Students attend a University of Phoenix commencement ceremony in Northern Virginia. Photo by Tracy A. Woodward/The Washington Post/Getty Images
A University of Phoenix advertisement, via YouTubeA few weeks ago, I read a report about how people who attend for-profit colleges end up saddled with student loan debt. I posted about it on Facebook, wondering who would possibly attend a school like that. Moments later, a message from my friend Riley popped up. "Abby, I will beat you down if you tell anyone this," she wrote, "but I have an MBA from the University of Phoenix."
Advertisement
Advertisement
"In addition to being more numerous and in their earliest years of loan repayment after the recession, non-traditional borrowers appear to be a particularly vulnerable and high-risk population, which helps to explain their divergent outcomes," the authors of the Brookings report, economists Adam Looney and Constantine Yannelis, wrote. These non-traditional borrowers, they added, "tend to be older when they first enroll, to be from lower-income families, and to live in poorer neighborhoods. They are more likely to be first-generation borrowers."In fact, students in this demographic made up for over one-third of all student loan defaults, according to the Brookings report. The study found that of the students who started to pay back their for-profit college federal loans in 2011 but had subsequently fallen into default by 2013, 70 percent were non-traditional borrowers.The rise in for-profit colleges can be traced back to 2008, when the economic crisis sent droves of non-traditional students back to school in an attempt make themselves more attractive in a terrible job market. Because community colleges were suffering from depleted state tax revenues, many could not accommodate this flood of new pupils; in turn, many of them wound up enrolling in the booming propriety schools that had popped up around the country. These universities promised short courses, flexible scheduling, and an opportunity to attain marketable skills—and it was a good sell.Read: Here's What You Should Do if You're Buried Under Private Student-Loan Debt
Advertisement