Default rate rises on student loans as economy falters

Given the bleak job prospects for college students, many of whom are back living at home with their parents, this news from the U.S. DOE should not surprise any of us:

The U.S. Department of Education today released the official FY 2009 national student loan cohort default rate, which has risen to 8.8 percent, up from 7.0 percent in FY 2008. The cohort default rates increased for all sectors: from 6.0 percent to 7.2 percent for public institutions, from 4.0 percent to 4.6 percent for private institutions, and from 11.6 percent to 15 percent at for-profit schools.

The rates announced today represent a snapshot in time, with the FY 2009 cohort consisting of borrowers whose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. More than 3.6 million borrowers from 5,900 schools entered repayment during this window of time, and more than 320,000 defaulted. Those borrowers who defaulted after the two-year period are not counted as defaulters in this data set.

“These hard economic times have made it even more difficult for student borrowers to repay their loans, and that’s why implementing education reforms and protecting the maximum Pell grant is more important than ever,” said U.S. Secretary of Education Arne Duncan. “We need to ensure that all students are able to access and enroll in quality programs that prepare them for well-paying jobs so they can enter the workforce and compete in our global marketplace.”

Schools with excessive default rates may lose eligibility in one or more federal student aid programs. This year, five schools are subject to sanctions for cohort rates that either exceeded 25 percent for three consecutive years, exceeded 40 percent in the latest year, or both. Four are proprietary schools: Tidewater Technical, Norfolk, Va.; Trend Barber College, Houston, Texas; Missouri School of Barbering & Hairstyling, St. Louis, Mo.; and Sebring Career School, Houston, Texas.  The fifth school is a private school: Human Resource Development & EmploymentStanley Technical Institute, Clarksburg, W.Va.

Since the time when the borrowers in the FY 2009 cohort enrolled, the Obama Administration has expanded flexible loan repayment options for borrowers through the income-based repayment plan (IBR).  This plan makes loan payments more affordable by capping the monthly payment at an amount based on income and family size.  The Department is stepping up its outreach efforts to make sure borrowers are aware of the benefits of IBR.

In addition, the Department has taken several proactive steps to protect students and taxpayers from programs that leave borrowers with large amounts of debt and poor employment prospects. Through a series of regulations finalized over the past year, the Department has tightened loopholes to protect students from misleading or overly aggressive recruiting practices; taken action to ensure that institutions are offering high-quality programs; and established rules that require career college programs to better prepare students for gainful employment or risk losing access to federal student aid.

This summer, the Department released several College Affordability and Transparency Lists to provide students and families with easy-to-understand data about college costs to help them make informed decisions about their choice for higher education. The lists highlight schools with the lowest and highest tuition and fees, their average net price and those institutions whose prices are rising at a particularly fast rate, and they allow students to compare costs at similar types of institutions. In the coming months, the Department will be disclosing additional data, such as the gainful employment measures, as part of President Obama’s ongoing commitment to boost college affordability and accessibility and make government programs more open, transparent and accountable to the American people.

Finally, in recent months several institutions – notably for-profit schools – have taken action to ensure that current and future students are well served. Several institutions have closed underperforming programs, upgraded their curriculum, begun offering free trial periods so students can try out a program before enrolling, raised admission standards, and boosted repayment rates through better loan counseling.

–From Maureen Downey, for the AJC Get Schooled blog

76 comments Add your comment


September 12th, 2011
11:00 am

At Georgia Perimeter College, it was common knowledge that many students in the Learning Support program were there “just for the check,” a phrase I heard from a number of students to explain their classmates’ sudden disappearance from class meetings. Students enroll, secure financial aid, and attend classes until the financial aid check arrives. They then stop attending and spend the check as they please. Some who receive financial aid, which is to be spent on tuition, fees, and books, never bother to buy books. This abuse is apparently allowed to continue because it inflates the school’s enrollment numbers, which looks great to the Regents. If proprietary schools can raise their admission standards and work to end financial aid abuse, why can’t a state school like GPC do the same? Learning Support remains a huge cash cow for GPC and many other state institutions, with some students taking the same Learning Support class as many as four times. At some point, it has to be obvious that some people would be better off in technical schools or training programs to provide them with the skills to earn a good living. Taxpayers would certainly be better off if schools like GPC stopped admitting students who score so low on entrance exams that they cannot be admitted to regular college classes. Students are duped and taxpayers are cheated. That’s higher education?

