Defaults exceed grad rates at 514 colleges

Loan default rates are higher than graduation rates at 514 colleges and universities nationwide, according to Education Sector. Nearly half of the “red flag” institutions are operated by for-profit colleges and about one-third are community colleges.

Skepticism is widening about projections of a widening job skills gap, but most think there’s a shortage of “middle-skills” workers with post-high school education and training but no bachelor’s degree.

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  1. Stacy in NJ says:

    These schools need to lose their accreditation. They need to develop a little sympathy for their soon-to-be indebted student body and enroll only those capable of graduation. Denying them access to student loan and grant qualification should be the first step.

    • The schools are acting in a rational, if not noble, manner. They’re getting while the getting’s good and while it’s nice to try to hold universities to moral standards most of us wouldn’t meet it’s an exercise in self-gratification.

      To solve the problem remove the cause which is the torrent of government money. No amount of rules or punishments will stop the practice, there’s just too much to be gained and too many smart people with nothing better to do then find ways around any impediments to that torrent of government money.

      • Stacy in NJ says:

        I agree with you, allen. The subsidies create the tuition inflation. With no incentive to actually graduate their students, they’re just looking more mo’ money.

    • Mike in Texas says:

      Yeah you wouldn’t want to give them folks access to an affordable education. They probably get all uppity and forget their position in society, right Stacy?

      • Stacy in NJ says:

        Your comment would be meaningful, Mike, if they were actually getting an education; they’re not. Their not graduating. Duh. What they are getting is loads of debt.

        • Stacy in NJ says:

          They’re not ughhh

        • Mike in Texas says:

          Well Stacy, did it ever occur to you one of the reasons they may not be graduating is b/c of the crushing costs of tuition?

          When I started college in 1981 it was still possible to work your way through college. Now even a public university could costs near 20K a year. How is an 18 or 19 year old supposed to accomplish that?

  2. Mike in Texas says:

    Well of course. Nothing benefits the corporations like a bunch of desperate job seeking graduates who had to borrow enormous amounts of money because of skyrocketing tuition costs due to state funding cutbacks. Its a sweet deal for the banks too since we get to pick up the tab.

    • Stacy in NJ says:

      Tuition rates were skyrocketing PRIOR to state cutbacks and had been for years. Try again.

      • Mike in Texas says:

        I agree with you partially, tuition cost have been skyrocketing for years. But here in Texas it started in 2003 when the Republicans were kind enough to deregulate tuition AND cut state funding.

        My daughter is currently in a nearby state university, not one of the top tier colleges like UT or A and M, and the costs, even with her living with us and not having to purchase a meal ticket, runs about 8K per semester. Could you have afforded that at 18? I know I couldn’t have.

  3. First, some colleges are so weak that they should be allowed/encouraged to close. Denial of all federal/state funding would do it; no student grants/loans, no faculty grants, closure of all varsity sports etc. Second, students need to stop admitting kids who aren’t prepared for college-level work (acc to SAT/ACT scores). That would both shrink enrollment and drastically reduce the need for various student support services. Third, schools should get out of the student-amenties arms race. They also shouldn’t be building dorms for any students except freshman and honors-program students. Private enterprise can build apartment complexes. Three of my kids went to large, flagship state schools in college towns with all sorts and varieties of privately owned and run student-only apartment complexes.

  4. Roger Sweeny says:

    It occurs to me that Mike and allen are both blaming corporations, the difference being that Mike is blaming corporations in general and allen is blaming colleges and universities in particular.

    And actually, this reminds me of the housing market boom and bust. In both cases, the corporations, banks in one and universities in the other, think they are doing a public service, providing home ownership and providing an education. In both, the government is encouraging them to take on as many new customers as possible. In both cases, the corporations are taking in a lot of money. And in both cases, it seemed like a no-lose proposition for the corporations. The banks thought that housing prices would continue to go up at a rapid clip, so it didn’t matter if the borrowers couldn’t pay. They could always sell and pay the mortgage in full. The colleges get their money up front and don’t lose any of it no matter how badly the students do.

    In both cases, we have what in 20-20 hindsight looks like “predatory lending.”

    • Not quite, Roger. I’m blaming the conditions.

      Human nature dictates that where there’s a commons a tragedy inevitably follows. Subsidies represent a commons, as in “the tragedy of”, in that wealth can be gotten not through free enterprise, which requires voluntary exchange based on perceptions of value, but through grabbing as much as possible as quickly as possible.

      That desire to get something for nothing is built into us and the sooner that fact’s understood and excepted the sooner we can be about the business of dealing with commons in a manner appropriate to their value.

      Some commons are inescapable. The world, for instance, is a dangerous place so rough men who stand ready in the night to visit violence on those who would do us harm are one commons we can’t do without.

      Similarly, there are those in society who would do us wrong and we need a commons, in the form of a criminal justice system, to deal with that threat. But beyond a military to protect us from threats foreign and a criminal justice system to protect us from threats domestic the case for a commons – any commons – becomes a great deal more tenuous.

      So, I’m against corporate welfare for the same reason I’m against higher education welfare and farm welfare – it’s always a bad bargain.

  5. Roger Sweeny says:

    Right after I posted the above, I came upon this. It’s from a review of Tom Bennett’s book “Teacher Proof” at Daniel Willingham’s Science and Education Blog. Willingham is a Professor of Psychology at the University of Virginia. It seemed fitting here.

    “Bennett is right—too much of it [education research] is second-rate. There is an ugly system of self-interest that has produced the terrible research (and in turn, the need for Bennett’s book). Professors want to publish in peer-reviewed journals because that brings prestige. So publishers create “peer-reviewed” journals that have very low standards because journals bring them money. Institutional libraries buy these terrible journals (keeping them in business) because faculty say that they are needed so that faculty and students can keep up with the latest research. And universities are reluctant to blow the whistle on the whole charade because schools of education—second-rate or not–bring tuition dollars.”

    • Too bad Professor Willingham doesn’t follow the trail to its endpoint – the reason most education research is second rate.

      The answer is because there’s no reason for it to be first rate.

      Like teachers in a public school, no one cares whether the research is any good. The goal is to get published with the value, or even legitimacy, of the work being unimportant.

      The result is Gresham’s Law applied to scholarly works – bad drives out good.

  6. As I’ve posted before, the most overrated product in America today is the Bachelor’s degree.

    The fact that only between 27-35% of all students who start a 4 year degree program finish it in 6 years (or less) is testament to this fact.

    The student who takes out these loans and finds that he or she cannot pay them back is stuck with them for the rest of their life (read ‘indentured servitude’), and that the colleges have been pretty much pricing themselves out of the market for the last 15 years is no surprise.

    When higher education goes “KABOOM”, it will be a bigger mess than the housing crisis in terms of people damage.

    • Mike in Texas says:

      Bennett will not get much respect from the “reform” crowd, with his belief that experience trumps theory every time. In the “reform” world its better to have little experience, like Michelle Rhee, or no experience whatsoever, like Eli Broad, Bill Gates and a host of others.

      • Roger Sweeny says:

        Alas, much the same can be said for the establishment ed school crowd (who erect the hoops that most teachers must jump through).