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Study: Half of for-profit students borrow $30k

More than half of students at for-profit colleges borrow $30,500 or more, which means students in that sector are more likely to exit their studies deeper in debt, according to a College Board study released this morning.

Fifty-three percent of students in for-profits had a cumulative debt load of $30,500 or more as of 2007-08, according to the study, titled Who Borrows Most? By contrast, only 24 percent of students in not-for-profit private institutions and 12 percent in public colleges had that level of debt.

High debt, of course, could mean repayment problems. The study deems anyone with more than $30,000 in debt to be at risk of eventual default.

"Borrowing for college is a wise investment for most students, but it is difficult for students to estimate in advance how much they will be able to comfortably repay after they graduate," the study states. "Too many students are among the minority who borrow amounts that are likely to cause them difficulties, particularly if their earnings are either below average or unusually uneven over time."

(Disclaimer: The Washington Post Company owns Kaplan, which operates a for-profit higher education provider called Kaplan University.)

The study also found the debt burden higher among several categories of students who would seem least able to repay the money. Independent students with dependents of their own (meaning students who have children and aren't being supported by their own parents) are more likely (25 percent) to have high debt than any category of dependent students, including those from households earning more than $100,000 a year.

About half of for-profit students of every income level -- independent or dependent -- have high debt, including 53 percent of students from households earning $30,000 or less a year. In other words, half of those students have college debt totaling more than their parents earn in a year.

Black students are far more likely than white students to have high college debt levels. Among black students who are self-supporting, 34 percent have high debt.

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By Daniel de Vise  |  April 26, 2010; 10:00 AM ET
Categories:  Access , Aid , Finance , For-profit colleges , Research  | Tags: College Board report, College Board study, Student loans study, for-profit debt, for-profit student debt, student debt study, student loans report, student loans study  
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Comments

Another problem with many for-profits is their low graduation rates. They're good at advertising to create demand, and they make it easy for students to get in and apply for loans. But completing a degree is tough, especially for some of the "high risk" groups you're talking about - people with dependents, people who are working, people from low income areas. If students don't graduate, they don't see any increase in their earning potential, making these loan amounts much, much worse than for college grads. Plus, the credits from these schools are less likely to transfer to other schools, so these students have high debt, make minimum wage, and are no closer to getting a degree and good paying job than before they attended.

Posted by: dawn-wise | April 26, 2010 1:55 PM | Report abuse

Another problem with many for-profits is their low graduation rates. They're good at advertising to create demand, and they make it easy for students to get in and apply for loans. But completing a degree is tough, especially for some of the "high risk" groups you're talking about - people with dependents, people who are working, people from low income areas. If students don't graduate, they don't see any increase in their earning potential, making these loan amounts much, much worse than for college grads. Plus, the credits from these schools are less likely to transfer to other schools, so these students have high debt, make minimum wage, and are no closer to getting a degree and good paying job than before they attended.

Posted by: dawn-wise | April 26, 2010 2:41 PM | Report abuse

Another problem with many for-profits is their low graduation rates. They're good at advertising to create demand, and they make it easy for students to get in and apply for loans. But completing a degree is tough, especially for some of the "high risk" groups you're talking about - people with dependents, people who are working, people from low income areas. If students don't graduate, they don't see any increase in their earning potential, making these loan amounts much, much worse than for college grads. Plus, the credits from these schools are less likely to transfer to other schools, so these students have high debt, make minimum wage, and are no closer to getting a degree and a good paying job than before they attended.

Posted by: dawn-wise | April 26, 2010 2:42 PM | Report abuse

Not only are large amounts of debt taken on by students at the for-profits, but many of them are led to believe that they can easily obtain jobs immediately upon completion. For-profits are good at luring students in, loading them up with debt, misleading them on careers and jobs and giving them sub-par education. This commentary regarding the high amounts of debt are just the tip of the iceberg.

Posted by: cricket35 | April 28, 2010 11:26 PM | Report abuse

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