Students at for-profit schools in Virginia might get an unwanted personal finance lesson.
Among institutions of higher learning in Virginia, for-profit schools have the highest rate of student loan defaults. About 12 percent of the students from for-profit schools defaulted on their loans in 2008-09.
In contrast, the national default rate was 6 percent for public colleges and universities and 4 percent for private schools.
The issue has become a hot one, with Congress looking to restrict federal student aid to schools that are enrolling students who might be unprepared for the academic work and unlikely to repay their federally backed loans. When students don’t pay their loans, the taxpayer does not get repaid, and the individual cannot expunge the debt, even in bankruptcy.
The Chesapeake campus of the Aviation Institute of Maintenance, which awards associate degrees, had a default rate of about 23 percent — the highest in the state. The default rate was about 21 percent at Everest College in Newport News; 17 percent at Centura College in Virginia Beach; and 14 percent at Stratford University, which awards bachelor’s and master’s degrees and has a new building in Richmond.
By comparison, the default rate was about 10 percent for J. Sargeant Reynolds Community College in the Richmond area; 2 percent for Virginia Commonwealth University and George Mason University; and below 1 percent for Virginia Tech.
Officials at for-profit schools say there’s a logical explanation for why their default rates may be high: Such schools tend to serve students with complicated lives or other challenges that prevent them from enrolling in public or private colleges.
For example, students who attend for-profit colleges are more likely to have full-time jobs and families. Those responsibilities can interfere with the students’ studies, and, down the road, they can lead to higher student loan default rates, according to officials from for-profit schools. (story continues after graphic)
Some people refer to such schools as “commercial colleges” because they run a lot of TV advertisements. These schools, such as DeVry University (with a default rate of 10.2 percent) and the University of Phoenix (12.9 percent), usually target working adults and parents in their commercials.
The schools pitch their online classes, which allow busy adults to receive their degrees on their own time.
Tandra Berkins has been attending a for-profit school in Richmond for two semesters to study medical coding.
“I chose a for-profit school because other schools didn’t work for me. For financial reasons, I had to keep my day job, and I’m taking classes at night to keep going,” Berkins said.
The Richmond area has about a dozen for-profit college campuses.
One of the newest, South University, is in Glen Allen, in the Short Pump area. The university, which offers bachelor’s and graduate degrees, is based in Savannah, Ga. Its student loan default rate was 7.9 percent, according to the Department of Education.
Another popular for-profit school is Kaplan University, which is owned by the Washington Post Company and offers classes exclusively online. Kaplan’s student loan default rate was 17.2 percent.
James Mason is a professor of writing and English for Kaplan University and lives in Richmond. He said online courses are a good fit for many students.
“It seems counterintuitive that greater educational intimacy could be fostered in an online environment, but that has been my experience. One has to keep in mind that at Kaplan, we have live seminars where students can actually hear the instructor and ask questions,” Mason said.
Linda Woodley, director of private and out-of-state postsecondary education at the State Council of Higher Education for Virginia, noted that many for-profit colleges seek to prepare students for specific careers. She prefers to call such schools “career-technical institutions.”
Such institutions “provide an option for students who may not be accepted in a traditional college, or who want/need vocational training completion sooner than four or five years it takes to complete an undergraduate degree,” Woodley said.
“Every student is not interested in a liberal arts education, and that’s okay. What’s important is that all students obtain some type of education beyond high school that prepares them to be productive citizens.”
Check out the student loan default rates here.
Learn more
For more on this topic, check out this NPR podcast.
Students at for-profit schools in Virginia might get an unwanted personal finance lesson.
Among institutions of higher learning in Virginia, for-profit schools have the highest rate of student loan defaults. About 12 percent of the students from for-profit schools defaulted on their loans in 2008-09.
In contrast, the national default rate was 6 percent for public colleges and universities and 4 percent for private schools.
The issue has become a hot one, with Congress looking to restrict federal student aid to schools that are enrolling students who might be unprepared for the academic work and unlikely to repay their federally backed loans. When students don’t pay their loans, the taxpayer does not get repaid, and the individual cannot expunge the debt, even in bankruptcy.
The Chesapeake campus of the Aviation Institute of Maintenance, which awards associate degrees, had a default rate of about 23 percent — the highest in the state. The default rate was about 21 percent at Everest College in Newport News; 17 percent at Centura College in Virginia Beach; and 14 percent at Stratford University, which awards bachelor’s and master’s degrees and has a new building in Richmond.
By comparison, the default rate was about 10 percent for J. Sargeant Reynolds Community College in the Richmond area; 2 percent for Virginia Commonwealth University and George Mason University; and below 1 percent for Virginia Tech.
Officials at for-profit schools say there’s a logical explanation for why their default rates may be high: Such schools tend to serve students with complicated lives or other challenges that prevent them from enrolling in public or private colleges.
