WASHINGTON — About one-quarter of students who took out federal loans to attend for-profit colleges defaulted within three years of starting repayment, according to a new federal analysis. The 25 percent default rate in the for-profit sector, part of an Education Department report to be published today, was up from a 21 percent rate estimated in December 2009.
Loan defaults are on the rise throughout higher education because of economic troubles. The three-year default rate for public colleges is now about 11 percent, up from about 10 percent in the previous report. The rate for private nonprofit colleges is about 8 percent, up from about 7 percent.
Federal officials cautioned that the new data, which measured defaults over three years among a group of borrowers who entered repayment in fiscal 2008, are preliminary and are not being used for enforcement. Still, the figures underscore growing challenges facing the for-profit sector.
The Obama administration is considering new regulations related to student debt and loan repayment — an effort that federal officials say would help ensure that students in for-profit colleges find “gainful employment.” The Washington Post
