American student loan debt is currently hovering around a trillion dollars, according to the Federal Reserve Bank of New York. Presidential candidates are making debt relief a major portion of their campaign platforms. Starting salaries for recent college graduates in anything other than hard sciences are stagnant, if recent college graduates can find jobs. It all sounds like bad news, but some students enjoy 100 percent job placement rates, and can start in jobs paying a decent wage plus full benefits, and have their final semesters fully paid for by their employers. They’re enrolled in community colleges, studying automotive technology.
According to Carlos Santiago, Commissioner of Education for the Commonwealth of Massachusetts, the current student loan debt crisis is the result of a drastic turn in higher education that began in the 1970s. “There was a shift in education funding that moved from grants for higher education to loans,” he told BestRide in an interview in December. “There was widespread support of public higher education grants that began with the GI Bill in 1943, up until about 1979. After that, the support for public education grants waned and student loans became the primary means of financing a college education.”
Today, the Federal Reserve Bank of New York estimates current student loan debt between $1.9 trillion and $1.27 trillion, with the lion’s share of that debt — $864 million — owed to the federal government in the form of federal student loan debt. An average, four-year, in-state public college education currently costs $19,584, according to the College Board, up 3.3 percent since last year. Private four-year colleges average $43,921, up 3.5 percent.
What are the prospects for students leaving private colleges, with an average of $35,000 in debt in 2015, according to an analysis of government data by Mark Kantrowitz of Edvisors in the Wall Street Journal. The report is all the more grim when students consider the average starting salary for all college graduates climbed 5.2 percent in 2015 to $50,651, but it’s heavily dependent on what degree was awarded. Engineering students could expect a starting salary around $60,000, but Bachelor of Arts recipients in English saw starting salaries in the $35,000 range.
Yet, there’s a yawning hole in many job sectors. “By 2017, an estimated 2.5 million new, middle-skill jobs…are expected to be added to the workforce, accounting for nearly 40% of all job growth,” according to a USA Today analysis from Economic Modeling Specialists International and CareerBuilder. Some of those secure, good paying blue collar jobs are centered in places like Texas and North Dakota where the oil business requires a constant stream of skilled workers, but across the country, skilled workers like pipefitters, electricians and carpenters are in high demand.
Add automotive technicians to that list. The directors of technician training programs at every school and OEM BestRide spoke cited a need between 1,500 and 4,000 new service techs per year, with starting hourly pay up to $16.50/hour, and the potential to make a six-figure income in short order.
Low cost of entry, a much less gloomy debt picture and a respectable starting salary? Why is there such a huge demand?
A Perfect Storm
FCA’s Director of Dealer Training John Fox made it clear: “We’re going to be short about 5,000 technicians in our dealerships between now and 2018, and I’m not sure that number isn’t light,” Fox said. “Most dealers could hire two additional techs today and have plenty of work for them to do.” And that’s just FCA’s Dodge, Chrysler, Ram, Jeep and Fiat stores.
Look at Florida alone. According to the Florida Department of Economic Opportunity, which responded to our information request:
- Florida employs 87,800 people at automotive dealers. 20,384 (23%) are automotive service technicians and mechanics
- Technicians outnumber salespeople at auto dealers. Sales positions in Florida represent 19,000 jobs in automobile dealerships
“Auto repair technicians are a vital part of the auto dealers industry, which employs hardworking Floridians across the state,” said Cissy Proctor, Executive Director of the Florida Department of Economic Opportunity. “Skilled labor positions are important to Florida’s economy and provide many opportunities for better paying jobs for vocational workers.”
What’s the root of the shortage? It’s a perfect storm: Service technicians who have been in the business for decades are retiring. Now combine that with the virtual disappearance of hands-on technical education at the high school level, and then cap it with a relentless stream of messages to high school students that the only way to success is to get a four-year degree from a traditional college.
Changing the Stigma
Automotive service technicians are highly specialized, well-trained professionals, but people still think of mechanics as poor students who couldn’t cut it in college classes.
It’s not that way in Germany, according to Steve Colburn, who coordinates organizational development and technical programs in Human Resources at Mercedes-Benz US International in Alabama. “In 2012, Markus Shaefer was our president,” he says. “He was from Germany and he wanted Mercedes-Benz in the United States to promote the same kind of technical education students were receiving in Germany. There, it’s highly thought of to enter into a technical training program.”
