Fifty-four percent of students attending for-profit colleges dropped out without their degree during the 2008-2009 school year, indicates a report from the United States Department of Education. Their data also indicated 218 colleges and universities in the nation had a three-year drop-out rate of 30 percent or more.
Not only were drop-out rates in for-profit colleges climbing, the number of students defaulting on student loans has also skyrocketed. About 9.1 percent of student borrowers defaulted on federal loans during the year 2011, a number which climbed from 8.8 percent the previous year.
“Student loan defaults still continue to plague too many borrowers,” said to USA Today Debbie Cochrane, research director for The Institute for College Access & Success. “The numbers are distressing, and they needn’t be so high.”
While experts feel the poor economy plays a part in the reason for the defaulted student loans, they also speculate the rise in defaulted loans is due to more students opting for non-profit schooling. With such poor numbers, for-profit colleges are once again in the spotlight for the quality and clarity of the programs they offer.
Senator Tom Harkin, (D-Iowa), said in a statement that the data, “raises serious questions about the quality and value of the education students receive from these (for profit) schools.”
Harkin is not the only one to voice concern regarding the policies of for-profit colleges. The Huffington Post reports for-profit representatives recently went to federal court in an attempt to fight regulations requiring they disclose debt analyses to students.
“The for-profits want the American people to just hand them over millions of dollars worth of federal financial aid, and we have no means to assess the return on that investment,” said Jose Cruz, vice president for higher education policy at the Education Trust, a student advocacy group, to the Huffington Post. “It is important for the students to have the information that will allow them to gauge whether or not it’s a good investment for them.”
The Department of Education report indicates two for-profit schools lost their federal aid eligibility last year due to default rates of more than 25 percent.