Seniors at for-profit colleges are more than twice as likely to have accumulated dangerous amounts of education loans as seniors at other kinds of four-year colleges, according to a new report.
Almost 30 percent of seniors at for-profit universities in 2008 owed at least $40,000 in college loans, an amount that could be excessive, according to a new analysis of the latest federal data by Mark Kantrowitz, publisher of Finaid.org and Fastweb.com. For comparison, only about 11 percent of seniors at private nonprofit colleges--many of which charge higher sticker prices than typical for-profits--graduate with excessive debt, Kantrowitz found. And excessive debt was a problem for only about 6 percent of seniors at public universities, which are typically comparatively lower priced. That means new graduates of for-profit schools are about five times as likely to have borrowed heavily as new graduates of public universities.
The levels of excessive debt are already overwhelming hundreds of thousands of new graduates. In March, the federal government released a preliminary report showing that almost 200,000 borrowers whose federal student loans came due in 2007 were already in default. The schools with the highest share of defaulters--11.3 percent--were the for-profit colleges. Only 6.8 percent of public university students had defaulted within two years. And just 3.9 percent of students who'd left private, nonprofit schools in 2007 had defaulted on their federal loans.
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