Monday, March 15, 2010

Clawback Time!

"For-profit trade schools have long drawn accusations that they overpromise and underdeliver, but the woeful economy has added to the industry's opportunities along with risk to students.."

Peter S. Goodman, "In Hard Times, Lured Into Trade School and Debt," The New York Times, March 14, 2010.

Now, which ring of Dante's Inferno is reserved for private trade schools, along with payday lenders and used car dealers. Admission requires ripping off people when they are down. We should have a lot of candidates in today's world.

We need to fashion some type of clawback for proprietary schools (and perhaps other trainers) when graduates get a certificate and lots of debt but no job. I remember one of the founders of the Center for Employment Training (CET) saying that "getting a job is graduation."

How would a clawback work? Why not have responsibility for repaying Pell grants, etc. revert to the trade school (the owners and stockholders) if a student can't get a job once they have graduated, have their certificate and are certified ready to work. Of course the job matching process is confounded by unforeseen economic changes, personal choice and lots of other factors. But we could figure out how to incorporate.

How would clawbacks work for nonprofit and community college trainers. Well, that's tougher. We typically rely on full transparency, training certification,etc.-- but we even have trouble making those work. It hurts when you don't get a job at the end of any training, even if you don't pay full freight.

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