Dr NO aka Mr Sunshine

September 12th, 2011
11:19 am

“These hard economic times have made it even more difficult for student borrowers to repay their loans, and that’s why implementing education reforms and protecting the maximum Pell grant is more important than ever,” said U.S. Secretary of Education Arne Duncan”

Absolutely!! We need more give-aways, throwaways and freebies for these persons who have shown little or no responsility. Enjoy Arne as your days are numbered.


September 12th, 2011
11:21 am

Happens even at UGA, disgusted, and even with non-learning support classes. There is supposed to be a claw-back of the funds, and a block on the student eligiblilty until the unwarranted funds are repaid.


September 12th, 2011
11:29 am

in 2005 the republican party took away bankrupcty protection for Private student loans to keep their banker masters happy and the middle class poor and try to squeeze them out of existance. Students across American need your help. We are 1085 shy of 10,000 signatures. We need your support folks

September 12th, 2011
11:58 am

It is extraordinarily difficult to default on a student loan. They take it out of your check and all of your taxes, if you get anything back. I guess if you are not working, there is nothing to take, but doesn’t it come out of unemployment also?


September 12th, 2011
12:00 pm

“…today released the official FY 2009 national student loan cohort default rate, which has risen to 8.8 percent,…”

It’s evolving into a student “gift” program.

Our society views debtors as hapless victims and creditors as exploiters. People who make a conscientious effort to pay their bills are chumps, and shills like Clark Howard make a nice living coaching people how to game the system.


September 12th, 2011
12:02 pm

The real culprit here is the skyrocketing cost of tuition in this country. Yes, there is a clear problem with default rates, but what about the enormous costs of attendance that drives the need for student loans. There are a myriad of issues that are contributing factors, but the tuition costs seem to be the number one factor.

[...] costs, low graduation rates and poor job prospects are getting more and more students over …Default rate rises on student loans as economy faltersAtlanta Journal Constitution (blog)all 89 news [...]

Good Mother

September 12th, 2011
12:52 pm

I had some student loans to repay after college and I was called to duty as a reservist in the first Gulf War.

Even though my income was drastically reduced, I still had to repay my student loans and I did. I didn’t have enough money for a phone or a car so I rode my bicycle to base everyday until the war was over.

Other posters are correct. Bankruptcy will not erase student loans and wages and tax returns can be garnished.

I’m thankful I didn’t have much to repay but I that’s not true for others.

One of the biggest problems is for proft universities that advertise to people who could not get into a traditional university. they openly tell them they will not have to pay back the loans. It was on an investigative report on TV and caught on film.

I do have sympathy for those people like me who had loans and it was very difficult to repay them. I lived on tuna, water and four for a dollar mac and cheese until the war was over and I returned to my usual income.

Teacher Reader

September 12th, 2011
1:05 pm

The problem is that people are taking out loans for money that they don’t really need and isn’t being used for education purposes. Student loans should only be available for the cost of tuition, not the extra fees or housing or food, just the education. I know too many people who are taking out more student loans than they’ll ever be able to pay back. The online universities are especially guilty of this. I know a 55 year old woman who is already $50,000 in debt and hasn’t finished her English degree yet. She is here on a green card, getting ready to go back to Europe and the university is telling her how she can continue receiving student loans for much more than her courses cost. If a student (at any age) is willing to sign the loan agreement and use the money for purposes other than college, then they should pay up.

Good Mother, many have had to do what you did to make ends meet at one time or another. The problem is that many of our kids graduating college want to have what their parents have and more without realizing that their parents had to work for what they have.

