It's obvious that Westwood College can't defend it's own practices so they resort to trying to smear students and anyone else who exposes their lies and empty promises. That's just pathetic. Clean up your act, stop ripping off students and you won't have to be so angry and defensive.
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But the school wasn't always so empathetic, according to Inez Morris, who was student-aid director at a Westwood campus near Atlanta for a year before being fired in 2006. She told NEWSWEEK that aid officers were instructed not to explain the full cost of a Westwood degree nor the terms of the loans. "I don't think [students] understood the interest rates, I don't think they understood that it was not a federal loan, or they didn't understand what they were signing," says Morris, who is working with the plaintiffs' lawyers in the class-action suit against Westwood. Often, she says, the loans were originated to close balances for students who had dropped out but had not paid for the time they spent at the school. She also adds that students discovered they had high-interest loans only when notified by a letter after leaving school.
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Not all vocational, technical, or online schools charge as high an interest rate as Westwood did, nor do they structure their programs in quite the same way. DeVry, which charges 12 percent interest on its Educard loan program, says the school doesn't have the financial mechanism to run a complicated program with multiple rates. "We are an educational-services provider, not a bank," says DeVry spokeswoman Joan Bates. Apollo Group, owners of the University of Phoenix, is one school that has declined to offer direct-to-student loans. "[We] made the deliberate decision not to engage in private lending because, quite simply, we believed it was not in the best interests of our students," says Sara Jones, senior vice president for public affairs.
Rudawsky says Westwood gives students detailed descriptions of the financial-aid process, both in writing and verbally, and that financial-aid counselors help each student to fill out applications for federal aid. "Westwood goes above and beyond to create transparency for students and to walk them through every step of the process," he says.
Bailey says that process wasn't strong enough, and he says the interest-rate reduction doesn't cut it, either. "Here I am stuck with [$20,000] of debt and a degree that's useless," says Bailey, who is now working a near-minimum wage job at the Long Beach sanitation department while he works toward a master's degree online via the University of Phoenix. He says he couldn't get a job that would pay his loans, so he entered a new degree program in order to defer loan payments. According to Bailey, no traditional school was willing to accept his Westwood credits. That's common practice—most traditional nonprofit schools rarely accept transfer credits from for-profit institutions because of differences in the accreditation process. "I'm asking for my loans to be forgiven and for them to pay for education at a traditional school; I still want an education so I can start a career."
The Westwood case aside, the direct-to-student loan market is likely to continue growing. Consumer advocates like Loonin say they hope a proposed consumer-finance-protection agency might crack down on the way such loans operate. But with regulatory efforts tangled up in higher-profile causes like credit-card reform, high-interest loans may be on the tenure track.
© 2009
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