For-Profit Colleges Lead The Way On Loan Defaults: Report
by Ashlee Kieler, Consumerist
SalFalko/Flickr
During the Great Recession, the growing industry of for-profit colleges promised millions of Americans a path to a higher education. But the high tuitions charged by many schools sent U.S. student loan debt soaring to more than $1.2 trillion. A new report claims that while for-profit schools charged top-dollar, many students were getting a cut-rate education, making it difficult to obtain jobs that will allow them to pay down this debt. The report from the Brookings Institute analyzed Department of Education data on student loans and earnings to look for any correlation between a student’s education and loan default rates. The authors found that the current student loan debt crisis is largely concentrated among nontraditional borrowers who attended for-profit schools and other non-selective institutions.
Prior to the recession, for-profit colleges and non-selective education institutions accounted for just a fraction of the student loan debt in the U.S., the report states. The report’s authors, Adam Looney of the U.S. Treasury Department and Stanford University’s Constantine Yannelis, found that the biggest changes for student loans began around the time the recession hit, when many consumers lost their jobs and returned to college in search of better opportunities.
Many of these nontraditional students were drawn to for-profit colleges …
Continue reading on consumerist.com, where you’ll find a link to the report and lists of the top 25 colleges who owed the most in 2000 and 2014 »