Student loan reform needs to take place, not in the way that they need to be paid back, but in the way money is distributed. Let’s face it, not everyone is college material, and student loan money comes from tax payer dollars, it’s not free money. If a person isn’t ready for regular college coursework, why are they getting money to take remedial courses? Also, a limit on the amount of student loans one can take out would also be a way to limit kids from getting into debt over their heads.

November 6, 2012

September 12th, 2011
1:40 pm

Folks, why not just give ‘em the damn money and cut ‘em off instead of playing games to try to pacify the American Public. I mean c’mon, we’re probably spending more money yearly trying to collect the debts than the total of all the defaults. This is another one of those many (I guess I mean most) government programs that has run amok and it’s time for this program to end in it’s present form. November 6, 2012 can’t come soon enough.


September 12th, 2011
2:02 pm

So many even traditional college degrees (from *real* colleges and universities as opposed to those clip joints that advertise on TV all day long) aren’t worth spit now. Graduates are left with huge debt and little or no job–hopefully most have family to fall back on. My advise is that a kid should plan on college ONLY if he or she has very specific goals and is driven to complete them, e.g. getting the degree/s; and only then if it’s in a field with very good job prospects, like pharmacy for example.

To Teacher Reader from Good Mother

September 12th, 2011
2:11 pm

RE: “Student loans should only be available for the cost of tuition, not the extra fees or housing or food, just the education.”

I disagree. My housing costs were greater than my tuition. If it wasn’t for a student loan to cover my housing expenses, I could not have gone to college.

I worked full time as well as having a full scholarship for tuition and books and I still needed money although I lived very frugally.

To deny housing costs is to deny an education. I didn’t have the option to live at home and go to college. I came from a small town with no college and had no car to travel to one.

My choice and only option was to live in student housing, walk to the mall and restaurant where I worked and go to school.

Many rural communities are like this and housing off campus is pricey too.

The economy has drastically affected the ability for many to get jobs. I know, I get a hundred applications from college graduates every month. I only hire one.


September 12th, 2011
2:16 pm

College tuition is a joke! Every other information related industry has been transformed by technology. Quality is up and costs are down but NOT IN EDUCATION! Why? Simple for the truly educated. To the extent Education is subsidized by the government, the suppliers (the schools) will not have incentive to improve and I am not talking incremental but quantum steps forward. Also, if you have to work to pay for your education you will demand quality. If BIG GOVERNMENT pays we only care about EQUAL.


September 12th, 2011
2:17 pm

When my kids started college, I could not believe how eager colleges were to “get them approved” and how easy it was for them to get 20-30k in credit. Because of this there is no incentive for colleges to control or contain costs or for them to offer degrees that will actually pay them a living salary. Higher education is the new scam when you look @ the fact that for the past 20 years or so, college costs have been increasing faster than healthcare costs. Unfortunately, our youth are the victims. I know everybody always touts the stats that “college educated kids earn over a millon dollars more in their lifetime than those without a degree”. Tell that to the current grads who cant find a job paying anything.

[...] trade schools and colleges. For students in the for-profit sector, the default rate …Default rate rises on student loans as economy faltersAtlanta Journal Constitution (blog)Student loan default rates jumpSacramento BeeArizona near top in [...]

Good Mother is Not

September 12th, 2011
2:21 pm

I call BS on GM.


September 12th, 2011
2:23 pm

I personally believe my idea would have been a better one than what Obama spent the stimulus money on… I think the government should have paid off all the student loans from college graduates. College graduates are the ones coming out, getting jobs, and want to buy houses, cars, and all other kinds of stuff they couldn’t afford on a minimum salary. But with loans racking up, jobs few and far between and not paying as much, the default rate is jumping. Why not reward the people in this country that do right, and actually give back to society? Why is it always the people that don’t do anything that get the benefits? That’s why this country is backwards, because you are rewarded for sitting on the couch and not doing anything, but if you go out and get a degree, your credit gets blown out of the water because you default on loans to better yourself. The government should pay for the education and actually help those out there that are helping theirselves. Saving the extra $400 a month I spend on loans, and the $650 my household spends on them together would buy us a bigger house, another car, or allow us to go out and enjoy life a little more while putting money into the pockets of the local economy. It sounds pretty simple to me, but maybe I’m wrong.


