For-profit colleges have highest rate of default on student loans
The rate of default on student loans is higher for students who attended a private, for-profit university. New data from the U.S. Department of Education indicates 25 percent of students who attended for-profit schools defaulted on their student loans. Public school attendees had a default rate of less than 11 percent.
Nonprofit school students default the least on student loans
Students who attend institutions of higher education often get saddled with a lot of debt. The huge loans students have to borrow to finance education means some are going to default on repayment. Those who attend a private, for-profit university are most likely to default on the unsecured loans needed to cover tuition, according to Reuters. A recent report by the Department of Education examined default rates from the year 2008 and found students who were borrowing money to fund an education at a private, for-profit college defaulted 25 percent of the time. Students at public universities had a default rate of 10.8 percent. Students from private, non-profit universities defaulted least, defaulting 7.6 percent of the time.
Government could pull funding
Pending legislation could yank the rug out from under private, for-profit colleges when it comes to federal funding. A new proposed rule would cancel any federal advance cash to any university with a loan default rate of 30 percent or more. Numerous for-profit universities already fit that criteria. A trade group of for-profit universities, the Association of Private Sector Colleges and Universities, protested the proposed ruling and the DOE report, saying that the dismal economy contributed to those figures. The APSCU also contends that data from 2008 doesn’t get started to 2011.
Students under growing strain
Worries about post-education employment and debt, among other factors, has led to far more students having a negative view of their own mental health, according to the New York Times. Whether someone is off to be an Arizona Wildcat or to roll with the tide in Alabama, having to take out larger loans and come out of college needing debt consolidation is not the most pleasant prospect.