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Student loan defaults surge across public, private colleges

New data collected by the U.S. Department of Education shows the number of students defaulting on their student loans has increased during the past year.

U.S. Secretary of Education Arne Duncan announced that the national cohort default rate from the fiscal year 2008 national cohort default rate was 7 percent, a 0.3 percent increase from fiscal year 2007, according to a press release from the Department of Education.

Default rates at public institutions rose from 5.9 to 6 percent, private institutions rose from 3.7 to 4 percent and for-profit schools rose from 11 to 11.6 percent, the press release stated.

The data collected represents the cohort of borrowers whose first loan repayments were due between October 2007 and the end of September 2008, and who defaulted before the end of September 2009. During this time, there were about 3.4 million students who entered repayment of and 238,000 who defaulted on their loans.

Students attending for-profit institutions are the most likely to default, Duncan said. During Award Year 2008-09, students at for-profit schools represented 26 percent of the borrower population and 43 percent of all defaulters.

“While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not,” Duncan said. “Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use. This is a disservice to students and taxpayers and undermines the valuable work being done by the for-profit education industry as a whole.”

Read the full story at the Daily Cavalier.

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