degrees, are being unfairly targeted.
“It does beg the question: If the [Department of Education] thinks this is appropriate, why aren’t they applying it to all of higher education?” he said.
The Department of Education created rules last fall to rein in deceptive advertising, and it barred schools from paying enrollment counselors based on how many students they signed up, among other measures.
The agency drew up the “gainful employment” rule in 2010, but delayed putting it into effect as it faced heavy lobbying from schools and politicians.
Several of the local for-profit schools, most of which are APSCU members, declined interviews or referred comment to Moran. His association, he said, is still digesting exactly what the 400-plus-page ruling means.
Mark Kantrowitz, a financial aid analyst, said many for-profit college students tend to come from lower-income backgrounds. While a tenth of Ivy League students receive Pell Grants, which are based on need, about two-thirds of for-profit students are Pell Grant recipients, he said.
“The question arises: Are they serving an underserved community or exploiting it?” he said.
And Jennifer Ma, an independent consultant with The College Board, cited a DOE report that found 55 percent students who began a bachelor’s program in 2002 at public colleges graduated within six years. Sixty-five percent of students from private nonprofit schools graduated. Yet only 22 percent of the for-profit sector completed their degrees, she said.
“I think the sense is that a lot of schools are really aggressive in terms of recruiting students and that they lack transparency,” she said. “Some do try to recruit a lot of low-income students who really don’t have a good sense of their job prospects after they graduate.
“A lot ... end up dropping out.”
Aisha Flores, an Atlanta resident woman and former DeVry University student, said even though she graduated in 1998 with $30,000 in debt for an electronics engineering degree, the education was worth it. She found employment one month after graduation.
Still, she supports the federal oversight — and not just of the for-profit sector.
“Though no school can control the economy or job market, they should make sure that what is being taught is going to actually be marketable for that time and truthfully disclose what each student can expect post-graduation.”
As for Michael Podrid, the graduate from the Art Institute of Atlanta, he said he wasn’t expecting the school to help him land a job working for a major company, but he isn’t happy with the opportunities he’s been presented with, either.
“I have friends who are currently enrolled there and have been told by career services to get a job at a mall portrait studio,” he said.
The Associated Press contributed to this article.
ime and truthfully disclose what each student can expect post-graduation."
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