- A newly released USA Today analysis identifies 265 colleges and universities in 40 states, the District of Columbia and Puerto Rico as "red flag colleges" where student loan default rates are higher than graduation rates [for the full list of "red flag schools," see USA Today's report].
- The analysis used data from the U.S. Department of Education's Education Sector analysis, which identified a total of 514 schools where the percentage of students defaulting between 2009 and 2012 exceeded the percentage of graduates.
- Two-year and four-year for-profit schools combined claim the biggest share of "red flag colleges" with 44% reporting higher loan default rates than graduation rates, followed by two-year public community colleges with 33%.
- For-profit and community college leaders say the two rates have more to do with their students' circumstances than with institutional quality, though lawmakers have suggested tying student aid funding to school outcomes.
From the article:
... "These colleges should set off a red flag in the minds of prospective student borrowers — and their parents," says Andrew Gillen, research director for Education Sector, a non-profit, non-partisan think-tank on education policy that gathered the federal data. "Many students at these colleges will no doubt take out loans, graduate and get good jobs. But the high default rates and lower graduation rates suggest that many will not." ...