Almost one of every 12 recent California college graduates with student loans defaulted within two years of starting repayment -- if they ever started making payments at all, according to new data from the U.S. Department of Education.
About 21,500 former California students scheduled to started loan repayment between Oct. 1, 2008 and Sept. 30, 2009 defaulted by Sept. 30, 2010. Default rates were highest among "for-profit" colleges. Community colleges also had high default rates, but relatively few of their students took out loans, given low costs.
Education, politics, and anything else that catches my attention.
Thursday, September 15, 2011
California Colleges and Student Loan Defaults
This article won't stay in front of the "pay wall" for very long but the chart shows that the schools with the highest default rates are, for the most part, Associate's Degree-granting schools (junior colleges and trade schools):
Part of the problem is that when college recruiters come to high schools and talk to students, they tell them not to worry about the cost because scholarships, financial aid and grants will cover it. Then, when they don't cover it, families end up with the choice of having the student withdraw from school or going into massive long term debt which cannot be discharged by bankruptcy for at least ten years. I've seen this happen. A good friend of mine sent his son to UT Austin for an engineering degree. They were of the mindset that they didn't want him to work so they took out loans and he took out loans. Upon graduation, the openings for engineers of almost any kind were rare. So he just finished law school. Right now this 25 year old kid owes the equivelent to a house payment every month for his student loan. And he's a base level lawyer making maybe $30K a year before taxes. Multiply his plight by tens of thousands and frankly it's a pretty bleak picture. Either these kids will default out of sheer necessity or walk away because let's face it, that's what this administration has done with so many who ran up credit cards. Saps like me who paid our bills are stuck with the heavy lifting while they go on to do more damage.
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