For-Profit Colleges Fight Limits On Student Loans
DEBORAH AMOS, host:
Government officials are trying to get for-profit schools to take some responsibility for their students who default on their debts.
NPR's Claudio Sanchez has this report.
CLAUDIO SANCHEZ: The U.S. Education Department is targeting for-profit schools because the amount of federal aid for students at these schools has exploded in the last few years - it's about $27 billion. And even though only 7 percent of all college students attend for-profit schools, they represent almost half of the students who default on their loans. So heres what the Education Department is proposing: if in 10 years, a graduate from a for-profit school cannot repay what he borrowed with 8 percent of his starting salary, the school he attended would be banned from the Federal Student Loan Program.
Harris Miller, president of the Career Colleges Association, says that would slam the door on low-income students and working adults.
Mr. HARRIS MILLER (CEO/President of the Career College Association): The default rate on the loans of students who attend our schools is about the same as it is for students who attend community colleges and minority-serving institutions.
SANCHEZ: Miller says the average default rate at for-profit schools today is no more than 8 to 9 percent.
The Department of Education emailed NPR this statement. Quote: We dont want people saddled with debts they cannot pay, or degrees and credentials that are of little value, end of quote. The regulations will be available for public comment next week.
Claudio Sanchez, NPR News.
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