Just over 11% of people who’ve borrowed money to pay for college are failing to pay back their loans, according to a new analysis of data from the U.S. Department of Education by the Student Loan Report. Those who attended private schools that don’t grant degrees, community colleges, and for-profit schools had the highest default rates on federal student loans. Students who attended public and private four-year schools were the least likely to default.
“For-profit schools and schools that are less than four years have higher default rates because students from these schools typically get lower paying jobs with less chance for advancement as compared to their bachelor degree recipient counterparts,” Drew Cloud, the founder of the Student Loan Report, told The Cheat Sheet. “Also, many students from these schools never graduate and are stuck with high debt, no degree, and a job that they could have gotten without attending college at all.”
Eleven of the top 15 schools with the highest default rates were non-degree-granting institutions, most of them barber or cosmetology schools. At some of these schools, the typical graduate earned less than $10,000 per year, according to data from the Department of Education. Overall, a third of people who completed for-profit certificate programs attended schools where the typical graduate earned less than minimum wage.
If default rates are high enough, schools run the risk of losing access to federal student loan money. But even if default rates aren’t so bad that the federal government turns off the tap, students should be wary of schools where many graduates can’t pay their debts. Before enrolling, potential students “need to consider what kind of jobs students attending their potential schools with their desired major usually get,” Cloud said. “This way, they might have a better idea of how successful they may be at repayment.”
You can review Student Loan Report’s data to find out a college’s default rate. Information on the actual number of students who defaulted is available from the Department of Education. However, keep in mind that a high default rate may not tell the whole story about a school. “Some schools have a small number of borrowers entering repayment. At other schools only a small portion of the student body takes out student loans. In such cases, the cohort default rate should be interpreted with caution as these rates may not be reflective of the entire school population,” noted the Department of Education.
These are the 15 worst colleges in the U.S. in terms of student loan default rates, with the worst default rate almost topping 50%.