California headed for cuts for for-profit students

By Reuters
Saturday, February 26, 2011 11:58 EDT
google plus icon
  • Print Friendly and PDF
  • Email this page

WASHINGTON (Reuters) – California’s student aid commission said on Friday that aid funds going to students at for-profit schools should be slashed first when the state cuts its education budget.

The U.S. Education Department has criticized some for-profit schools, which range from universities offering PhD’s to trade schools offering car-repair training, for low graduation rates and high loan default rates.

The California Student Aid Commission, which administers financial aid programs, voted unanimously on Friday to put Cal Grant aid to for-profit schools’ students at the bottom of its priority list when the state is forced to make budget cuts relating to education financing.

“The governor and the legislature need a communication from us,” said Commission Chair Barry Keene. “This is not a position we want to be in, but we have to set priorities and this painful priority setting has to take place today.”

Participating Cal Grant schools can have a default rate of no more than 20 percent for former students.

Nationally, fully 25 percent of students who either graduated or left for-profit schools in 2008 defaulted on their loans compared with 10.8 percent of students at nonprofit schools, which include public and private schools, according to Education Department data.

Commissioner Lawrence Hershman noted that there had been cuts at many schools. “The public universities have taken on drastic cuts. It’s time for the for-profit colleges to share in some of the pain,” he said in a press statement.

The Golden State is one of the worst hit by the housing bust, financial crisis and economic recession, becoming the most indebted state in the country. To shrink its budget gap of $24.5 billion it has had to squeeze dollars out of nearly every program, freezing hiring and banning giving out promotional knickknacks such as free key chains.

Its public university system, once a point of pride for the state has had to make drastic spending cuts over the last three years and turn to the private sector for help.

For-profit schools in California include Heald College, the Everest brand of schools and WyoTech, all owned by Corinthian Colleges and Kaplan College, owned by the Washington Post, among others.

Mochila insert follows.

Reuters.com brings you the latest news from around the world, covering breaking news in business, politics, technology, and more.
By commenting, you agree to our terms of service
and to abide by our commenting policy.
  • http://pulse.yahoo.com/_EZ4W5CDCIVXKIIKESYBN2EP6VE brian

    Why is it that education is ALWAYS the first to be cut?

  • http://twitter.com/bujeeboo Sonya Lee

    If your following what is going on in for-profit schools, this is the first step in putting these rip-off facilities out of business. GOOD!

  • Anonymous

    Because those doing the cutting already have their education – but not enough to worry about tomorrow.

  • http://profiles.yahoo.com/u/FPBFO6RC5R2HHIP3VXSFU2RZQA mjj

    On this one I agree. For profit schools often don’t accomplish what they claim. The education they receive in most cases does not and will not transfer to an accredited institution. In fact that should be the bottom line in order to receive tax payer money. A for profit school should be accredited by the same agency as public schools and colleges. The fact is most of these “for profit” schools are nothing more than diploma mills in which students take out large loans for an education that in most cases is worthless and the schools take grant money in order to continue in business.

  • Johnny Warbucks

    The Bay Citizen (a SF paper) has been doing an all out assault on public education for the past 2 weeks. They have attacked everything from special ed to the size of classes to you name it. They should be done soon. Obama’s crusade since the beginning was the complete privatization of schools. He’s accomplishing his agenda one state at a time. Who says that Obama doesn’t know what he’s doing and is inefficient, eh?

  • Johnny Warbucks

    It’s the plan for the dumbing down of Amerika. Dumb people are easier to enslave and manipulate.

  • http://profiles.yahoo.com/u/3NVQSZZC5IM66JEOCSFJUV7FCE Jacques G

    This is not about cutting education, it’s about cutting off expensive PROFIT-MAKING “schools”. If the “free enterprise” system is so great, let THEM fund their own students with their OWN “scholarships” and loans, not with public taxpayer money.The Kochs etc. have lots of money, let THEM create private school scholarships. Just as government school loans should NOT be handled by banks, but by a government egency, give those public scholarship funds and loans to public funded schools. This is an excellent plan.