Loan for college rise
The rising number of college loan default should spell trouble for federal efforts to make college more affordable. The nation’s student loan programs could be at serious risk if these trends continue unchecked. According to the latest government figure from 2008 to 2009, the overall student loan default rate jumped 27 percent. It is increasing from 7 percent of all loans to 8.9 percent. They are most alarming was 31 percent spike in defaults among those who attended for-profit colleges. Profit colleges are the default rate reached 15.2 percent of loans.
They account for half of student loan defaults for-profit schools enroll 13 percent of all university and college students. In the last year, they also accounted for a quarter of the $93 billion the federal government spent on Pell grants and student loans. The sluggish economy is one of the reasons for these rising rates. It exceeds the corresponding mortgage default number.
By pushing to expand enrollment, profit schools are contributing significantly to the problem. It was even it means higher rates of student loan default. Some small steps to get the situation under control have been taken by The U.S. Department of Education. Profit schools must show that at least 35 percent of their students are paying down their loan balances in 2015.