September 12th, 2011
2:25 pm

Don’t forget that higher education is not a right, it’s a privaledge. So before you all begin acting like oh poor little billy can’t pay his tuition even with his student loans, don’t forget that he doesn’t have to go to college. Yes it’s better to, but what the point if you go 50k in debt and it takes you 30 years to pay it back…. it’s a privaledge, not a right!


September 12th, 2011
2:29 pm

I work in student financial aid and a lot of people are “at fault” here. Students along with their parents should make better colleges regarding the schools they CHOOSE to attend. I’ve seen a number of students relay that they will attend their dream school at all costs, such as a $35,00 to $50,000 private loan for one year, while their parent soaks up and delivers the praise regarding the “top school” their son/daughter is attending. It is ludicrous. Next, colleges and universities should do a better job of educating prospective students on their options in a realistic manner. Yes, the Net Price Calculator is decent but faaaaaaar from enough. Most schools, including the “non-profits”, are merely into having warm bodies enrolled to meet their numbers. How a student does during their matriculation or even after is outside of their scope because there is always a new group of students coming in. In addition, the federal government is contributing to the rising tuition phenomena by making student aid readily available WITH NO REAL REQUIREMENT (aside from being enrolled) to receive it. This phenomena does not happen in the private sector. A number of college and universities are enrolling students to rake in the free and GUARANTEED money. Any academic program, specifically graduate programs, where the school does not offer financial assistance but only uses federal funds (read: loans) was set up for the aforementioned purpose; to rake in federal money. If governments got out of the business of providing money with no requirements, tuition would drop because the money well would dry up quickly.

Regardless of the above, people should make better choices and parents should encourage their children to understand the ramifications of their decision making. Otherwise, students will mortgage their life away before they are 22.


September 12th, 2011
2:33 pm

Joe-Privilege is spelled like so “privilege”. As a single mother I have $70k for undergrad and grad student loans combined. I am lowering my cost of living and will not make any major purchases as well as cut back on ther expenses in order to pay my student loans off in a timely manner. (2 yrs max). Everyone cannot do that or do not want ot do that! However, I will say, I would like to reap the benefits of maintaining my stellar credit rating and ability to purchase what I would like; whenever I like. So while I do feel some type of reform is needed, I am unsure of exactly where to start. Hopefully we can all soon see the light at the end of the tunnel.


September 12th, 2011
2:33 pm


Put your thinking cap on here for a second. You are right in the fact that it is a privilege, but when most companies won’t hire you unless you have a college degree, it makes it a necessity to get one if you actually plan on having a future for yourself. Try getting a loan to start your own business these days without a college degree and a heck of a business plan to back it up. We are almost forced to get a higher education, because so many jobs these days require a knowledge kids aren’t learning in elementary, middle, or high school. The intelligence of this country is decreasing, while the population continues to increase. College education is needed, and we actually need more people to invest in a college education so the intelligence of our society rises, instead of relegating yourself to selling drugs, or doing illegal activities to make a living.


September 12th, 2011
2:37 pm

I saw an investigative report recently that identified a scam with “for profit” colleges. It mentioned several encourage homeless people to take out school loans knowing that the money will never be paid back. It seems the rationale was it was up to the government to get the money and it was not the issue of the school. I recall them mentioning a for profit college in NJ had over 5% of their rolls filled with homeless people.

Everyone is trying to make a buck off the government. Is this the American way?

