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High Default Rates at New York For-Profit Colleges

By

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."

Paul Fain

Paul Fain, Contributing Editor, came to Inside Higher Ed in September 2011, after a six-year stint covering leadership and finance for The Chronicle of Higher Education. Paul has also worked in higher ed P.R., with Widmeyer Communications, but couldn't stay away from reporting. A former staff writer for C-VILLE Weekly, a newspaper in Charlottesville, Va., Paul has written for The New York Times, Washington City Paper and Mother Jones. He's won a few journalism awards, including one for beat reporting from the Education Writers Association and the Dick Schaap Excellence in Sports Journalism Award. Paul got hooked on journalism while working too many hours at The Review, the student newspaper at the University of Delaware, where he earned a degree in political science in 1996. A native of Dayton, Ohio, and a long-suffering fan of the Cincinnati Bengals, Fain plays guitar in a band with more possible names than polished songs.