Colburn went to Bremen and Stuttgart to review Mercedes-Benz student training programs there, and came away with a fresh understanding of what an automotive technician does.
He says the biggest challenge is changing the perceptions of students, their parents and guidance counselors at the high school level, who have all stigmatized automotive service technicians as grease monkeys. “Technicians on modern Mercedes-Benz vehicles spend much of their time on computers,” he says. “They need to know about schematics and control units, wiring, CAN-BUS and FlexRay. They’re almost engineers.”
For-Profit Schools vs. Community Colleges
Industry-wide, automotive service technicians are in high enough demand that for-profit schools have attempted to corner the market on automotive training. But community colleges quietly provide either the same training, or even more advanced training supported by OEMs, for a fraction of the cost.
For example, UTI (United Technical Institute) provides an automotive technician program that costs $32,750 per year, according to UTI’s tuition calculator. The school claims to provide nearly $16 million in scholarships annually, but if the students parents make $65,000 combined in Massachusetts, tuition assistance is $0, according to the tuition estimator.
Community Colleges like MassBay Community College in Ashland, Massachusetts offer OEM-supported training at a fraction of the cost. A full course load of four classes at MassBay costs less than $5,000 per semester, or $10,000 a year for in-state students.
George Panagiotou — MassBay Community College’s Director of Automotive Technology — gave BestRide.com a tour of its Ashland facility. “Students are on a 12-week rotation and for 12 weeks they spend Monday, Wednesday and Friday in their automotive classes, and Tuesday and Thursday in their academic classes,” he says. “The following 12 weeks, they go to work at a sponsoring dealer, where they’re paired up with a mentor, and they’re getting paid while they’re working.”
MassBay has four shops that focus on manufacturers that provide support for the programs: Toyota T-TEN, MOPAR CAP, GM ASEP and a BMW-specific program that offers similar credentials to the BMW STEP program.
Students can either select a certificate program, or work toward an associate’s degree at Mass Bay. According to Massachusetts Higher Education Commissioner Santiago, the bonus for community college students is that all of those credit hours are transferable to other state universities, allowing students to make a choice about continuing their education even further. That’s not often the case with private, for-profit training schools.
Nick Pavloski — the lead instructor for MassBay’s BMW program — graduated from the UTI program in Chicago in the early 2000s, when he said UTI wasn’t “insanely expensive.” George Panagiotou notes that for-profit schools like UTI provide basic automotive knowledge at the entry level, but manufacturer specific components that provide certifications to perform warranty work are all ala carte at the for-profit schools. Those components are all part of the program at MassBay.
Community College Programs in 50 States
Programs like MassBay Community College’s Automotive Technology program exist in all 50 states.
Typical auto technology programs at the community college level teach a solid background of automotive maintenance and repair. Programs like those at College of Western Idaho and Minnesota State Community and Technical College provide technical education in:
- Maintenance and Light Repair
- Electrical/Electronic Systems
- Engine Repair
- Manual Drivetrain and Axles
- Suspension and Steering
- Engine Performance
- Automatic Transmission/Transaxle
- Heating and Air Conditioning
Programs in all 50 states are accredited by the ASE’s National Automotive Technician’s Education Foundation (NATEF) and give students the basic skills they need to maintain automobiles regardless of brand.
Where states differ is the availability of OEM support. For example, MassBay has students coming from all over New England because of the rich OEM support there. Nick Pavloski points out that if students come from a neighboring state that doesn’t offer the OEM support that they’re looking for, MassBay will enroll those students with in-state tuition, rather than charging out-of-state tuition rates.
OEM Support for Community College Programs
John Fox — Director of the FCA Performance Institute, which includes the MOPAR CAP program that trains service technicians — stresses the importance of OEM involvement in these programs. “We’ve experienced 70 months of year-over-year sales growth in our dealerships,” he says. “Those added vehicles in service means that our service tech infrastructure at the dealerships has to grow.”
