Texas Community College Feels The Heat.

A Texas Community College feels the heat. As the federal government steps in and takes away federal aid due to the students in loan default.  

The federal government is keeping an eye on for-profit institutions, which seem to have the highest rate of default in the nation. The U.S. Department of Education now tracks defaults among federal loan recipients for three years after they leave college.  Two-years has been the standard but Congress expanded the “cohort default rates” into the 2008 reauthorisation of the Higher Education Act, this law governs federal financial aid.

Since the 2008 they have found that the default rates under for-profit are higher. In the for-profit sector there was a 21.8 percent default on average, compared to 13.6 rate under the two-year metric.  The three-year study showed 13 percent at all public institutions, including four-year institutions and 8.3 percent at private, nonprofit institutions.  At two-year rates the public four-year was 9.6 percent and 5.2 percent at privates schools.  Just a warning if the default goes above 30 percent the institution will lose all federal aid, including the Pell Grant. 

I think that 30 percent default is to high and it should be more like 25 percent, I have worked for a for-profit school in the past and I am sad to see that the default rates are at a 21.8 percent.  For those of you interested in a for-profit school always ask to see the default rate, this will let you know if graduates or drop outs are able to pay back their loans.  This is very important to you because if a former student isn’t able to pay back their loans it is most likely they are not working or their position isn’t paying enough, this reflects badly upon the institution also.  An education is not just about the accomplishment but it about your future career and your earning potential.

Bearla International Studies

Elizabeth Koukladas Director