A new federal report says two New Mexico for-profit career schools failed to prep their graduates to find jobs that would adequately pay off their student debts.
But the administrators at the Southwest Acupuncture School’s programs in Santa Fe and the Toni & Guy Hairdressing Academy’s cosmetology program in Albuquerque have challenged the Department of Education’s findings. They say the classification either fails to represent their individual programs or is based on bad data.
Additionally, the Santa Fe University of Art and Design’s cinematography and film and video production, and the Pima Medical Institute’s now-defunct massage therapy and therapeutic massage programs received a “zone” rating, which is essentially a warning category.
“When a student makes a personal and financial decision to attend college, the student must feel confident that it is a sound investment in his or her future, not a liability that will further defer his or her dreams,” said U.S. Secretary of Education John B. King Jr. said in a statement.
The U.S. Department of Education report is tied to federal rules introduced in 2014 that govern which programs can receive federal money for student aid and aim to protect students from shoddy career training programs.
A program has failed to meet the Gainful Employment Regulations if its graduates’ annual loan repayment amount is greater than 12 percent of one’s total earnings, or greater than 30 percent of one’s discretionary income. The government defines that term as the difference between income and 150 percent of the poverty line.
Programs receive a zone classification if the average graduate’s loan repayments make up 8 to 12 percent of their total earnings or 20 to 30 percent of their discretionary income. Most of the evaluated programs are based on students who graduated between July 1, 2010, and June 30, 2012.
Programs that receive fail or zone rates could become ineligible for federal student aid, according to the Department of Education.
The federal agency assigned ratings to roughly 8,600 programs nationally, 17 of which are in New Mexico. Overall, more than 800 programs failed to meet the new federal guidelines and roughly another 1,230 were placed in the “zone” category.
Anthony Abbate, the CEO of the Southwest Acupuncture College, said he has appealed the classification of the school’s acupuncture and oriental medicine program. He said the school’s loan default rate, the number of students who haven’t made a payment on their loans for 270 days, is usually between zero and 2 percent. That was true for students in the 2013 and 2012 group. Students in the 2011 group had a 6.6 percent default rate, according to the federal government.
“If our students are paying their loans, they’re gainfully employed,” Abbate said.
Programs at the acupuncture school run from $57,000 to $70,000, according to the school’s website.
Joe LiRosi, the local franchise owner of Toni & Guy, said the data the Department of Education used to give the program its fail classification are wrong. He said the federal agency knows about the issue and the school has been working to provide accurate data that “prove that all of our programs will pass and are in good standings.”
The Toni & Guy cosmetology’s program tuition and fees run $15,000 for the program, according to the school’s website.
The massage course is no longer offered at Pima, according to the group’s president, Fred Freedman, because of low demand for it.
And Rachel Lighty, a spokeswoman for the Santa Fe University of Art and Design, said the school understands the Department of Education’s intentions, but said, “This one-size-fits-all metric threatens professions in the arts for which success might be measured differently and over a longer period of time.”