Sure to add fuel to the fire is the news that the default rate for student loans continues to increase (see here Student Loan Default Rate Is Continuing To Increase). The most current data, representing borrowers whose first repayments came due between October 1, 2007 and September 30, 2008, showed that 238,000 of the 3.4 million borrowers defaulted on their loans before September 30, 2009 (the data does not include borrowers who defaulted after the cut-off date). Default rates for borrowers at private universities were found to be 4%, public universities at 6%, and for-profit schools at 11.6%.
“While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not,” Education Secretary Arne Duncan said in a statement Monday. “Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use.”