This spring, the U.S. Department of Education announced that it was discharging the federal student loans of 28,000 students who attended Marinello Beauty School. In taking such action, the department was following a rule that allows it to discharge any federal loans taken out by students who were deceived by their school. The department found that the school misled students about the quality and content of programs; exploited students’ unpaid labor; failed to train students in key skills, such as how to cut hair; and left students without the skills to pass certification exams, find employment, and repay their loans.
Unfortunately, the case of Marinello Beauty School is not an isolated incident. For-profit cosmetology schools like Marinello have faced multiple actions from regulators as well as consumer class actions alleging deceptive practices, exploitation of unpaid labor, and other misconduct. The risks to cosmetology students extend beyond such illegal conduct. Students attending such programs typically borrow thousands of dollars through student loans and invest months of their time in training, only to receive near-poverty-level earnings after graduation. Three years after completing their program, the average cosmetologist earns only $16,600 a year,6 which is $8,600 below the average earnings of workers with only a high school diploma, and only $3,000 above the single-person poverty guideline. In addition, cosmetology students graduate with an average of $10,200 in student loan debt.
Read the full report at The Century Foundation here.