In Rising Student-Loan Defaults, More Fodder for Fight Over ‘Gainful Employment’ Rule

The percentage of borrowers defaulting on their student loans has risen for a third year in a row, reaching an 11-year high of 7 percent, according to U.S. Education Department data released on Monday.

As usual, the "cohort default rate" for 2008, the most recent data available, is highest at for-profit colleges, averaging 11.6 percent, a 0.6-percent increase over the previous year. The rate for public colleges is 6 percent, up from 5.9 percent. For private colleges, the rate is 4 percent, up from 3.7 percent.

The numbers represent the share of students who entered repayment in the 2008 fiscal year and defaulted by the end of last September.

In a news release, Education Department officials used the data to make their case for a crackdown on for-profit colleges. This past summer the department issued a package of proposed rules aimed at protecting students and taxpayers from the consequences of student-loan defaults, particularly at proprietary institutions. Final rules are due by November 1.

"While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not," Secretary of Education Arne Duncan said in the news release. "Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use."

Click through for full article text.

THE CHRONICLE OF HIGHER EDUCATION

Leave a Reply

Be the First to Comment!

Notify of
avatar