Is the Sequel to the Subprime Mortgage Crisis a Subprime Education Crisis? NPR Takes a Look [mortgagehelps.blogspot.com]
The Washington Post has a great piece out today looking at how the subprime credit bust is creating lasting damage to the credit scores of black Americansâ€"something that may hamper their ability to rebound from the crisis that erased a “generation of ... A Racial Legacy of the Subprime Crisis: Damaged Credit Scores
For-profit colleges and universities have recently taken a very public hit. The U.S. Department of Education released reports detailing higher education student loan repayment rates which specifically targeted loan repayment at for-profit education institutions. "The nonpayment rates for people who attended some for-profits are so high they could jeopardize access to future loans for students at those for-profits."
The U.S. Department of Education produced figures that show a 36% overall repayment rate for for-profit school graduates, significantly less than the 45% repayment rate that the U.S.D.E. reports as standard. Many of the for-profit colleges and universities have fought back, instead showing some repayment rates as high as 55%.
The question now becomes: what's with the disparities? NPR's article notes that, ultimately, the government has the final word on who is and isn't repaying loans.
The loan funding, after all, does come directly from government departments.What's important to understand, especially for students, is that for-profit schools of even the highest caliber, are for-profit. For-profits, especially online colleges and universities, don't have the resources of public and private universities and earn their revenue strictly through student enrollment.
Regardless of incongruent loan-repayment figures, students should take the time to educate themselves on financial aid options. Loan repayment can be difficult for all students, not just those who graduate from a for-profit school.
In an era where our loan repayment rates are being compared to the "subprime mortgage crisis," students should take care to invest wisely in whichever higher education track, online university or ground school, they choose.Â
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