Seniors at for-profit colleges are more than twice as likely to have accumulated dangerous amounts of education loans as seniors at other kinds of four-year colleges, according to a new report.
Almost30 percent of seniors at for-profit universities in 2008 owed at least$40,000 in college loans, an amount that could be excessive, accordingto a new analysis of the latest federal data by Mark Kantrowitz, publisher of Finaid.org and Fastweb.com.For comparison, only about 11 percent of seniors at private nonprofitcolleges–many of which charge higher sticker prices than typicalfor-profits–graduate with excessive debt, Kantrowitz found. Andexcessive debt was a problem for only about 6 percent of seniors at public universities,which are typically comparatively lower priced. That means newgraduates of for-profit schools are about five times as likely to haveborrowed heavily as new graduates of public universities.
The levels of excessive debt are already overwhelming hundreds ofthousands of new graduates. In March, the federal government released a preliminary report showing that almost 200,000 borrowers whose federal student loanscame due in 2007 were already in default. The schools with the highestshare of defaulters–11.3 percent–were the for-profit colleges. Only6.8 percent of public university studentshad defaulted within two years. And just 3.9 percent of students who’dleft private, nonprofit schools in 2007 had defaulted on their federalloans.