Analysis shows high student loan default rate at for-profit colleges

Harkin has delayed a Senate hearing on for-profit colleges first scheduled for Feb. 17. A Harkin spokesperson said Harkin’s office was working to “accommodate the schedule of a key witness” and a new date for the hearing would be announced soon.

Losing federal aid to back student loans would be devastating for many campuses, but especially so for for-profit institutions, which collected more than $23 billion in government aid during the 2008-09 school year – or 23 percent of all federal aid during that time, according to ED.

Fifty-seven percent of students who enrolled at for-profit colleges and universities from June 2008 to July 2009 left those schools without completing a degree program and saddled with student debt.

The federal analysis is the latest in a series of government reports that have put for-profit officials on the defensive.

In a report released last August, investigators from the Government Accountability Office (GAO) posed as college students and found that four out of 15 institutions they examined “encouraged fraudulent practices” to secure federal student loans, and representatives from all 15 colleges “made deceptive or otherwise questionable statements” to the undercover students.

Four of the GAO investigators who went undercover and applied to for-profit schools were encouraged by college personnel “to falsify their financial aid forms to qualify for federal aid,” according to the report.

In one case, a college recruiter encouraged the undercover applicant to hide $250,000 in savings so he would be eligible for federal student aid.

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