Minnesota's for-profit schools still cashing in on student debt

Categories: Education
graduation.jpg
j.o.h.n. walker
Congratulations, debt slaves!
How can you tell when a college or university is taking advantage of its students? When the school is better at signing them up for student loans than it is at preparing them for the job market.

By that test, some Minnesota schools aren't doing so well. At 37 schools, at least one in ten students had defaulted on their debt within three years of their loans coming due. And as new statistics released today by the Department of Education make clear, our for-profit campuses have some of the worst results.

As we told you in this cover story, the explosion in for-profit schools over the past two decades has created an environment in which schools whose primary purpose is to make money for their stockholders sign students up for federal student loans, then turn huge profits while giving their students such a lousy education that when they graduate they can't get a job and end up defaulting on the loans.

The latest numbers show that the scam is still in full effect across the country: Fully one quarter of students from these for-profit schools have defaulted on their loans within three years of repayment coming due. At public schools, the default rate is less than half that. At private not-for-profits, it's less than a third.

The numbers for Minnesota schools aren't quite so egregious as the national picture, but many of them aren't pretty.

At Duluth Business University, more than one in four students has defaulted on student loans after three years. At Globe University, the default rate is 17 percent. It's nearly that at National American University, which has campuses in the Twin Cities and in several other states. At Brown College and the Minnesota School of Business, it's 15 percent. At Rasmussen it's more than 13 percent. Capella looks better, with a 7.5 percent default rate.

For comparison's sake, the worst default rate among the state's public four-year schools belongs to Bemidji State, at less than 7.3 percent. The University of Minnesota's Twin Cities campus default rate is less than 2.5 percent.

Private nonprofit four-year schools also fare much better than their for-profit counterparts in the state, with a median default rate around 2.5 percent. The exception is Dunwoody College of Technology, where more than 14 percent of students had defaulted on loans after three years.

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Minnesota Rep.John Kline: looking out for stockholders, not students.
While the for-profit schools are the only ones turning public money into private profit, they're not the only ones with high default rates. Two-year community colleges also fare poorly in this metric. At Rainy River Community College in International Falls, the three-year default rate is nearly 30 percent. At Minneapolis Community and Technical College and at St. Paul Community College, more than 16 percent of students default after three years.

The federal government has been trying to address this problem for a while, tightening regulations on just how badly a school can screw its students before it becomes ineligible for federal loans and grants. But for-profit schools have launched a major counter-offensive, and have so far managed to fight off most of these efforts.

One of their biggest allies is the new chair of the House education committee, Minnesota's own John Kline. Kline, who has taken some big money from the industry, has pledged to squash reform efforts.

Want to know more about how your school stacks up on default rates? You can check out the full spreadsheet here.


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6 comments
Kirk the Conservative Jerk
Kirk the Conservative Jerk

Don't you like how dipshit (Nick Pinto) uses John Kline as a example. Hey Nick, What teachers union/association do you know of, that will endorse a republican during any election? Doesn't support go both ways?

Kirk the Conservative Jerk
Kirk the Conservative Jerk

It's always funny how elected leaders never complain about the ridiculous cost of obtaining an education. K-12 and Post-secondary alike. The rising cost have put the "out of control rising cost of healthcare" to shame! But hey, government almost already has a full monopoly on education, and the teachers unions are a wholly owned subsidiary of the democrat party. Of course, the did, for some mysterious reason, take full control of the student loan industry by slippiyng it into the healthcare bill in 2009. It's also funny how a outstate school can achieve a 98% graduation rate with an average student performance rating of 85% and higher with half the funding. $16,000 per student per year in Minneapolis and $6,000 per student per year in Roseau with Roseau coming up with twice the performance! Ask yourself this; whom (which political party) do the teachers/schools run to when they need money? What political stance do your professors take?It's that easy folks.

China
China

The author, Nick Pinto, writes this after attending Harvard and Columbia University. Currently, without scholarships the total tuition for those degrees would total at least $240,000. Without scholarships, grants or very weathy parents (which one is it?) one could not repay anything close to that level of debt with a staff writing job at Citypages. Does that mean that Harvard and Columbia "screwed you"? These articles on this issue have been shallow and lack any attempt at addressing what needs these colleges fill, what could be done to improve debt repayment or the role that student loan agencys play in the default rates. Please try harder. You have the educational tools.

Francesco
Francesco

Harvard & Columbia? Really? And he still makes bloopers like:

"It's nearly that National American University, which has campuses in the Twin Cities and in several other states."

Bianca
Bianca

Does it really matter how he was able to repay that debt? Obviously what needs to be addressed is the fact that these schools are giving loans out left and right, and not providing students with the tools they need to not default on these loans once they're done with their post-secondary career.I'm a student at St. Thomas, and even with scholarships and grants I know I'll be in debt for a long time, but they provide us with the resources we need to find a career that will help us to afford our loans. So obviously these schools are lacking in that realm, and it needed to be addressed, especially to any soon-to-be high school grad who might have second guesses about going to these for-profit schools.

kermit
kermit

Way to advance the debate!and china--for-profit lackey w/a google reader alert????

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