Washington D.C. — On Saturday, the Obama administration released new detailed data on the earnings and loan repayment rates of undergraduate students receiving federal aid at thousands of colleges across the country. An initial analysis by the Center for American Progress shows that the overall results for federal student aid recipients are positive but heading in the wrong direction, especially in the for-profit college sector. In particular, 10 years after entering college, the percentage of federal aid recipients who earn more than $25,000 annually—what the U.S. Department of Education estimates a typical high school graduate makes—is falling. Meanwhile, the percentage of borrowers who are not repaying their loans after three years is rising. Without more work to address college affordability, these trends are likely to only get worse.
“Going to college is a bet that can pay off big, but borrowing for college is not without risk,” said Ben Miller, Senior Director for Postsecondary Education at CAP and co-author of the column, “Our analysis shines a light on the most vulnerable borrowers at for-profit colleges, which may be leaving students worse off.”
The CAP analysis of College Scorecard data points out the following:
- An increasing share of undergraduate students getting federal aid are failing to exceed a $25,000 earnings threshold. Of undergraduate federal aid recipients who entered college in 1997 and 1998, only 30 percent earned less than $25,000 10 years later. For those who entered in 2001 and 2002, more than one-third failed to meet the earnings test.
- The percentage of undergraduate borrowers who are successfully repaying their loans after three years has been steadily declining. For for-profit colleges, the three-year loan repayment rate fell from 58 percent in 2006–2007 to 43 percent in 2010–2011.
- Across the board, three-year student loan repayment rates are declining. Across all institutions, the three-year repayment rate dropped from 75 percent for students who entered repayment in 2006 and 2007 to 62 percent for students who entered repayment in 2010 and 2011.
Read the analysis here.
For more information on this topic or to speak with an expert, contact Allison Preiss at firstname.lastname@example.org or 202.478.6331.