Sick of It

September 12th, 2011
2:44 pm

I’m an adult student at Shorter University. I just completed my associate’s degree which cost me $26,000 in student loans. My next program will cost an additional $17,000 in more loans. I work full-time and I’m trying to find a part-time job so I can pack money away for my loan repayment. I’m also working on finding any scholarships and grants I may be eligible for. I am truly concerned about the amount of debt I’m taking out to land a good job and to avoid debt later in life…..sounds crazy huh. When I began classes, I was astonished at the type of adults that were in my class. They definately seemed to be there for the “check”. They missed half of their classes, never bought their own books and half-assed their homework. The school really seems to look the other way on this. They push and push people to enroll in their classes only to have 1/4 of students drop out as soon as classes begin. I also agree that colleges need to properly screen people somehow, someway to help weed out these people. At Shorter, we are required to meet with a study group and our work affects each other’s grade. I AM SICK of these worthless, financial aid, check hunters not doing their homework properly, or at all, and affecting my grade!! Shorter..FIX THIS if you want any more of my financial aid or just a seat filler……sayin.


September 12th, 2011
2:45 pm

I got my portion of my daughter’s tuition bill at GC&SU – it was $1500. Of that, $1100 was FEES the college added! I was appalled at that amount and when I contacted the school to inquire – they’re response was to either pay it or get student loans! So, I gather that many students are having to finance these outrageous fees!


September 12th, 2011
2:51 pm

I’m beginning to think that this country’s overwhelming and misplaced encouragement that everyone should get higher education is not much different from the overwhelming and misplaced encouragement that everyone should own a home. The result is the same. A government aided and abetted bubble market. However, its a heck of a lot easier to walk away from a house. Financial aid offices allows students, who only months ago were minors, to sign their lives away with enormous student loans. Its not a whole lot different to how banks and mortgage companies gave out so called “liar loans” in the early 2000s.

Colleges and universities have no incentive to contain costs. Its disgusting how Georgia public colleges and universities have balanced the books on the backs of students without any serious attempts at belt tightening first. They do it because they can.


September 12th, 2011
2:53 pm

Maureen (and others)

This youtube video was well thought out in many respects. View it when you all have a moment:


September 12th, 2011
2:55 pm

I thank God that I paid off my student loan last year! :)

Sick of It

September 12th, 2011
2:56 pm

To Chip….LOVE your analogy regarding the country’s encouragement to gain higher education and own a home! I believe you’ve made a winning prediction my friend!


September 12th, 2011
2:59 pm

I agree with contractor. I would love for most if not all of my loans to be paid off by the government, especially since I been in the workforce since age 18. I pay the required taxes yet I still have to pay off a large student loan. Some help would be appreciated.

Also, do not blame the president for the state of the educational system in this country. It was amok before he took office.


September 12th, 2011
3:02 pm

It is pretty hard to default on a student loan. All you have to do if your job situation changes is call and tell your lender, answer a few questions about your new (lower) income, how many people in your household, etc, and they give you a hardship deferment for 6 months. I did 3 of these consecutively until I got back on my feet and could start paying again. If they won’t grant you one, it’s because you make enough to pay it back, and you are just unwilling to make the sacrifices in your standard of living to uphold your obligations.

That being said, I agree with some others that more needs to be done to educate students and parents on other options. My student loans would be half what they are had I made better decisions, like taking all the basic English, history, etc at a cheap local school (that I could afford without loans) before heading off to an expensive university.


September 12th, 2011
3:06 pm

To me the root of the problem is people taking more loans than they can handle then complaining to everyone else about their debt. I’m sick of it. I worked full-time and put myself through college. My parents contribution was letting me live at home for free. I had loans but every semester I paid only my tuition, fees etc. and send the rest back. I’ve been out of college for 5 years and have already paid my loans off making less than 45k a year. It can be done. Its time for kids to start taking responsibility for their own actions(and spending).

Sick of It

September 12th, 2011
3:09 pm

Man, I wish I made 45K and had no morgage. You bet my loans would be paid off too! Oh wait..Did I say 45K…..I wouldn’t have taken a student loan because I HAD NO FREAKIN MORTGAGE!


