Tuesday, October 2, 2012

University of Phoenix 3-year Default Rate: 26.4%

The U.S. Department of Education has started publishing student loan default rates, and the University of Phoenix is, as usual, at the back of the pack. 26.4% of University of Phoenix students default on their student loans within 3 years.

Americans, that's a lot of your tax money down the drain (and lining the pockets of the giant corporations that run these schools). You can go here to browse the figures on some of the other proprietary schools (e.g. Ashford, Kaplan), many of which aren't doing a whole lot better. Should you wish to search conventional public and private universities, go here.

Naturally, the for-profit schools aren't going to take this default rate problem lying down! As Salon's Andrew Leonard explains in a great article, the colleges are now providing counseling to students to help them avoid default:
Lauren Asher, president of the higher education research and advocacy think tank the Institute for College Access and Success, questioned whether Corinthian’s sharp drop in default rates actually served the interests of students. She pointed to a May 3 conference call Corinthian held with investors, in which company executives acknowledged that much of the improvement resulted from “deferment and forbearance. “In other words, Corinthian students were being counseled on how to delay paying back their student loans, in order to avoid defaulting during the three-year window tracked by state and federal governments." 
Of course, this regime of counseling isn't simply out of the goodness of the proprietary schools' hearts--the threat of federal and state sanctions is motivating them to bring default rates down. Interestingly, as Leonard points out, this counseling may actually be harmful for some students who would default anyway, since delaying default simply adds to the balance of the loan.

Social Issues has lots more coverage on University of Phoenix and its brethren--here, here, and here.

1 comment:

EDMC Professors and Students Speak: How Lobbyists and Goldman Sachs Ruined For-Profit Education said...

Basicly what it boils down to people is that most of these negative comments are coming from people who recieved their degrees the traditional way, which is fine and great, more power to you. I think there is just a little respentment now that you can get your degree from the comfort of your own home without the parking fees. Times have changed, and so what if you can now better yourselves and your career without having to go on a campus. It must be something of value as a ton of major universities also have the online process, or are they crap as well. Penn State, Rutgers, USC and many more now have online degree opportunities and I would hardly call these schools uncredible. The degree mill quote is silly. Ok so they have given out alot of degrees. Yes becasue they cater to people who cannot afford to go to a 3-5 day a week campus. It was basicley started for people who already have jobs and cant afford the time to go to school. Quit knocking people trying to better themselves. UOP has people teaching who are already in the related fields. They are not just teachers as most traditional schools have. If I want to learn something from somebody ,I would rather have them be employeed in a place where I eventually want to be. Again, people are just mad becasue they have now made it easier to go to school. Im sorry this format wasnt there for you when you went to school, but thats like being mad at somebody for using a cell phone. The whole world is basicly online and its not slowing down. Get used to it. We can not all go to Harvard. If somebody has a degree from the University of Washington is it a piece of crap becasue its not a Harvard degree. Think about it.

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