Student Loan - Loans and Debt Consolidation

A FAIRER DEAL FOR COLLEGE STUDENTS WASHINGTON POST

But there is evidence that too many of these institutions are driven more by the profit motive than their commitment to educating students. We must guard against for-profit schools that load up students with tens of thousands of dollars of debt in exchange for largely worthless degrees.

In an investigation detailed in an Aug. 4 Senate committee hearing, the Government Accountability Office found that 14 of 15 for-profit colleges required higher tuition than nearby public schools did. For example, the program to earn an associate degree in business administration from Kaplan University Online costs $33,390; a program leading to the same degree at Northern Virginia Community College costs $8,500.

Higher tuition bills not only raise federal costs but also put students at increased financial risk. Most community college students can pursue their degrees without taking on federal loans. By comparison, nearly all students at for-profit colleges take out loans to earn similar degrees. According to statistics for the 2008-2009 school year, for-profit colleges account for almost 10 percent of students enrolled in higher education nationwide, but those students receive 23 percent of federal student loans and grants, yet accounted for a staggering 44 percent of defaults in recent years.

For many students, defaulting on student loans is not the end of their struggles. Student loan debts are not dischargeable in bankruptcy, and defaults disqualify th...[more]