One-fourth of the students who used federal student loans to pay for classes at for-profit schools in 2008 have defaulted on their loans, up from 21% for 2007, writes FBR Capital Markets analyst Matt Snowling, after reviewing new US Department of Education data.
Default rates are rising, in part, because under Obama DOE is tracking borrowers for three years after they're in school, not just 2 years as in the past. The 2-year limit enabled schools to apply for deferments, Snowling told investors in a report; borrowers still went bad, they just didn't show up in a school's stats.
Local schools with the highest default rates:
Lincoln Technical Institute's Philadelphia campus, where 47.5% of the school's 2008 borrowers took taxpayers' money and ran;
CHI Institute - Broomall, 34.9%;
CHI Institute, Philadelphia, 31.4%.
Chi is owned by Stanley Kaplan and the Washington Post Co.