For-profit schools are doing a lot of interesting thing as they try to avoid facing near-certain punishment under the Department of Education’s new gainful employment rule, which will limit the amount of debt students in those schools can assume. Some companies created fake student advocates. Some made their employees write the Department. And now there’s the “or your money back’ plan.
According to an article by Daniel de Vise in the Washington Post:
In a letter to Education Secretary Arne Duncan, released late Friday, Kaplan CEO Andrew S. Rosen proposed what amounts to a money-back guarantee for customers in its for-profit Kaplan Higher Education division.
The letter, dated Sept. 8, was in response to the Education Department’s proposal to regulate for-profit college programs that officials say don’t consistently yield “gainful employment” for their graduates. Rosen suggested that by making the introductory portions of its for-profit higher education program “risk-free,” and the tuition refundable, the company could address any concerns over how students are recruited into the program or whether they get what they pay for.
The Kaplan proposal is interesting because it appears to give students the option of getting their tuition back if the program doesn’t work out for them. But it’s actually a little more complicated.
Under Rosen’s plan, people could get their money back if they were unhappy with the introductory parts of Kaplan University (which is owned by the Washington Post Company). But the only point of going to a career college is to improve one’s career prospects. It’s hard to tell if the education program is a scam in the early parts of the program. It’s really only the job that comes after the program that indicates whether or not the debt was worth it.
