The latest report on the problem comes from the New York Times, which did a piece on Sunday about students looking for job opportunities who were were lured into high-cost trade schools. The students frequently ended up with no jobs, but loads of debt.
It's a familiar topic to me. A year ago, I did a piece for Forbes called The Great College Hoax. While reporting that story, I interviewed dozens of people who had been told that the key to high-income work was a degree. They didn't differentiate between a degree from a trade school and one from a four-year university. Yet, every one of the trade school graduates was drowning in debt and those who were working typically had jobs that paid them only slightly more than they'd earned before attending. Meanwhile, their debts were so high that some speculated the loan payments would follow them to the grave.
Schools promising jobs frequently brandish government statistics on the increased lifetime earnings of college graduates. But many fail to mention that your job prospects will vary dramatically based on the degree you receive and the institution from which you graduate. Indeed, the job promises are contingent on graduating, but many trade schools graduate only a fraction of those who start. The rest are left indebted and without a degree.
If you are tempted to go to trade school to get a better job, do this one thing first: Check the school's graduation rate with the Department of Education. The National Center for Education Statistics has a great online tool, where you can find out a vast array of information about specific institutions. Type the school's name into the search bar and it will bring back an index of information, including the cost of enrollment and the "retention and graduation" rates. That's the percentage of students who stay after the first year and who graduate within the prescribed time frame, as well as longer time frames (and at all).
For anyone paying for college, this is pivotal information. It tells you whether your total cost of college is likely to be the annual enrollment cost times four, or the annual cost times six or eight. And it tells you whether you're likely to ever receive the degree that promises to get you a better job.
An example of what you can learn with this tool: The annual cost of tuition at Le Cordon Bleu, a Las Vegas trade school that trains you to be a chef, is $19,000, plus about $3,000 in books and supplies. Your total cost with room and board is roughly $30,558 annually. Only 58% of the students attending in the fall of 2007 returned for the 2008 semester.
The school's graduation rate within the "normal" time frame is a sorry 21%. Those graduating within 150% of the prescribed time is a still pathetic 52%.
Comparatively, if you attended University of California, Los Angeles (better known as UCLA), the estimated tuition and fees are $7,551 for in-state residents. Total estimated cost of attendance, including books, room and board is 22% less than the chef school -- $25,131 to be precise.
Retention and graduation rates at UCLA? Some 97% of the full time students came back for a second year, and 65% of those starting in 2002 completed their degree program within four years, while 89% competed within 6 years.
Trade school recruiters make money by telling you that you can get a job by attending their program. Before you sign up and hook yourself into a lifetime of student debt, check out their claims. Your future financial health depends on it.