Under current rules, colleges with federal student loan default rates over 25 percent for three straight years can be disqualified from taxpayer-supported student-aid programs, but experts argued that colleges were manipulating the two-year figures. So, starting in 2012, colleges will be judged on how many students default within three years of starting repayment, reports the Associated Press — though the new threshold default rate for penalties will be 30 percent instead of 25 percent. Nearly 12 percent of borrowers who began repayment in the 2007 fiscal year defaulted within three years—up from 9.2 percent for 2006. But at commercial colleges, the rate was 21.2 percent within three years, AP calculated from the government’s data. That was up from 18.8 percent for the 2006 fiscal year. Harris Miller, president of the Career College Association, which represents commercial colleges, said the increase reflected the poor economy. He also said that high default rates did not measure an institution’s quality and that his group’s members enrolled large numbers of low-income students. "If you accept low-income students, you’re going to have high default rates," Miller said. In recent years, only a handful of institutions have lost eligibility for federal aid because of high default rates. The new data, however, show that more than 300 colleges—more than 85 percent of them commercial—had three-year default rates higher than 30 percent. Those colleges will have to improve when the rules take effect or risk losing federal aid…

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