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The Endless Debt of Trade School Graduates

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I was driving past the Culinary Institute of America the other day and I couldn’t help but wondering how such an education is possibly worth the cost. This is a good cooking school, but they pump out graduates into a world where pay for restaurant workers is complete garbage. A few elite chefs make bank, most struggle, and would even if they didn’t have debt. The same goes for hairdressers:

When she was in cosmetology school, Tracy Lozano had a love-hate relationship with weekday mornings. Those predawn moments were the only time she saw her infant daughter awake, and she savored them. When the time came to hand the baby to her own mother, she said in a recent interview, she would stifle her tears, letting them roll only when she had closed the door behind her.

She would put on her game face when she pulled into the parking lot of the Iowa School of Beauty, just outside Des Moines. From what Ms. Lozano could tell, a cosmetology license was a realistic way to ensure a better life, and she was willing to make sacrifices. While also working nights at a Pizza Hut, she borrowed $21,000 to cover tuition and salon supplies and put in eight-hour days at the school for the better part of a year.

The amount of time Ms. Lozano spent learning to give haircuts, manicures and facials was enormous, but the requirement was set by the state, and she didn’t much question it. She was determined to earn enough money to move out of her mother’s house. Only a few weeks after getting her cosmetology license in 2005, she was hired at a local Great Clips.

The job, though, paid just $9 an hour, which meant that her days double-shifting at Pizza Hut weren’t over. Even with tips, Ms. Lozano didn’t earn more than $25,000 in any of her first few years as a cosmetologist. For years, she relied on food stamps and health insurance from the state. She couldn’t cover living expenses and keep chipping away at her loan payments. Thirteen years after graduating, she still owes more than $8,000.

This should be criminal under any circumstances, but the fact is that the beauty schools lobby to keep it this way.

What Ms. Lozano didn’t know was that the state-regulated school system she had put her faith in relies on a business model in which the drive for revenue often trumps students’ educational needs. For-profit schools dominate the cosmetology training world and reap money from taxpayers, students and salon customers. They have beaten back attempts to create cheaper alternatives, even while miring their students in debt. In Iowa in particular, the companies charge steep prices — nearly $20,000 on average for a cosmetology certificate, equivalent to the cost of a two-year community-college degree twice over — and they have fought to keep the required number of school hours higher than anywhere else in the country.

Each state sets its own standards. Most require 1,500 hours, and some, like New York and Massachusetts, require only 1,000. Iowa requires 2,100 — that’s a full year’s worth of 40-hour workweeks, plus an extra 20. By comparison, you can become an emergency medical technician in the state after 132 hours at a community college. Put another way: An Iowa cosmetologist who has a heart attack can have her life saved by a medic with one-sixteenth her training.

There’s little evidence that spending more hours in school leads to higher wages. Nor is there proof that extra hours result in improved public safety. But one relationship is clear: The more hours that students are forced to be in school, the more debt they accrue. Among cosmetology programs across the nation, Iowa’s had the fourth-highest median student debt in 2014, according to federal data.

Walk into any hair salon in Iowa and you’re likely to find a stylist making $10 an hour who loves her job but is struggling to pay off her student loans. Over 10 months, in visits to a dozen salons and in conversations with 37 former Iowa cosmetology students — and an additional 25 in other states — we heard a variety of opinions about how much training the profession requires and the financial returns it offers. And we heard again and again how the dream of becoming a professional hairstylist, or someday owning a salon, can be stymied by debt.

First, the greatest thing the government could do is forgive the student debt of everyone. That would be the greatest stimulus of all time. Second, this simply hamstrings a generation of people. It’s funny how this comes through in old people whining about millenials not buying houses or cars or going to suburban strip malls for shopping. Who has the money! I think people really underestimate the bitterness of younger people toward the stock market and to the entire structure of modern capitalism. They might not be able to articulate an alternative, but everything about the American economy they are told will work for them does not. They make the “right” choices and they turn out sour. This is a terrible situation. And it shows no sign of abating.

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