Le Cordon Bleu school closing

[jimmyev]

Originally Posted by Hopes

Shouldn't the public have a right to decide what type of debt they want to carry for their education?

I suppose - IF I'm not paying for it. Unfortunately the reason they want to stop loaning to students going to these schools is because of their default rate and I am paying for it. Considering the same programs are offered at community colleges for much much much less, community college credits are much much much more transferable, and the employment prospects seem to be better after community college, I don't know what the big deal is.

My sister went to some silly program at Sanford Brown, got some assistance from welfare and a big old loan. She defaulted, so thank you to all the taxpayers for paying for her program. My niece went to some silly program at Le Cordon Bleu for ten or twenty thousand, cobbled together with the GI Bill and loans. Then she went to work at McDonalds. She defaulted. Now you're paying for her loan too. I'm sure they thank ya'll.

Actually what happened is your tax money (and mine) flowed from us to the owners of Sanford Brown and Le Cordon Bleu for nothing in return. My sister and niece were merely the delivery vehicles for our money. I think they call that Corporate Welfare.

[Hopes]

The article didn't specify that the funding lost to schools were via student grants and student loans.

The article said "federal funding." Universities get federal funding in many ways, not only via student grants and student loans.

Regardless, your sister and neice would have likely defaulted regardless of what school or program they attended.

There's a certain population with a specific mindset that will make them more likely to default on loans regardless of where they attend.

I'll bet these programs attract a greater percentage of that segment of the population and that's why their default rates are higher.

[greg42]

In 2010 a two-year associate's degree from Pittsburgh's Le Cordon Bleu cost $42,660. According to financial aid data for the 2008-09 school year, 47 percent of all students received federal student loans, worth more than $6.5 million to the school.

That was right in the article, federal student loans.

For-profit schools and universities (this one is not a university, although the company that owns it does run some of those too) wouldn't typically get any other federal funding. They get initial funding the way any other for-profit company gets funding: investors.

The question in play for the proposed rule you're talking about is: Are these entities over-promising and under-delivering? The reason it's relevant to the federal government is because many people have loans that are backed by the federal government. If they default because the school is not really that effective, then the government will be on the hook for those loans.

But that's really a different discussion. The idea that this played very heavily in closing the Pittsburgh branch of a chain is pretty dubious, given that they aren't closing anywhere else.

[Q-tip motha]

Originally Posted by MathmanMathman

Will that affect DeVry and Art Institute as well?

The cost seems high at $40k+ and a cook's pay right out of school is probably not good. If it really is that important to Pittsburgh's restaurant scene, maybe the city should step in and negotiate. I mean they did it for useless stuff like Lazarus etc. but this might be a good government subsidy for a change.

I think you'll probably see the enrollment at the International Culinary School at AIP swell a little from this. Hopefully they'll step their game up. The kitchen labs are excellent and taught by exceptional chefs, but the courses on the managerial/business side of things could use some restructuring.

Great news for people in the city working in this field though. Fewer people competing for the wages at the city restaurants means better wages overall. Why pay a line cook with years of experience to do a job when you can plug in some food network obsessed 20 yr old with stars in his/her eyes who will do it for less?

For any aspiring chefs, or people who know them take the following advice to heart: Do not go to culinary school unless you want to work in a hotel or for some major corporation. Unless you're going to the CIA in New York, or overseas to Paris, save your money. Otherwise it costs way too much, and you'll be in debt for the rest of your life. If you want to be a chef, open your own restaurant, or want to work in a restaurant (even fine dining) just work. Start small at some little pizza shop, then take a job at a sit down restaurant (something simple like applebees/eat n park), and just slowly work your way up to the type of food you want to do. Chefs are not made by a diploma, or completing a program. Its a tiring process with long hours, a hazardous work environment, and low pay.

If you want to be the next food network star you're better off keeping your day job, cooking at home for fun, and putting videos of your hobby on youtube.

[Q-tip motha]

Originally Posted by greg42

The question in play for the proposed rule you're talking about is: Are these entities over-promising and under-delivering?

Both.

Art institute worker due before senators - Pittsburgh Tribune-Review

[LEFT]"An Art Institute of Pittsburgh employee is scheduled to testify at a Senate committee hearing today that the school's owner, Education Management Corp., pressured workers to mislead students about job placements after graduation"

I can tell you that this happens at AIP as well. I vividly recall sitting down with the admissions rep in 2007, being fed a load of crap about what the program would entail, how comprehensive it supposedly was, how much I would supposedly make in the industry, and how it would prepare me for my future. It was common knowledge to those of us who worked with PCI grads that their program left many of them somewhat less prepared to work in the industry. That's not saying much and I'll admit that the individual student has more to do with their success than what they're taught at either school.

I was smart enough to cut my losses when I realized that I had gotten all that the program had to offer me (the kitchen labs) before my debt got too high, and that I didn't need the degree to pursue my career goals. Most people stick with it with the belief that the degree with actually give them an edge in the job market (nothing beats experience in this industry), and end up with student loan debt that closely resembles that of someone who just completed a graduate program. Unfortunately their pay doesn't justify the debt that they've incurred.[/LEFT]

[ML North]

There are a variety of issues with the for-profit schools, but it mainly boils down to the fact that a disproportional number students at these institutions default on government guaranteed student debt.

Because for-profit schools are not held to the same standards as state and private universities, and because their exposure to default risk is essentially zero, they have no incentive to provide students with the proper training and job prospects that will enable them to ever repay their student loans. The government is trying to mitigate this situation before it becomes the next housing bubble.

Here's a decent power point by Steve Eisman