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Study Debt Worse With For-Profits

VU International News and Reviews No. 119 September 10 2018

July 2019

Not all opinion pieces in the New York Times are anonymous and about the White House. Ben Miller, senior director for post-secondary education at the Center for American Progress, wrote a NYT article on the fact that “The Student Debt is Worse than we Thought”. National Center for Education Statistics show that the typical student borrower will take out $6,600 in a single year, averaging $22,000 in debt at graduation.

American HE institutions are kept accountable by government for the student debts defaults of their students; this is normally assessed three years after the students leave the institution. But Miller shows that the 10% default rate of defaulting students after three years actually increases sharply in later years to almost 16% after 5 years. The proportion of HE institutions with high student default rates increases even more sharply from 2.1% after 3 years to 13.1% after 5 years.

The for-profit HE institutions do worst, also when looking at the 5 year period – climbing to a student debt default rate of almost 1 out of 4. Leaving American tax payers to pay the for-profit dividends.

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