The for-profit problem
This seems to go under the radar of most folks, particulary politicians. All colleges are not the same. And all college debt is not the same. It seems like ancient history now, but there was a time I never thought about student debt. Now, we must account for it in all we do. From Jordan Weissmann, writing in The Atlantic.
While we tend to talk about higher education as an undifferentiated mass of institutions relentlessly hiking their tuition at the expense of students and the federal government, it's actually a vastly fragmented industry, split between the public and private, for-profit and non-profit, 2-year and 4-year, as well as various levels of prestige and price. And knowing which schools have contributed most to the debt problem might give us a clue about how to fix it, while telling us which institutions have the most to lose in any effort at reform.
So with that in mind, here are three key points:
- Public colleges, because they educate so many students, generate the most debt overall.
- Private nonprofit schools, generate an outsized amount of student debt, but a relatively small portion of troubled borrowers.
- The for-profits have contributed in an especially malign way to the debt problem, both generating a disproportionate amount of loans, and an even more disproportionate amount of student loan defaults. [emphasis mine]