September 12th, 2011
3:16 pm

maintaining some abstract credit rating so you can purchase what you want when you want with money you dont have? YOU ARE THE PROBLEM!


September 12th, 2011
3:16 pm

Kids are told to go to College to get an education. They do so. Not just in Black People Studies and 16th Century Portuguese Poetry, but real academic subjects that had previously had a good job market.

They graduated, and lo and behold, no jobs.

And for the really slow who’ve already posted here, that means that even though student loans have decent interest rates, when you’re $50k + in debt and not able to work, those loans are near impossible to pay off, whether you work at McDonalds for minimum wage, or get your foot in the door somewhere for slightly more than minimum wage.

At least people who have a mortgage have some type of collateral on which their debt is based. For college graduates, all they have is their knowledge and an utterly worthless piece of paper they can’t sell.

Ask a college graduate who did everything they were supposed to if they could revoke their own diploma and any types of professional certifications or licenses to be rid of their debt, and I’m sure they would apply in the affirmative.

Students who can’t find jobs are victims the same way homeowners who paid their mortgages and continue to pay their mortgages but are underwater are victims. Of course, the great thing is that people with underwater mortgages can walk away from their toxic debt and declare bankruptcy.

The future generation the top 1% has trained their puppets to lament about national debt meanwhile cannot declare bankruptcy on their student loans.

Hilarious, no? The future of this country, the college educated and responsible young people who did what they were told by going to college, are the ones who aren’t able to start their lives, raise families, and take part in the economy. Together, underwater mortgage holders and students in debt are the reason there is no demand in this economy.

But the answer is to raise taxes on the bottom 50% of the country who own 2.5% of the wealth, while cutting the taxes on the top 10% of the country who own almost 70% of the country’s wealth.



September 12th, 2011
3:30 pm

1) We need to stop lending $$ for careers that are not in demand
2) Stop lending $$ to pay for it all, especially at private schools
3) Possible force people who cannot pay their loans to go into the military or other community service EG: peace core.

Mike in CLT

September 12th, 2011
3:30 pm

How’s that hope and change working for you now you poor little college grads? Political jabs aside, I had this debate with a fellow co-worker and I said that that there is no way a degree for UGA, ALA, AUB or even TECH for that matter is worth the going rate. These schools have always played that money grab game but took it to a new level when HOPE (lottery money) infused more capital pushing the price of college well beyond what the market could bear without those incentive. Once this happened, it made private schools look like a good deal in comparison. The world was a simpler place without HOPE (ie lottery money). UGA, for instance, was a school that you could get into with a B average and end up with about $15-20K in TOTAL college expenses for 4 years. Now, a B average doesn’t even get you in the stack of applications because of the all those “A” students with the HOPEless scholarship ! I got news for you fools, the educational quality HAS NOT CHANGED commensurate with the increase in cost. I’ve been up to my alma matter several times for football games over the years. I have go to say that, by and large, the students that go there now are more socially disconnected and more dependent on outside care then ever before. They have no sense of community and common sense escapes them unless its on a screen. Isn’t that what college is really for anyway?


September 12th, 2011
3:35 pm

Hey Sean, people would LOVE to get a position in the Peace Corps or Public Service to pay off their debts.

Unfortunately, there are multitudes more graduates than their are positions. And the military doesn’t regularly take 25+ year olds. They want ‘em young and out of high school.

And you’ve got to be slow. Just because some profession is in “demand” this year has absolutely ZERO relevance to whether it is in demand next year, nevermind 4 years from now. Take a look at the medical field. Nurses used to be able to walk out of school with a RN and get a job. Now, even the nursing field is full.

Here’s a hint: if you’re basing your opinion on downright loathing of people who aren’t you, please don’t lecture about what they should or shouldn’t do. Telling someone to pick a career that is in demand when they did when they started school and graduated with the requisite degree makes you look like fool.

