The big takeaways from the Senate HELP committee’s report on the for-profit college sectors were that the institutions (a) are expensive, (b) produce a whole lot of dropouts, and (c) are mostly financed by the federal government. If that weren’t bad enough, they only spend about 17 percent of their funds on actual instruction, and a whole lot more on marketing — including lobbying the feds to pay their bills. A new release (pdf) from Moody’s builds on these findings, and concludes that the situation is not only bad but getting worse. Students at for-profit colleges are defaulting on their loans sooner and sooner after entering:
For the 2002 cohort, it took over three years for 4 percent of students to default. For the 2010 cohort, that figure was reached within one year — a tripling in speed of default.
(The Washington Post owns Kaplan, which runs a for-profit college service.)