Students at For-Profit Colleges Are Most Likely to Default on Loans, Report Says

[marmar]

from the Chronicle of Higher Education:



Students at For-Profit Colleges Are Most Likely to Default on Loans, Report Says
By Libby Nelson


Washington

Students at for-profit colleges and universities are more likely than students at private and public institutions to default on federal student loans, according to a report issued today by the Government Accountability Office.

The report calls for more oversight of the basic skills test that students without a high-school diploma or GED must pass in order to receive federal aid. It also urged the Department of Education to write clear policies to ensure that students can't use "diploma mills" to get a high-school diploma and thereby gain access to federal grants and loans.

The report says that some proprietary colleges help students obtain high-school diplomas from diploma mills to become eligible for federal aid. In a separate audit of the test of basic mathematics and English skills, which gives students without a high-school diploma or the equivalent access to federal student aid, GAO analysts found that test administrators at a local for-profit college gave out answers and changed students' answer sheets so that they would be eligible for federal funds.

Students at for-profit colleges receive 19 percent of federal student aid, which includes Stafford and Perkins Loans as well as Pell Grants for low-income students. During the 2007-8 academic year, students at more than 2,000 proprietary colleges received more than $16-billion in loans, grants, and campus-based federal aid. ............(more)

The complete piece is at: http://chronicle.com/article/Students-at-For-Profit/48552/

[exboyfil]

1. I think we should go even more radical than stopping

loans to for profits.

What about loaning money on majors and academic performance that actually indicates an ability to pay the money back? Schools and majors that have default problems go to the back of the line in getting loans.

Alternatively go to "subprime" loans for higher risk individuals. Those individuals who stand the best chance of servicing the loan get the lowest rates just like in mortgages etc.