Tychus Findlay

September 12th, 2011
3:35 pm

Not quite sure why this is news. Unless you’re graduating with a degree in a hard science e.g. _____ Engineering, you really don’t have any job skills/qualifications. Most job skills are learned on the job, not from having a diploma.

Head Scratcher

September 12th, 2011
3:38 pm

I’ve read several posters begin opining by saying: “The problem is . . . ” or “The root of the problem is . . . “. But the reality is that this is just one sector in the massive economic quagmire that is the world economy. Finance is, always has been, and always will be a speculative business. (Not a science!) Lenders speculate that they can lend money and be paid back said money along with interest (or profit). With student loans, there isn’t necessarily the presence of the ability to repay the loans.

The default rate referenced for this blog is 8.8 percent. That is a smaller percentage rate than the declared national unemployment rate.

I’m simply posting this to show that this is FAR from an epidemic. 91.2 percent of borrowers are not in default. Lenders are getting a return on their investment from 91.2 percent of the entities that they invested in. When you risk money sometimes you lose money.

School shouldn’t be so expensive that costs exclude some who wish to attend. Everyone doesn’t wish to attend. Everyone can’t attend.

But maybe faculty shouldn’t be paid six figures. Maybe coaches shouldn’t be paid seven figures. Maybe schools shouldn’t be in bed with book publishers who increase book costs every year.


September 12th, 2011
3:40 pm

Mike in CLT,

Irrelevant useless political “jabs” aside, what is your point?

That student’s have been scammed by society into believing that they must go to college to have middle-class life, and after they accepted the premise and went to school as schools obscenely raised tuition year after year after year, that now they’re totally to blame for having degrees, certifications and licenses that they cannot use because the job market has shrunk?

Great. So students have been scammed by society. What do you want them to do now? Because they’d love advice beyond the tired things that have been repeated here and everywhere else about picking a better major. If they were scammed as you imply, should they have any recourse?

[...] 15 pctReutersU.S. College Loan Defaults Increase to Highest Level Since 1997San Francisco ChronicleDefault rate rises on student loans as economy faltersAtlanta Journal Constitution (blog)Sacramento Beeall 201 news [...]


September 12th, 2011
3:47 pm

Head Scratcher,

You might want to go back and read that article again, and apply some good, solid analytical reasoning to any argument you make from it.

Here, I’ll give you some hints.

1. The 8.8% figure is from graduates between Oct. 2008 and Sept. 2009, meaning almost 10% of students defaulted within ONE YEAR of graduating.

2. The 8.8% figure does NOT count student who defaulted two years after graduation.

3. Students are still going to school and still graduating…into this terrible job market.

4. Often, the first 6 months after graduation you do not have to make any payments. None.

So, take that information and look at my point number 1…10% of students default within 6 MONTHS of graduation. Now take a look at point 2 again. What are the numbers of students/graduates who default within 2 years? And use some critical thinking. If the job market stays the same, or gets worse, do you think the number of students/graduates who default is going to go up or down in the future?


September 12th, 2011
3:50 pm

I dont know a R.N. who is out of work….by choice. I know a shopping full of IT folks who are bagging groceries at Publix. Go figure.


September 12th, 2011
3:51 pm

typo…shopping bag full of IT folks……

College Inc

September 12th, 2011
3:51 pm

It would be a mistake to paint all universities with the same broad brush.

Last year, PBS re-released an outstanding video on the growth of “for profit” universities. The video – entitled “College, Inc.” – is available online at this link:

This report details the “challenge” with school funding as the proliferation of the “for profit” universities and their exploitation of a relatively unregulated market. In the 2007 academic year, 7% of all American students attended a “for profit” university (such as Phoenix or Argosy). According to the College Board, in 2007-08, the average cost of attending a public, 4 year university (including tuition, fees, room and board) was $17,497.50. A “for profit” was $22,950. A “private, non-profit” was $33,935. Bear in mind that the vast majority of the “for profits” are online and students do not pay for room and board). 88% of students at “for profits” received federal Stafford loans (42% public). In 2008-09 alone, the University of Phoenix received $656.9m in federal Pell Grants (awarded to financially “needy” students) In AY2007, “for profit” students accounted for 7% of total U.S. enrollment in AY2007 – but they also accounted for 44% of all federal loan defaults (

Comparing this to an in-state, four-year university in Georgia, in 2009, Kennesaw State was recognized as one of the twenty “lowest debt” colleges in the United States. That year, the “average” graduate of Kennesaw State left with with student loan debt of $2,845 (Project on Student Loan Debt – ).

