For-profit colleges: where most students default on their loans

Low Loan Repayment Is Seen at For-Profit Schools (New York Times)

     Adding new fuel to the growing controversy over regulating for-profit colleges, the Department of Education on Friday released data on student-loan repayment rates at the nation’s colleges and universities, listing the institutions by name.
     Although the department issued no analysis or comparison of repayment rates by sector, outside advocacy groups that analyzed the data found that in 2009, repayment rates were 54 percent at public colleges and universities, 56 percent at private nonprofit institutions, and 36 percent at for-profit colleges.
     “I think it’s notable that the for-profits are the only type of school where the majority of students are unable to repay their loans,” said Debbie Frankle Cochrane, program director at the Institute for College Access and Success, which has called for tighter regulation of for-profit institutions.
     At some for-profit colleges, the repayment rates were startlingly low. For example, 33 of the 86 Corinthian Colleges’ Everest locations had repayment rates of less than 20 percent — and at several, the rates were less than 10 percent.
     At the headquarters of the University of Phoenix, the nation’s largest for-profit education company, the repayment rate was 44 percent, compared with 38 percent at DeVry and 27 percent at Kaplan University, a unit of the Washington Post Company.
     “I think this data could have a powerful effect on institutions and students,” said Terry Hartle, senior vice president at the American Council on Education. “No reasonable person will want to go to a school where only one in five students can pay back their student loans.”
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     For-profit colleges enroll less than 10 percent of the nation’s students, but get almost a quarter of the $24 billion the government provides in Pell grants and Stafford loans. And students at for-profit institutions have a higher default rate than those who attend public or nonprofit colleges….