High Default Rates at New York For-Profit Colleges

March 26, 2018

New York State in 2016 spent $68 million on scholarships that went to students who were attending for-profit colleges, according to a new report from the Century Foundation. New York spends more on aid that goes to for-profits than any other state. And that amount will increase if New York expands its free-college program eligibility to for-profits.

Yet the state's for-profit colleges lag other sectors in student outcomes such as debt, default and earnings, the report found. For example, roughly half of students who attend a New York-based for-profit defaulted on their student loans. And the report said that for 39 percent of for-profits located in the state, a majority of their students fail to earn more than the average worker who holds just a high school credential.

"New York’s commitment to college accessibility shows in its highest-in-the-nation contribution to supporting private higher education," the report said. "Unfortunately, some colleges -- concentrated in the for-profit sector -- benefit from this investment while leaving students with more debt, worse employment prospects and higher default rates relative to peers at public and nonprofit schools."

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