For example, students who attend for-profit colleges are more likely to have full-time jobs and families. Those responsibilities can interfere with the students’ studies, and, down the road, they can lead to higher student loan default rates, according to officials from for-profit schools. (story continues after graphic)
Some people refer to such schools as “commercial colleges” because they run a lot of TV advertisements. These schools, such as DeVry University (with a default rate of 10.2 percent) and the University of Phoenix (12.9 percent), usually target working adults and parents in their commercials.
The schools pitch their online classes, which allow busy adults to receive their degrees on their own time.
Tandra Berkins has been attending a for-profit school in Richmond for two semesters to study medical coding.
“I chose a for-profit school because other schools didn’t work for me. For financial reasons, I had to keep my day job, and I’m taking classes at night to keep going,” Berkins said.
The Richmond area has about a dozen for-profit college campuses.
One of the newest, South University, is in Glen Allen, in the Short Pump area. The university, which offers bachelor’s and graduate degrees, is based in Savannah, Ga. Its student loan default rate was 7.9 percent, according to the Department of Education.
Another popular for-profit school is Kaplan University, which is owned by the Washington Post Company and offers classes exclusively online. Kaplan’s student loan default rate was 17.2 percent.
James Mason is a professor of writing and English for Kaplan University and lives in Richmond. He said online courses are a good fit for many students.
“It seems counterintuitive that greater educational intimacy could be fostered in an online environment, but that has been my experience. One has to keep in mind that at Kaplan, we have live seminars where students can actually hear the instructor and ask questions,” Mason said.
Linda Woodley, director of private and out-of-state postsecondary education at the State Council of Higher Education for Virginia, noted that many for-profit colleges seek to prepare students for specific careers. She prefers to call such schools “career-technical institutions.”
Such institutions “provide an option for students who may not be accepted in a traditional college, or who want/need vocational training completion sooner than four or five years it takes to complete an undergraduate degree,” Woodley said.
“Every student is not interested in a liberal arts education, and that’s okay. What’s important is that all students obtain some type of education beyond high school that prepares them to be productive citizens.”
Check out the student loan default rates here.
Learn more
For more on this topic, check out this NPR podcast.
How hilarious is it that this study didn’t include any of the “non-profit” private institutions such as Randolph-Macon, et al. There’s a giant gap here in part because of the exclusion of one of the largest single-state concentrations of private colleges on the east coast because they don’t fit the, “public” or “for-profit” mold. And why would they be significant? Because they cost over $25 grand A YEAR – as much as an entire degree at either the public or for-profits mentioned here. There are as many private schools in Virginia as there are for-profits and public institutions COMBINED –… Read more »
I’m not sure what the above poster’s point is, but from everything I’ve seen, private non-profit universities tend to have small default rates. Despite arguably overcharging for tuition. People are ignoring the elephant in the room though, which is the value of these for-profit degrees. Generally, they may not cost much, but they are worthless. Not worth the paper they are not printed on. The exception is specific vocational schools. I think there should be no public dollars going to for-profit universities. That will force them to provide real value, not to effectively steal money from those most in need… Read more »
The poster’s point is: this “study” leaves off 27 colleges.
“…but from everything I’ve seen, private non-profit universities tend to have small default rates.”
Wow, even from private, non-profit institutions who historically serve first-in-family college goers like many of Virginia’s institutions? Or whose entire missions are to serve underserved populations? We’re not talking about Harvard here, Virginia schools are full of far more variety than just rich white schools where Mom and Dad always pick up the bill.
Y’all seem to be missing the point: that the For-Profit schools push students to sign up promising they’ll find high-paying jobs. They use high-pressure sales techniques and make unrealistic promises.
No, I got it Cindy. They are a racket. DBX seems to be ignoring that aspect, which is the most important thing. The for-profit schools take advantage of the least educated, who think they are getting something for their money, and are – a load of non-dischargeable debt.
Certainly if any private, non-profit, school in Virginia is doing the same thing, they should suffer the same consequences.
Charles – I completely agree — ANY college doing that, in their “traditional” or adult student programs, should be lambasted for doing that. I’m not ignoring anything, I’m just pointing out how massively flawed the “study” is. Wouldn’t you rather the study actually reflect what you are preaching? UVA Wise isn’t even on this thing, but Centura’s on here twice. Why are some school’s national default percentages used when they have 10x the students? I don’t disagree with you – but crap journalism doesn’t make your point stronger, it only weakens it. How much you want to bet that a… Read more »
And since I’ve had a comment deleted already for saying this, might try again:
Note that the very college who advertises all over THIS ARTICLE isn’t even in this study.
@dbx: You did read the first few sentences of this article, right? Obviously not, becuase if you did, you would have read the part that mentions private colleges having the lowest default rate out of the three types. Reading is fundamental.