Posts
The number of college students defaulting on their federal student loans is climbing, and those who attend for-profit schools remain the most likely group to default, according to new government stats released Monday.
For the year ended Sept. 30, 2008, 7% of federal student loan borrowers defaulted within two years of beginning repayment, up from 6.7% the previous year, according to the U.S. Department of Education.
The default rate for students at for-profit schools rose to 11.6% from 11% over the same period.
Those default rates are used to determine which schools will remain eligible to participate in student aid programs.
The measures now in use "fall far short of capturing the full range of defaults or distressed borrowers," said Lauren Asher, president of the Institute for College Access & Success, an advocacy group in Oakland, Calif.
"Right now, there's no information that tells us whether career education programs are delivering quality training for jobs," she said.
Default rates among for-profit college students were almost twice the 6% found at public nonprofit colleges, and almost three times the 4% rate at private nonprofits, officials said.
For-profit colleges, in particular, are fighting proposed Education Department regulations that would cut off federal aid if too many of their students default or don't earn enough after graduation.
"While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not," Education Secretary Arne Duncan said. "Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use."
The Obama administration is toughening its lending standards with greater scrutiny of defaults, and it's proposing to monitor loan repayment rates and incomes among students who have attended for-profit colleges
0 comments:
Post a Comment