Study: Private student loans parallel subprime

[Jeff In Milwaukee]

16. Well....

You won't find many private, non-profit universities with default rates as high as the for-profit companies. That's because we're really not talking about the same demographics. Private, non-profit universities are the likes of Notre Dame and a host a small, liberal arts colleges across the country. This isn't the same student population as what shows up at ITT or Kaplan.

But that being said, perhaps the criteria should be "Get your default rates below XX% over the next four years or you're cut off."

Tightening the requirements for a student loan becomes a Catch-22 situation. Before the student can qualify for the loan, he/she has to prove that they don't need the loan. Now many eighteen-year-olds have the financial means to make the payments on a decent used car, much less a college education.

I can tell you, because I've taught at public, private and (once) a for-profit institution, that the for-profits are just running students through with almost no regard for whether they'll graduate or eventually find a job.