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PostSecondary Education Student Debt: Reality and Perception in the Canadian Career College Sector

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25th National Student Financial Assistance Research Network ... second language schools or correspondence programs or mainly government funded programs. ... – PowerPoint PPT presentation

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Title: PostSecondary Education Student Debt: Reality and Perception in the Canadian Career College Sector


1
Post-Secondary Education Student Debt Reality
and Perception in the Canadian Career College
Sector
25th National Student Financial Assistance
Research Network Conference - Baltimore
Leesha Lin, Canada Student Loans Program Human
Resources and Social Development Canada
June 14,2008
2
Our plan to fill knowledge gap for private,
for-profit sector started in 2006
  • Statistics Canada does not collect data for
    Canadas private, for-profit sector
  • Canada Student Loans Program and Canada
    Millennium Scholarship Foundation commissioned a
    survey of this sector in 2006
  • Stage 1
  • Research for a list of private, for-profit
    schools (2,423). Review the list to include only
    eligible higher education schools excludes
    targeted second language schools or
    correspondence programs or mainly government
    funded programs.
  • Survey forms were sent to 1,622 private,
    for-profit schools
  • Based on form responses and further contacts, 384
    schools were eligible and agreed for in-class
    survey
  • Stage 2 In-class student survey Sep. 2006 to
    Feb. 2007
  • Stage 3 Follow-up survey of graduate of the
    in-school cohort (61)
  • Stage 4 Explore possibility for future
    follow-up surveys

3
Results from Stages 1 2 of our Research,
combined with analysis of Student loans
administrative data for public v. private sectors
  • This sector is more comparable to public
    community college programs.
  • Results of this survey are compared with the
    results from
  • the 2006 Canadian Colleges Student Finances
    Survey covering students attended community
    colleges and
  • 2003-04 Investing in Your Future, university
    and community college survey.
  • In addition, we compare some student loans
    take-up, repayment capacity for the public versus
    private schools, based on the administrative data
    files.

4
Demographics of student population - Gender
  • Students attending private, for-profit colleges
    tend to be female (72 compared to 69 for
    community colleges, 58 for university).

5
Demographics of student population - age
  • Students attending private, for-profit colleges
    are older, with 48 of students aged 25 years
    older.
  • In the public college system, 31 of students are
    25 years older

6
Demographics of student population with
dependants
  • Students attending a private, for-profit college
    are more likely to support a child or children
    under the age of 18 years. 33 of them support a
    child as compared to only 17 of the students in
    the public PSE system.

7
Demographics of student population Low-Income
groups
  • Some disadvantage groups were disproportionately
    represented among the low income group single
    parents and Aboriginals.

8
Demographics of student population Living
arrangements comparison
  • 46 of public university or college students live
    with parents, 17 live with a spouse or partner.
  • 19 of private career college students live
    alone, as opposed to 13 for public university or
    college students.

9
Demographics of student population Prior PSE
  • Prior to entering the private post-secondary
    education system, (35) students had completed a
    post-secondary diploma or degree.
  • 45 of public college students had completed a
    post-secondary diploma/degree prior to entering
    the public college system.

10
Demographics of student population Parental
Education
  • Predictors of Post Secondary Education (PSE)
    Participation
  • 41 of parents of students attending a private
    career college had no PSE compared to 27 of
    parents of students attending a public college,
    and 20 of parents of students attending a
    university.

11
Demographics of student population
  • Barriers to not entering PSE immediately after
    high school

12
Private, for-profit programming
  • Program enrollment length
  • 69 survey enrolled in program of one year or
    under

13
Private, for-profit programming
  • Most Common programming private sector
  • students most commonly take programming related
    to Health (38) and Media or Information
    Technology (24).

