For-profit colleges blamed for many student defaults: U.S. federal study

Students who attended forprofit colleges were twice as likely or more to default on their loans than students who attended public educational institutions, according to a federal study published Wednesday.

The report by the National Center of Education Statistics looks at students who began their undergraduate education in 2003 and defaulted on at least one loan over the next 12 years. Fifty-two per cent of the students who attended for-profit schools defaulted on their loan. That’s compared to 17 per cent for those who attended a fouryear public institution and 26 per cent at community college.

The report also finds that the for-profit students defaulted on their federal student loans in greater numbers than their predecessors eight years before.

The report comes as Education Secretary Betsy Devos rewrites rules that had been put in place by the Obama administration to protect students who said they were defrauded by their for-profit colleges.

Of the students who started college in 2003, 27 per cent had defaulted on at least one loan after 12 years, the study found. For those who started their undergraduate education in 1995, the default rate was 18 per cent. The rate of full repayment was 20 per cent in the younger group, compared to 24 in the older group.