Grant cuts hit students at many for-profit colleges

Grant cuts hit students at many for-profit colleges »Play Video
San Joaquin Valley College students are seen Wednesday, Aug. 1, 2012, in Bakersfield.
BAKERSFIELD, Calif. (KBAK/KBFX) — Students at many for-profit colleges will be looking for other ways to pay for their courses now that the state has cut these schools from the Cal Grant program. The state is out with new standards for which schools are eligible, but many students dispute how the program's being handled.

"I'm not OK with it," Sandy Felix told Eyewitness News outside San Joaquin Valley College on Wednesday. "I'm a single mom, I already work 35 hours a week, I'm coming here full time. It's just not right."

SJVC is on the long list of schools no longer eligible. Eyewitness News checked at three others in the Bakersfield area, Kaplan College, Santa Barbara Business College and University of Phoenix.

On Tuesday, the California Student Aid Commission put out a list of the schools no longer eligible, saying 154 schools that had participated in the Cal Grant program in the current year have now been eliminated, and this could affect some 14,000 students.

"A lot of us were looking forward to getting that money," SJVC student Nick Coley said. He was with a large group of students in the respiratory therapy program. They all said hearing from a reporter was the first time they found out about the cut.

As we stood there, a SJVC spokeswoman told the students to expect emails from the school later in the day, and they'd also be referred to school financial officers for help.

Fellow student Peter Orr said he depends on the Cal Grants.

"I applied, I think I was approved, and now you tell me I might not get it. So that kind of sucks," he said.

Under the new state standards, schools must have a graduation rate of 30 percent or greater and must have student loan default rates of 15.5 percent or less.

The SJVC students said they believe graduation rates are good at their school.

"They have a very high success rate with the students here," Orr said.

According to tables of statistics released by the Student Aid Commission, SJVC has a graduation rate of 46.2 percent, which does meet the new standard. But the school's listed with a student loan default rate of 21.5 percent, which is higher than the new requirement.

Santa Barbara Business College is listed with a graduation rate of 32.5 percent but default rate of 28.2 percent. No one from the school responded to requests for a comment, and the campus in Bakersfield was empty. Eyewitness News was told students are on a week's break.

At Kaplan College, the state shows a loan default rate just over 26 percent, but graduation at 62 percent. Students outside the Bakersfield campus told Eyewitness News it's a good program, and students do graduate and get jobs.

Kaplan Higher Education Campuses spokeswoman Andrea Roebker said the new rules will hurt students who need financial help.

"It's shortsighted to close off educational opportunities that can lead to better employment prospects, especially during California's tough economic times," Roebker wrote in a email statement.

According to the state's data, the University of Phoenix has a loan default rate of about 21 percent, and a graduation rate of 18 percent. School spokesman Ryan Rauzon took strong exception to the numbers.

"It's faulty data," Rauzon told Eyewitness News. He said the federal government is comparing their students to first-time, first-year students at state universities and colleges.

Rauzon said students at Phoenix often bring credits with them, they're often working, and have families and different financial obligations.

But, state officials say they're protecting public dollars with the standard change.

"The commission has argued for years that the best way to protect students, parents and taxpayers is to make sure Cal Grants help students get into solid programs that deliver proven educational and career value," Aid Commission Chairman Barry Keene said in a statement. "Eliminating schools with high loan default rates and low graduation rates is a sensible way to do that."

Schools that still qualify in the Cal Grant program include community colleges, such as Bakersfield College, and private and public nonprofit universities, such as California State University, Bakersfield.

The list is based on standards set by the Legislature and the governor in California's new budget, with the aim of saving state funds.

"I think it's probably not the right place to cut," SJVC student Peter Orr said. And Sandy Felix agreed.

"It's our education, why don't they cut welfare?" Felix argued. "I'm sorry, but don't cut, like, our school education funds."

University of Phoenix spokesman Rauzon contended, "The state took the easy way out."

Rauzon said lawmakers should go back in January when they're drawing up the next budget and come up with a plan that provides "equal treatment" for all students. He said the current standards and cuts are unfair to adult and working students.