14
Private, for-profit programming main reason to
enrol - retraining
  • Reasons for Enrollment private for profit
    schools
  • Students in private career colleges enroll in
    post-secondary education for a wide range of
    reasons, with a change in career or to pursue a
    specific career (36) being the most frequently
    cited reason

15
Private, for-profit programming total tuition
to complete a program
  • 52 of students attended a private, for profit
    college paid over 10K for tuition. Average
    tuition is 14,364

Includes student loan borrowers only.
16
Private, for-profit programming Financing
  • 53 of students use loan to cover cost of their
    program

17
Private, for-profit programming Financing
  • community college students have greater resources
    from family (59 v. 26), personal savings (47
    v. 19), current employment (70 v. 8)

18
Private, for-profit programming Financing
  • 53 of students had student loans, which cover
    44 of cost

19
Private, for-profit programming Perception on
Debt Repayment
  • 42 of students that anticipate having student
    loan debt at the end of their program, the
    majority (54) anticipate it will take seven
    years or less to repay the debt.

20
In-Study Interest Subsidy borrowers by
institution type
  • Borrowers attended private, for profit schools
    are more likely to study for short program, with
    an average in-study of 1.8 years (2.5 years for
    public colleges, 3.1 years for universities.)

21
Repayment Capacity by Institution Type
  • Borrowers who attended private, for profit
    schools are more likely to default on their loans
    (33 v. 23 - public colleges, 13 -
    universities).

22
Use of Repayment Assistance - No interest, no
payment (IR)
  • Borrowers who attended private, for profit
    schools were less likely to use interest relief
    (IR) assistance, but stayed in IR longer

23
Private, for-profit Sector summary (1)
1
  • The preliminary findings for this sector include
  • Students are more likely to be older (median age
    29 v. 26 public college)
  • They are more likely to be female
  • They are more likely to have dependants (37 had,
    avg. 1.84)
  • Main reasons for attending are to change career,
    improve skills
  • The other reason is the length of program (69
    are 1 yr or less in length)

24
Private, for-profit Sector summary (2)
1
  • They are less likely to draw upon funds generated
    from working while in school (8 vs. 70).
  • They are less likely to receive supports from
    parents/family (26 v. 59 from community
    colleges)
  • They are less likely to have savings from
    previous employment (19 V. 47 from community
    colleges)
  • They are more likely to rely on government
    student loans (53 v. 29 from community
    colleges).
  • They are less likely to have non-repayable
    assistance from schools (5 v. 25 from community
    colleges)

25
Private, for-profit Sector summary (3))
1
  • For those who had student loans, they are more
    likely to default on their student loans (33 v.
    23 for community college or 13 for university
    students).
  • One of the reasons is that they are less likely
    to use repayment assistance (17.6 v. 19 for
    community college or 21.5 for university).
  • The other reason is probably due to their earning
    after graduation This will need to be confirmed
    from the Stage 3 report.

26
Private, for-profit Sector Next Steps
  • Stages 3 and 4 of survey results of graduate
    follow-ups
  • Monitor the Impact of new initiatives (to be
    effective August 1, 2009, if passes) on students
    attending private, for profit colleges
  • New grants for students from low- and middle-
    income families
  • Improved grants for students with dependants
  • Repayment Assistance Program (RAP) provides the
    following guarantees
  • under RAP monthly payments will be at
    "affordable" levels and borrowers with very low
    income are not required to make any payment
  • no loan for which the borrower makes the required
    payments will be repayable beyond 15 years after
    full-time studies.
  • under the proposed RAP model the maximum monthly
    payment for any borrower will be up to 20 of
    gross monthly income.

27
Private, for-profit Sector Contact Info
  • Contact Information
  • Leesha Lin, CMA, M.A.
  • Acting Director, Operational Policy and Research
    Division
  • CSLP Directorate
  • Human Resources and Social Development Canada
  • 200 Montcalm, Tower 2, 1st Floor
  • Gatineau, Quebec K1A 0J9
  • Tel (819)994-4518 Fax (819)953-6661
  • Email leesha.lin_at_hrsdc-rhdsc.gc.ca
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