Minnesota's for-profit schools still cashing in on student debt
|Congratulations, debt slaves!|
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.
|Minnesota Rep.John Kline: looking out for stockholders, not students.|
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.