The Federal Reserve Bank of New York just came out with information that certainly paints a bleak picture of the success of attending a for-profit college. It surely seems to present data that would lead you to believe heading off to a for-profit college is more of a chance of failure than success and debt, loads of debt.
Let’s just look at the number of borrowers who default on their student loans by the type of school they attend.
As you can see, the default rate for for-profit schools it astronomical.
The Federal Reserve Bank says, “Between 2000 and 2007, total loan originations at four-year, for-profit schools grew by 430 percent. Between 2000 and 2012, when many of these borrowers would have entered repayment, NBD (number of borrowers in default) at these schools rose by more than 1,900 percent.”
The Federal Reserve Bank noted, “From 2004 onward, the default rate at for-profit institutions is roughly two to three times the rate at any other type of four-year institution.”
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But loan performance alone is not the most alarming part. As I’ve been rattling on for years about, the graduation rates at many of these schools is abysmal. Every student who attends using student loans but who does not graduate has the debt but not the degree or benefit.
The Federal Reserve Bank found, “As of 2015, only 29 percent of students at for-profit, four-year schools graduated within 150 percent of scheduled time, compared with 58 percent of students at all other institution types.”
That is nearly three out of four students never graduate. The for-profit school got the money and the students got the debt.
If you’d like to read more, click here.
And if you’d like to look at details about debt and graduation rates, click here.
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