Out of work and looking to retrain? Avoid for-profit technical colleges

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The New York Times reports that many laid-off, right-sized, downsized and fired workers are looking to technical colleges and other training programs to develop new skills that will, they hope, lead to long-term job security.

The Times piece mentions 25-year old Jonathan Beam, who enrolled in a course at Everest College to become an electrician. The reporter notes that "The course, which he has nearly completed, runs nine months and costs $14,000. Much of that is covered by a grant and loans, he said."

Then it tells the story of Amy Sutton, a former real estate agent who is taking classes at Everest as well with the goal of finding a job in the health care field -- at a cost of $10,000.

I have a piece of advice that is really a prayer. I am begging you: Please. please, please call up your local community college to inquire about programs it offers before you even think about signing up with one of these for-profit shops like Everest College. Devry University, another for-profit institution, is offering $1,000 per semester "employment gap scholarships" to people who have been laid off recently.

But even with that, community colleges are cheaper because they receive a large amount of public funding and pay no taxes. For-profits receive no direct public funding (although they can sometimes participate in the same student loan programs non-profit institutions do), have a higher cost of capital, pay taxes, and must report profits to shareholders.

It isn't that for-profit colleges are evil. It's just that they're at a huge competitive disadvantage compared with publicly-funded institutions, and if money matters to you, you should start with public resources first.

Amy Sutton is paying $10,000 to for a one-year medical assistant program in Portland, Oregon. Portland Community College also offers a nationally accredited one-year certificate program in medical assisting and it's priced at less than $4,700 -- 43 credit hours at $76.10 per hour plus books, membership dues, licensing costs and other assorted fees. If you're out of work you already know this, but $5,300 isn't chump change and it could be the difference between paying cash and having to enter the dangerous world of student loans.
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