Students at For-Profit Colleges Default Faster on Student Loans
Seattle, Wash. (CollegetoCareers.com) – A recent report by the U.S. Department of Education holds that students who attend or transfer to for-profit universities are more likely to default on their college loans.
Alarmingly, statistics reveal that student defaults at for-profit universities occur within the first three years of attendance, and that these students and others are less likely to walk with their degrees.
According to The Seattle Times, students are more likely to default on their school loans at for-profit institutions because lower costs, often associated with four-year universities and state colleges, skyrocket without state limits and assistance.
The U.S. Department of Education’s report also documents the trend as something that continues to accelerate – a troubling indicator of the frustrations that students often encounter with for-profit universities and higher education institutions.
The Times reports that students transfer to for-profit universities from community colleges as a consequence of admissions difficulties with more popular, much larger four-year universities.
The numbers tell the truth: transfers by students from community colleges to four-year universities went up only 1 percent last year, while transfers to for-profit universities spiked at 32 percent.
A large part of the reason behind four-year university recalcitrance falls on state budget cuts, which eliminated much of the more accessible financial aid resources for cash-strapped and needy students, according to The Times.
The U.S. Department of Education report goes on to suggest that a big part of the reason for the higher attendance rates at for-profit universities lay with returning armed services members, who take advantage of their lower education costs and government assistance.
The Huffington Post reports that higher education analysts feel the trend toward for-profit institutions will leave students worse for the wear – particularly in light of loan defaults and rising tuition costs.
The story about loan defaults comes on the heels of reports that a number of for-profit institutions instruct their recruiters to use fear to encourage the attendance of low-income students.
What do you think? Should for-profit universities implement reforms for students, or it is the fault of higher admissions standards and education costs at four-year universities? Do you have any experiences with for-profit institutions?
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