The Wall Street Journal reported that student debt payback has been under reported for the past several years. The revised numbers reveal a debt crisis far worse than many believed. According to the WSJ analysis, the Department of Education “previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.”
The original numbers released showed there were 347 colleges and trade schools where over half of the student borrowers had defaulted or failed to pay down their debt by even a single dollar within seven years. If that sounds disconcerting, the WSJ’s new analysis indicates the number of colleges and vocational schools where over half of the students default or fail to pay down their debt by even a single dollar within seven years to be 1,029.
Please be sure to conduct your own thorough investigation on any schools you are considering, particularly if they are for profits or trade schools as these schools almost always have the highest loan default rates. A new administration takes over tomorrow and there’s a chance some of these schools could lose their ability to qualify for federal student loans and fold. You don’t want to find yourself in a position where your school is being forced to close.