According to the information presented by the US Department of Education, 25% of students attending for-profit schools have defaulted on the taken student loans. In fact, it turned out that the level of default on student loans is higher for students attending for-profit, private university. And only 11% of students attending public school have defaulted on their loans.
Public Schools Have Least Defaults On Student Loans
Actually, a number of students attending institutions of higher education face problems with their debts on student loans. Young people have to borrow huge amounts to get financed for education and, thus, a lot of them default on the loan repayment. According to Reuters, students of for-profit, private university face difficulties with unsecured loans repayment more frequently. The Department of Education examined the rates of default in 2008 and reported that 25% of students who had borrowed the funds to cover the tuition in for-profit institutions of higher education failed with the taken loan repayment. Besides, only 11% of students attending public universities defaulted on their student loans.
Measured Federal Funding
As for the federal funding, there is a new rule that was proposed in order to refuse any federal cash advance to any educational institution with the rate of loan default is higher than 30%. Actually, a number of private universities have already reached this level. The Association of Private Sector Colleges and Universities, a trade group of private universities, expressed the protest against the suggested rule and the DOE report stating that this numbers are determined by the current dismal economy. Moreover, APSCU added that the performed data of 2008 doesn’t apply to 2011.
Students’ Strain Is Growing
According to New York Times, more students face concerns about debt and post-education employment and they have a certain negative impact on their own mental health. Most of young people, living either in Arizona or Alabama, have no other way except of taking out large amounts of loans to finance the tuition and face the real necessity of debt consolidation for student loans after graduation and it’s not very pleasant, in fact.