Classes began in Columbus this week for students of Virginia College, the latest ‘for-profit’ institution to open in Georgia. But as the number of ‘for profit’ colleges climbs, so do student loans in default.
Federal officials say the overall national student loan default rate for all types of institutions is up to 8.8 percent in the past year. But it’s nearly double—15 percent—for student loans at ‘for profit’ schools.
Officials with the ‘for profit’ industry say the trend is troubling, but not surprising given the economy and the typical student, who is often older and has a family. Industry critics however cite aggressive recruiting tactics luring students who are not in good financial position.
Brian Moran with the Association of Private Sector Colleges and Universities says federal regulations address that issue:
“There has been a number of changes in that regard, and we’re certainly hopeful that it will address the critics and those who think that some schools are overly aggressive.”
In Georgia, about 300 ‘for profit’ institutions are under regulation oby the state’s Non-Public Post Secondary Education Commission.
The group’s Bill Crews says federal agencies typically handle loan issues. But he says the Commission does have consumer protections for other issues—including a tuition guaranteed trust fund if schools close.
“There’s a certain percentage, and they have to pay into it X-amount of years. They also have to post an assurity bond, which is kind of like an insurance policy, so that if it goes under than we have some money to assist students.”
Crews says 'For profit’ schools in Georgia have to get an annual authorization to operate.