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Half of Money Lent to Students at For-Profits Will End Up in Default, Government Predicts

The U.S. Education Department expects nearly half of the money lent to students attending for-profit colleges to enter default over a 20-year period, according to an estimate published on Tuesday. More broadly, the department projects that 16 percent of the dollars lent to all college students who entered repayment in 2008 will go into default. The department will use the estimates for budgetary purposes. The estimate echoes the findings of a Chronicle analysis last summer, which found that one out of five government loans that entered repayment in 1995 had gone into default, and that the default rate reached 40 percent for loans made to students at for-profit colleges.

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