Without question, some students are very well served by these “for profit” universities. However, there are certainly practices among even the most highly regarded that raise questions. In December 2009, the “owners” of the University of Phoenix paid $78 million to settle a “false claim” lawsuit alleging that the university compensated aggressive recruiters in violation of federal student loan laws.

If you are concerned about the high cost of college and student loan debt, I strongly suggest you watch the “College, Inc.” video.


September 12th, 2011
3:52 pm


You must not know a lot of RN’s.


September 12th, 2011
3:58 pm

NOT ME!!!!!!! I pay mine off Thursday!!!


September 12th, 2011
4:01 pm

“Unless you’re graduating with a degree in a hard science e.g. _____ Engineering, you really don’t have any job skills/qualifications.”

Unless you have brown hair, you can’t write a screenplay. See? I can make ridiculous, unsubstantiated assertions, too!

Ken Stallings

September 12th, 2011
4:02 pm

This is the start of the comeuppance for the entire nation. We are experiencing epic failure in our education system and are real close to losing our influence on the world stage.

For too long now our education leaders have been immune to their real job requirements. Instead, they are turning into money managers. The colleges are now outrightly abusing the federal student assistance programs to generate revenues. They allow their professors to spend more time outside the classroom to pursue research money and/or grant money for studies. Professors now generally assign their undergraduate classes to graduate assistants and the quality of the course is driven down through the inexperience of the graduate students teaching the class.

Professors today make five times what they made when I attended NC State, and even then they were rightly paid well above average incomes compared to society at large. I graduated in1985, and we all know that incomes have most certainly not increased that rate across the board!

But apparently, going from around $60,000 a year in salary as a full professor in the 1980’s to an average of $300,000 today is not enough! Full professors also chase the research and studies money.

Between the erosion of care regarding who teaches the classes to the erosion of integrity in the admissions standards, higher education has cheapened its value at the same time it has escalated its costs dramatically. Higher education over the last three decades has been among the highest inflationary costs in society. Whether it exceeds the costs of health care or remained just below it is secondary. The reality is higher education has increasingly priced itself out of the market and endures merely on the backs of federal outlays for education grants and loan guarantees.

Worse, the horrible unemployment rate among college graduates is not merely a recent issue. It has only worsened in this recession. It has been a problem far longer, which tends to validate that despite rising costs, the value of the degree simply has eroded. Those who hire do not regard college graduates as being as valuable as they once were. The fault of that lies with those responsible for tailoring college education to remain relevant to modern requirements.

The sad truth is that today it has reached a point where economically most American youth are best advised to forego college entirely! Instead, they should seek focused education at a community college or trade school. The return on education investment is clearly better!

The concept that a liberal arts education is worth the monetary investment is no longer true. The shame is that a well rounded university or college education is perhaps more beneficial than in the past. But, to pay upwards of $80,000 for the four-year degree (or a lot higher) is beyond rational cost/benefit ratio.

The ultimate tragedy is that while higher education is increasingly valued in other nations, we have allowed an unholy alliance to warp the cost structure of our higher education schools. While it is true that higher education is not a right, it is even more true that only a society seeking suicide would encourage a system where talented young people cannot reach their full education potential. The malaise to society resulting from underachievement can ruin any nation, including our’s!

It is terrible that the very people we’ve entrusted to manage our higher education have too long ago forgotten that most essential of all truths! Perhaps more alarming are the number of citizens who seem to accept that today too many of our youth are being failed!