Default Spike in Student Debt Driven by Unconventional Borrowers
- Attendees from for-profit, two-year programs struggle to repay
- Two-thirds of default surge is from shifting student traits
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The doubling in U.S. federal student-loan default rates from 2000 to 2011 may have had a lot to do with who attended college and where they studied.
People who poured into for-profit and two-year colleges during the Great Recession made up a disproportionate share of borrowers in repayment, according to a study released Thursday by the Brookings Institution in Washington. The students, many of whom turned to non-traditional schools as their job prospects weakened, either finished quickly or failed to graduate, then were supposed to begin repaying federal loans.