At 265 Colleges, Loan Default More Likely Than Graduation
Plus: Stafford loan interest rates double
By Evann Gastaldo, Newser Staff
Posted Jul 2, 2013 7:20 AM CDT
Updated Jul 6, 2013 7:00 PM CDT
ITT Technical Institute in Canton, Michigan.   (Wikimedia Commons)

(Newser) – Bad news if you're planning to attend Texas College in the fall: You've got a 38.2% chance of defaulting on your student loans ... and just a 12% chance of graduating. USA Today found 265 colleges and universities across 40 states where the loan default rate is higher than the graduation rate, and hundreds of thousands of students are enrolled at these schools. Almost half of them are for-profit colleges; another third are public community colleges.

Last summer, a Senate investigation found that for-profit colleges (like ITT, which has a 34.1% default rate across all its schools) tend to have worse graduation and default rates than nonprofit ones; leaders of these schools say this has more to do with their needy, struggling students than with the schools themselves. The analysis arrives as the 3.4% interest rate on federally subsidized Stafford loans expired yesterday. If Congress doesn't take action before its August recess, the newly doubled rate will stand, the Washington Post reports. A vote on extending the 3.4% rate is expected next week, but Republicans will likely filibuster it.

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Knarf
Jul 7, 2013 4:49 PM CDT
We're raising a generation of deadbeats with little or no accountability and learning only to party and drink beer. Its no wonder they can't pay back their loans. They're having too much fun conniving ways to get out of their obligations. So now they're crying out that the system has failed them. Most of these 200 or so colleges have bank accounts that could choke a horse yet they continue to rake in their loot from a bunch of ill informed youths that have yet to find their way in society. I remember when I was a young man, my father told me that I would have to help out with my schooling costs and I thought that I would die. Yet, I found a way to hold down 2 part time jobs selling newspapers and setting pins in a bowling alley. My parents put my money in a separate bank account to cover my tuition, books and clothing. My father told me that if i failed my classes, he would put me into a public school and charge me room and board. When I left for college, the first thing I did was find a job at the local hamburger joint and random yard work and car cleaning. We had a family tragedy as my dad finally drank himself to death and I became the sole supporter of my mom, grand mother, brother, and my dog. I found out what responsibility was very quickly yet, I managed to keep a positive outlook. I think, I couldn't even imagine paying off a student loan much less support a family so maybe I was lucky. I'm a very happy man, knowing I did the right thing in my life and I'm being acountable even as I reach the end. I just wish everyone could eventually feel like I do. I never became a rock star, a doctor, lawyer or a CEO. But, perhaps I'm the lucky one, to know I paid back.
arclight6970
Jul 7, 2013 1:11 PM CDT
Private tech schools provide entry level avenues to jobs however there primary concern is MAKING MONEY. I attended one of these private so-called tech schools. The one I attended has now changed its name because of the numerous complaints lodged with the VA, State education commission as well as other federal governmental agencies. This scam is perpetrated by the education mills that overpromise and under deliver. The agencies that are supposed to oversee these "institutions" have little teeth in their regulations to punish these companies. In addition these private companies simply disappear overnight and re-form under another name doing business as usual. When ever you sign a student loan agreement you are obligated to this debt and even bankruptcy does not forgive this debt. Additionally as long as H1B visas and outsourcing jobs overseas will continue to erode any job that can be either outsourced [entry level and above] or can have the same job done through the H1B process also known as the modern version of indentured servitude.
Greatminds2012
Jul 7, 2013 12:06 PM CDT
We are raising a generation of deadbeats. Very sad.