Private career colleges are expensive. Is there a better/cheaper alternative? Yes and no.
These private schools teach you the skills you need to perform a specific job or launch a small business. You can usually get the same vocational skills training for free at a community college…but it will take you longer to get your diploma if you go this route.
The question is, which way to go?
Is it simply a question of time and money? Should you go the private route if you don’t have time? Should you go the community college route if you don’t have the money? Should you go for a side job and work your way up? Is it worth it to start borrowing money? Here’s a process by which you can make the decision for yourself:
1. Determine all costs for each choice and the time it will take you to become employable in the field.
Let’s assume you want to become a nurse because you love helping others and it’s a high paying vocation. You currently work as a translator earning $30,000 a year. If you go to private school, you’ll pay $35,000 for tuition and books every year. It will take you three years of study before you’ll be qualified to work.
If you go to public school, your tuition and books will only cost you $10,000 every year. But it will take you five years to complete all your studies.
2. How much income do you give up during that time?
Remember, you currently earn $30,000 a year. If you go to nursing school, you’ll have to cut back to part-time. Your income will drop to only $10,000 a year for five years. That means it will cost you $20,000 a year in lost income per year.
3. How much more will you earn when you start working in your career?
In our example, let’s assume that a qualified RN could earn $80,000 a year – that’s $50,000 more than you currently earn.
4. Put it all together in a nice spreadsheet and decide yourself.
Scroll around the spreadsheet above. You’ll see that with the private career college, you start making money in Year 4 but it takes you until Year 7 before you’ve paid yourself back for all your tuition and reduction in earnings during the time you spent in school.
Now scroll down to the public school sheet. You can see that you’ve paid yourself back by Year 8. What you see here is that the private school doesn’t save you all that much time and money, but it is a slightly better financial move.
If your main objective is to earn as much as possible as soon as possible, the private career college is the way to go. But if going to a private career college creates additional stress (because you don’t have the money to pay for the education), maybe going the slower route works better. You might even decide that neither alternative makes sense and look for great jobs that don’t require a degree instead. Or you might look for a great second job rather than a new career.
You can add another column in this exercise to determine if it makes sense to borrow money to go to private school or not. You can also use this type of exercise to compare any two financial alternatives.
The main point I’m trying to get across is that you when you’re making a decision about private career colleges or just about any other major financial decision, don’t “feel” it out. Think it out. Work out the numbers and decide accordingly.
Have you ever gone through such an exercise and decided to do something that wasn’t intuitive?
photo by Tambako the Jaguar, Flikr
Bret @ Hope to Prosper says
The money is only part of the equation.
As Humbeau already pointed out, accreditation is a big issue. One huge advantage of going to a community college is that you can always transfer your credits to a university. Another advantage is that you can count on your degree being respected by potential employers. They will know you have a minimal level of competence and you didn’t get your degree on a laptop in your pajamas.
There are so many shaky private vocational colleges and some of the coursework is questionable. I have interviewed graduates for jobs in the computer industry and some tech schools are much better than others. The most important part of going to college is the education, not the diploma.
It’s also important to realize that some private schools face massive accreditation problems. While accreditation issues can comes up at public schools; the accrediting agencies are different – and more strict in their cases.
If a school doesn’t accept a FASFA for Financial Aide run, don’t walk away from it.
Neal@Wealth Pilgrim says
Wendy….thanks. Right…this was for illustration but I’m so glad you brought this up….also glad you got a good laugh.
I know this is just for illustrative purposes, but I shouted with laughter at the idea that a nurse can make $80,000 out of the gate. Only in the very highest-paying cities (San Francisco and New York) would a new nurse make that much, and only pre-tax, and only if s/he could find a job, which is unlikely.
Private career colleges sell students HARD on what their earning capabilities will be after they graduate. They will not tell the truth about the job market–which is why there are many, many new nurses in this country who can’t find any work and whose loans from those private “colleges” are starting to come due. (The forum http://www.allnurses.com will show you their desperate stories.)