Post secondary education student debt reality and perception in the canadian career college sector
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Post-Secondary Education Student Debt: Reality and Perception in the Canadian Career College Sector. 25 th National Student Financial Assistance Research Network Conference - Baltimore. Leesha Lin, Canada Student Loans Program Human Resources and Social Development Canada.

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Post secondary education student debt reality and perception in the canadian career college sector l.jpg

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


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Our plan to fill knowledge gap for private, for-profit sector started in 2006

  • Statistics Canada does not collect data for Canada’s 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


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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.


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Demographics of student population - Gender analysis of Student loans administrative data for public v. private sectors

  • Students attending private, for-profit colleges tend to be female (72% compared to 69% for community colleges, 58% for university).


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Demographics of student population - age analysis of Student loans administrative data for public v. private sectors

  • 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


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Demographics of student population: with dependants analysis of Student loans administrative data for public v. private sectors

  • 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.


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Demographics of student population: Low-Income groups analysis of Student loans administrative data for public v. private sectors

  • Some disadvantage groups were disproportionately represented among the low income group – single parents and Aboriginals.


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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.


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Demographics of student population: Prior PSE comparison

  • 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.


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Demographics of student population: Parental Education comparison

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.


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Demographics of student population: comparison

Barriers to not entering PSE immediately after high school


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Private, for-profit programming comparison

Program enrollment length:

69% survey enrolled in program of one year or under


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Private, for-profit programming comparison

Most Common programming – private sector

  • students most commonly take programming related to Health (38%) and Media or Information Technology (24%).


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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


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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.


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Private, for-profit programming : Financing a program

  • 53% of students use loan to cover cost of their program


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Private, for-profit programming : Financing a program

  • community college students have greater resources from family (59% v. 26%), personal savings (47% v. 19%), current employment (70% v. 8%)


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Private, for-profit programming : Financing a program

  • 53% of students had student loans, which cover 44% of cost


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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.


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In-Study Interest Subsidy: borrowers by institution type Repayment

  • 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.)


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Repayment Capacity by Institution Type Repayment

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


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Use of Repayment Assistance - No interest, no payment (IR) Repayment

  • Borrowers who attended private, for profit schools were less likely to use interest relief (IR) assistance, but stayed in IR longer


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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)


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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)


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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.


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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.


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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: [email protected]


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