As of July 1, for-profit schools and certificate programs will have to prove to the U.S. Education Department that graduates will be able to repay their student loans.
As the cost of traditional college continues to skyrocket, trade schools are often touted as a way for students to cheaply learn an employable skill set. But it turns out those students, too, are being burdened with lots of debt. Complaints that for-profit schools saddle students with this high debt and low salaries has led to new regulations.
Job training certificate programs, often also called career colleges or trade schools, allow students to become certified in such fields as dental assistance, auto mechanics, cosmetology, culinary arts and massage therapy. Corporations that run these schools and profit from giving students these certificates are being criticized by the Education Department.
In a statement about the regulations, U.S. Secretary of Education Arne Duncan wrote, "Far too often, so-called career colleges leave students burdened with debt they'll never be able to repay and stick taxpayers with the bill."
A study put out by the Brookings Institution last week shows how low salaries are for graduates of these programs.
David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at Brookings, studied graduates of cosmetology trade schools and found that most did not make much money.
"Looking across the country at 671 cosmetology programs, we found that average earnings at 60 percent of the programs fell between $10,000 and $15,000," according to Wessel's study. "Only six programs produced graduates whose earnings average more than $20,000 a year."