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Is that for-profit certificate worth the debt?

NEW YORK — One sign a degree from a for-profit school may not be worth pursuing? You won’t be able to repay your student loans after graduating.

New data from the Department of Education reveals low repayment rates among recent graduates of for-profit schools, which usually offer certificate programs or degrees in fields such as criminal justice or health care. The numbers were released as part of the Obama administration’s proposed rule to cut off federal aid to schools that don’t achieve certain repayment rates.

The Washington Post Co., which owns the Kaplan school chain; Corinthian Colleges Inc.; ITT Educational Services Inc.; and Strayer Education Inc. had repayment rates below 35 percent.

Recent undercover tests by the Government Accountability Office also found some schools used deceptive recruiting tactics and encouraged applicants to falsify financial aid forms.

The findings are troubling because students at these schools tend to be low-income and in search of better-paying jobs; the vast majority have household incomes of less then $50,000. Most work full time while attending school.

Here how to size up whether it’s worth taking on debt to attend one of these schools.

Be Wary of the Hard Sell

For-profit schools know that most of their prospective students will be able to tap into federal financial aid and pay tuition. As such, the marketing efforts can get aggressive.

“Be very suspicious of high pressure sales tactics and an unwillingness to share basic info about cost,” said Lauren Asher, president of The Institute for College Access & Success.

Case in point: my search on Everest University Online’s website yielded no answers on tuition costs. Yet after filling out an online application form for more program information, my phone rang within minutes.

An eager representative ignored my question about tuition, and insisted that we had to work through a few questions first. I had to firmly repeat the questions several times before a second representative gave me an answer: $404 per credit. It takes 96 credits, or $39,000, to complete the paralegal program I inquired about.

A representative of Corinthian Colleges, which operates the school, did not immediately respond to inquiries about why tuition costs are not listed on the site.

Comparison Shop

Prospective students often learn about for-profit schools through a TV ad. After calling a school to inquire about classes, they often sign up without shopping around for better options, said Mark Kantrowitz, publisher of FinAid.org.

That’s because these schools tend to do a lot of handholding through the application process. For example, the vast majority of students at for-profit schools have completed the form for federal financial aid, compared to less than half of students at community colleges, according to FinAid.org.

So if someone makes an impulse decision to become a chef, signing up for classes would be very easy.

“It’s a very short step,” Kantrowitz said.

Community colleges aren’t nearly as solicitous. They’re also not as expensive. The majority of students at community colleges have no student loans upon graduation. Of those that do, the average debt is $10,000. By comparison, nearly all graduates of for-profit schools have student loans; the average debt is $17,000.

What’s more, almost a quarter of graduates of for-profit schools owed at least $40,000 in student loans, according to The Project on Student Debt.

Check Public Information

The release of national rankings for the quality of traditional four-year schools is an annual event. But there’s no similar resource for those looking to attend a for-profit school.

“In this climate, the burden is really on consumers to sift through inadequate information,” Asher said.

Still, there are ways to do some homework on a particular school.

To start, the Education Department’s list of student repayment rates can be found at tinyurl.com/28fjo3j. Click on the link for “Cumulative Four-Year Repayment Rate by Institution.” The rates may give you an idea of the quality of the school’s program. Remember that the repayment rates are for the entire school; rates may differ significantly for particular programs within the school.

If you’re applying for a certificate or degree in a particular field, find out the licensing requirements in your state. Contact the state agency in charge of licensing and ask whether the school and program you’re considering are accredited.

You can also look up for-profit schools on the Better Business Bureau’s website at www.bbb.org. Companies are assigned grades based on the number of customer complaints and they work to resolve them.

Finally, try talking to employers or professionals in the field you’re pursuing. Ask about their criteria for hiring, and check whether the school you’re considering addresses those skills in their marketing materials.