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For-Profit vs. Public Colleges: Which Leads to a Bigger Payday?

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For-profit schools have come under scrutiny in recent years for leaving students with sizable debts, poor graduation rates and less-than-favorable job prospects. Newer government regulations require for-profit career colleges to better prepare students for the workforce or risk losing access to federal student aid. These rules seek to protect students from taking on debt they cannot repay and to protect taxpayers from high loan default rates.

This month, the U.S. Department of Education dealt another blow to the for-profit college sector. Their November report shows that public college graduates tend to have higher incomes than for-profit school grads in the same fields. In fact, the average annual difference was around $9,000. For workers in the $30,000 – $50,000 salary range, that’s a pretty significant number.

The report examined career programs at about 3,700 public and for-profit schools. A variety of fields were studied, including auto mechanics, pharmacy tech, welding and culinary arts. Around 1.3 million students are currently enrolled in these career college programs.

The Department of Education hopes to further protect students by releasing debt-to-earnings data in January 2017. College career programs that don’t meet the new requirements will be in jeopardy of losing federal student aid eligibility.

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