Fox says that the relationship between dealerships and community colleges is all about keeping it local. “Most students going to community colleges are going to work within an hour of where they went to school. They’re typically not going three or four hours, or three or four states away. The key is that relationship between the schools and the dealers,” he says.
Rick Jackson — GM’s Global Technology Training Manager — puts GM’s need for new automotive technicians at the retail level at 2,500 new techs per year, and the need for service on GM’s cars is greater than ever. “Every car we sell has a maintenance program tied to it,” he says, meaning that customers are visiting the dealerships for every included service, rather than looking to independent service shops, at least until the maintenance program expires.
In the last year, General Motors’ ASEP program has donated 350 vehicles to 56 community colleges across the country. Students in the program are sponsored by local dealers that offer guaranteed placement after they finish the program. “As an example, a student will learn about brakes on a GM vehicle in the classroom and in the shop,” Jackson says, “and then she’ll be mentored by a master technician in the dealership, applying that knowledge with expert supervision.”
Manufacturers representing about 70 percent of all the vehicles sold in the United States have similar programs in every state in the country. Ford ASSET, Toyota T-Ten, Honda PACT and BMW STEP all train community college automotive tech students in the basics of auto repair, and then move them quickly into specific repair on the vehicles that those brands sell.
Along with the automotive technology programs manufacturers support at in all 50 states, at least two manufacturers offer programs at community colleges that train students to work at automotive manufacturing facilities. Mercedes-Benz in Alabama and BMW in South Carolina both offer two-year programs that graduate students groomed for skilled, high-paying jobs in at some of the world’s most advanced factories.
“We get about 700 applicants per year,” says Mercedes-Benz’s Steve Colburn. “About 220 applicants end up going through the entire selection process, which includes assessments and interviews at Mercedes-Benz International. Mondays and Wednesdays, students spend time in the classroom, and Tuesdays, Fridays and sometimes Saturdays, they work in the plant.”
Students in Mercedes-Benz’s Automotive Systems Technical Program at Shelton State Community College get paid as they learn, at a rate of $14.50 per hour. Students work those school hours, but also have the opportunity to take on more hours during semester breaks.
The program runs for six terms and students attend classes Monday thru Wednesday and work at the plant on Thursday, Friday and possibly Saturday. Beginning in the Fall of 2016, students can earn an Associate’s Degree.
Mercedes-Benz also runs the Mercedes-Benz Industrial Mechatronics program, which is a seven term program where students earn an Associate’s Degree in Industrial Electronics and a short certificate in Industrial Maintenance.
On top of the pay, Mercedes-Benz US International provides tuition support. In the first term, MBUSI contributes 70 percent of a student’s tuition provided they achieve a 3.0 GPA. That support bumps up to 80 percent in terms two and three, and 100 percent in terms four through seven, provided students maintain a 3.0 GPA.
Upon successful completion of the program, the top 75 percent of students are guaranteed a job — with full benefits including health insurance, including a retirement savings program — at Mercedes-Benz USI’s state of the art facility in Alabama.
Students attend the colleges full-time, while working part time at BMW’s Spartanburg facility. Students enrolled in production technician, maintenance, automotive, machine tool, robotics, or other manufacturing-related degree programs receive tuition assistance and a minimum of 20 hours of work at the factory while they learn. With a 2.8 GPA, students get tuition assistance from BMW.
Parents, guidance counselors and other influencers need to understand how great the opportunity is for students with an interest in technology. In all 50 states, the demand for trained, professional automotive technicians has never been higher. “With the cost of college the way it is, the idea of enrolling in college is daunting,” says FCA’s John Fox. “The value equation relative to a career in automotive technical training combined with the earning potential is hard to beat.”
BMW STEP Program: http://www.bmwstep.com/
GM ASEP Program: https://gmasep.org/
Ford ASSET Program: https://www.newfordtech.com/
MOPAR CAP Program: http://www.moparcap.com/
Toyota T-TEN Program: http://www.toyota.com/usa/tten/
Mercedes-Benz’s Automotive Systems Technical Program: http://www.mbusi.com/employment/training/71-mechatronics-training-program-2
Mercedes-Benz Mechatronics Program: http://www.mbusi.com/employment/training/109-mechatronics-program
Infographic: Technical education is one answer to the college debt crisis
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