“Our credit counseling service has been able to help many people who have maxed out their credit cards while paying for school,” says Stark,
Fort Lauderdale, FL (Vocus/PRWEB) March 07, 2011
A new study released by the Department of Education this February reveals that nearly one-in-four students who took out loans to attend for-profit colleges defaulted within three years of entering repayment. A New Horizon Credit Counseling, a nonprofit credit counseling organization, has noted an increase in the number of clients who have turned to them for assistance after plunging into debt to finance their education.
According to Steven Stark, Chief Operating Officer of A New Horizon, “many people utilize credit cards and other forms of unsecured credit to finance at least part of their education with for-profit colleges that promise impressive career prospects.” When these prospects fail to materialize, students often find themselves in the red, struggling with tens of thousands of dollars in student loan and credit card debt.
According to the study, the default rate for private, for-profit colleges sits at 25%. The public college default rate is around 11%, while the rate for private, nonprofit colleges hovers at 8%. A separate study conducted by the U.S. Government Accountability Office found a large cost discrepancy between comparable programs at for-profit colleges and their public and private non-profit counterparts. At least one for-profit college charged over $10,000 for a vocational certificate program offered at a nearby community college for $520.
Stark advises that anyone considering a for-profit college should shop around first, investigating comparable programs at other institutions and their costs. And while paying for college may be a challenge, Stark advises that students avoid using credit cards to cover tuition or living expenses. “Our credit counseling service has been able to help many people who have maxed out their credit cards while paying for school,” says Stark, “but the best advice is to avoid that pitfall in the first place.” Many experts advise students to borrow only federally backed student loans, and to borrow no more than they expect to make in the first year after graduating.
A New Horizon Credit Counseling Services is a nonprofit debt management organization that has been helping consumers since 1978. For more information about their programs, contact 1-800-556-1548. They can also be found on the web at http://www.anewhorizon.org, or reached via email at slieberman(at)anewhorizon(dot)org