For-profit collegesunsecured loan company rake in federal funds: Don’t participate!

The Associated Press reports that huge for-profit college chains are raking in huge sums of federal student loan dollars.According to the AP, “Last year, the five institutions that received the most federal Pell Grant dollars were all for-profit colleges, collecting more than $1 billion among them. That was two and a half times what those schools hauled in just two years prior, the AP found, analyzing Department of Education data on disbursements from the Pell program, Washington’s main form of college aid to the poor.”The problem isn’t that for-profit colleges are evil: it’s that they’re at a huge competitive disadvantage. Non-profit public colleges benefit from state funding, endowments, and they don’t have to pay taxes. With income taxes to pay, shareholders to generate profits for, no endowment, and no state funding, for-profit colleges simply can’t offer students the value that community colleges and public universities can.The result is that the average graduate of a 4-year for-profit college owes $33,000 upon graduation — $5,000 more than the average private college graduate. and more than $10,000 more than the average public college graduate. The result is high default rates, and a significant chunk of graduates who find their post-college lives weighed down by excessive debt.Please, please, please, please, please: if you or someone you know is considering attending a for-profit college, call your local community college or state college first to find out about convenient options like online classes that can be had at a tiny fraction of the price of similar offerings at for-profit institutions.