The national student debt numbers are scary. The Federal Reserve Bank of New York estimates that Americans owe $1.2 trillion in student loans.
And about 3.6 million Americans, or approximately 1 in 6 borrowers, are defaulting on their student loans and haven’t made a payment in at least a year, according to the most recent numbers from the U.S. Department of Education.
In a TV interview on Friday, Larry Earle, the CEO of shuttered San Antonio-based for-profit Career Point College, gave the game away about what many for-profit colleges are all about. Defending his closed school against findings by the U.S. Department of Education that Career Point had engaged in financial aid fraud and mismanagement, and facing lawsuits filed by a growing number of his former students, Earle told an interviewer, “None of my salesmen have ever been accused of lying to students.”
To get a student loan at Broward College, one of Florida’s largest community colleges, you first have to sit through a two-hour financial lesson with Kent Dunston.
It’s a little like Scared Straight, the 1978 documentary designed to keep kids from ending up in prison.
Dunston’s lesson, though, is about scaring students into making good financial choices. Nationwide, student loans total more than $1.2 trillion. And schools now face punishment — even closure — by the federal government if the rate is too high.
You’re not going to borrow more than the amount of money you need to attend, Dunston tells the students. “You’ll be offered more. You don’t need it.”