Education Scams (Part 5)

(Consumer Safety & Awareness article: Part 43)

(Continued from two weeks ago.)

Previously we looked at Pennco Tech, a school in New Jersey and Pennsylvania that, according to many who reviewed it on the Internet, does not live up to their promises.

ITT, a highly advertised technical correspondence school, also has a huge amount of complaints listed against it. Here is one from a former ITT instructor. “The school is a scam that preys on stupid, uneducated people for the $40,000 federal student loans that they obtain. The books are a joke, the curriculum is written for morons, and the credits don't transfer.”

There is a list of litigation taken against ITT including, “ITT Educational Services, which operates ITT Technical Institute across the country, agreed to pay $725,000 to settle an investigation by the California attorney general’s office. The investigation found that the school improperly calculated students’ grade-point averages in order to facilitate students’ collection of financial aid from the state. It was launched as a result of numerous allegations from former employees and instructors.”


Here is another of the many complaints against them: “It's amazing how easy it is to make money in America. America used to be the land of the free. Now-a- days, it's the land of the free to be exploited. ITT Tech is a prime example of this. Their scam? Let virtually anyone in, and charge top dollar for an education that is comparatively worthless. ITT is just like the sub-prime mortgage lenders of recent years. Their prey is exactly the same. Both promise our less qualified citizens a heretofore unavailable piece of the American dream – a home or a college education -- and then they break that promise with educational standards that are too low or mortgage payments too high. And the end result is virtually the same – a lot of debt and nothing to show for it, except a wealthier corporation. Well, at least until the house of cards come crashing down.”

Associated Content.com has this: “According to the Department of Labor, Information Technology careers occupy four of the five fastest growing occupations in the United States with phenomenal growth foreseen over the next seven to ten years. In response to this, a huge industry has sprung up to provide training to people who want to ride the wave of ITT success. The advertisements are slick, moving and very enticing. Testimonials from actual students talking about how attending this or that technical school changed their lives, saving them from a life of laying roofing shingles or flipping burgers. Sometimes there will be large ads in the local paper about how people with the right certifications can make 50, 60 or even 70 thousand dollars per year.”

For a person who may have gotten off track after leaving high school or an older person who is forced to start a new career, these opportunities appear very appealing and the ads make it look quick and simple. In a matter of a few months, a person can make the leap from manual labor to working in an exciting and rewarding career in the Information Technology industry. The reality is something different.

When a student signs up for a technical school among the first things they will be asked about is financing. The cost of completing all of the courses is generally between $9,000 and $15,000 depending on the school. The student will be asked to fill out forms to request a career loan from one of several providers.

It is important for the student to realize that these are not "student loans" and they are not government backed, although some of the schools may intimate that they are. The student is responsible for the full amount of the loan whether the courses are completed or not. Repayment of these loans is under a special set of rules that allow for minimum monthly payments for the first year and then higher monthly payments for a period of eleven to fifteen years.

The trap in these loans is that unlike normal student loans, the money is often paid by the lender to the school, not to the borrower. In many cases the school receives all of the money up front before the student ever sets foot in a classroom. If the student drops out or fails to complete for any reason, the school usually keeps the money and the loan must still be repaid by the borrower.

I could go on, as there are many more similar complaints. The point is simple: Community Colleges are the best option for those interested in a technical education. There are some good schools out there, but none have the reasonable tuition, the guarantee that the teachers are qualified, and the quality classes offered that the state’s two-year schools offer.