For-profit colleges and their advocates are now attempting to exploit minor problems with a GAO report about career colleges to argue that “the GAO should immediately retract its study and testimony [and] the Department of Education should push the ‘pause button’ on the entire rule [limiting the amount of debt for-profit colleges can force on students] while Congress conducts a thorough review.”
Good luck with that. At the same time, however, there’s still more bad news coming out about the industry.
According to an article by Andy Kroll at Mother Jones:
According to new data from the DoE released on Wednesday, 46.3 percent of all loan money lent to students at two- and four-year for-profit colleges in 2008 would eventually go into default. By comparison, the overall default rate in 2008—lumping together loan money given out to students at community colleges, for-profits, and traditional undergraduate and graduate schools—was only 15.8 percent. You know something’s wrong when the for-profit default rate, dollar per dollar, is nearly three times higher than the rest of academia.
Almost half of all loans funding for-profit schools are held by people who won’t be able to pay that money back in a timely fashion. I eagerly look forward to see how for-profit advocates will attempt to spin this new information.
For-profit college advocates point out that they’re serving an important American demographic. As the
Career College Association Association of Private Sector Colleges and Universities explains:
Career college students are predominantly working adults looking to achieve the American dream by obtaining an education directly related to their career goals. Forty-three percent are minorities and almost 50 percent are the first generation in their families to pursue higher education. Over 50 percent of dependent career college students come from families with an income of less than $40,000. More than 75 percent of the students are employed while they are enrolled in career colleges.
Well they may be “looking to achieve the American dream” but with student loans default rates at 46.3 percent, it looks like they’re mostly failing in that effort. That breakdown probably has a lot to do with the schools they choose to attend.