African Americans graduating with associate degrees from for-profit institutions such as trade schools are racking up nearly as much debt as those graduating from public four-year colleges. Furthermore, the technical school graduates tend to earn less and are therefore getting limited payback for their investment.
A report by the Washington, D.C.-based American Council on Education tracks money owed on federal student loans. The median amount borrowed by graduates of all races who received associate degrees from for-profit institutions during the 2003–2004 school year was $14,067 — nearly as much as the median amount borrowed by graduates with bachelor’s degrees at $14,671.
At for-profits, 78% of certificate recipients and 89% of two-year associate degree recipients graduated with federal loan debt. Unless training is for high-salary, in-demand specialties such as allied health fields, income rewards may be disappointing. “They are left with a debt to repay and not a lot to show for it in terms of their increased ability to earn,” says Jacqueline E. King, director of ACE’s Center for Policy Analysis and author of Federal Student Loan Debt: 1993 to 2004.
Though the ACE study does not break out loan data by race, debt from attending for-profit institutions is particularly relevant to blacks, says King. Research shows African Americans are 12% of all bachelor degree graduates, but 25% of recipients of certificates and associate degrees from for-profit institutions.
A less expensive option is an associate degree from a two-year community college. The median amount borrowed for those graduates was $5,879. However, for-profit institutions have two advantages over public two-year colleges: degree programs can be completed more quickly and classes are scheduled for working students’ convenience.