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.