If default rates are the problem . . .

The same day the Obama administration hit for-profit colleges for high default rates on federal loans, President Obama was lauding historically black colleges and universities, whose students have an even higher default rate, writes Cato’s Neal McCluskey.

Both the black colleges and the for-profit sector disproportionately serve first-to-college, low-income and minority students who are less likely to earn a degree, get a good job and be able to pay back loans. If lowering default rates is the priority, the feds will have to stop loaning money to high-risk students.

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Comments

  1. Shouldn’t all colleges be treated the same? Hmmmm…

  2. Yeah, but not all colleges have alumni who donate to elected officials or who are elected themselves.

  3. I bet all colleges do contribute to elected officials via a PAC

  4. Require the colleges…whether for-profit or non-profit…to carry an exposure on some % of the student loan debt themselves. This will give them an incentive to avoid admitting people who they know are not going to graduate and also to steer students toward courses of study that will not be economically worthless after graduation.