New Report Shows Loan Default Rates Are Higher Than College Graduation Rates
A new report released by USA Today reaffirms and provides a visual aid for the never-ending student loan debt struggle that continues to plague the majority of college graduates.
via USA Today
More than 260 colleges and universities in 40 states, the District of Columbia and Puerto Rico have students who are more likely to default on their loans than full-time freshmen are to graduate, an analysis of federal data shows.
Hundreds of thousands of students are enrolled at the 265 schools, nearly half of which are operated by for-profit colleges, a USA TODAY analysis shows. About one-third of the schools they attended were are public community colleges.
“These colleges should set off a red flag in the minds of prospective student borrowers — and their parents,” says Andrew Gillen, research director for Education Sector, a non-profit, non-partisan think-tank on education policy that gathered the federal data. “Many students at these colleges will no doubt take out loans, graduate and get good jobs. But the high default rates and lower graduation rates suggest that many will not.”
The Education Sector analysis, a snapshot of Education Department data, looks at U.S. colleges where at least 100 borrowers started repaying loans in 2009 and the equivalent of at least 250 full-time students were enrolled in the 2009-10 academic year, the latest year for which complete data are available. In a new report, “In Debt and In the Dark,” the Education Sector identified 514 of what it calls “red flag colleges,” schools where the percentage of borrowers who started repaying loans in 2009 and had defaulted by 2012 was higher than the schools’ graduation rates. USA TODAY focused on 265 “red flag colleges” out of 2,711 schools where at least 30% of students borrow.
Leaders of community and for-profit colleges long have argued that graduation and default rates have more to do with the challenges faced by their students, who are among the neediest and most likely to struggle academically, than with the quality of their institutions.
We’re just wondering exactly what it will take for the folks in Washington to get the picture and do something about all of this, because almost nothing seems to be getting their attention at present. SMH.