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June 21, 2013 3:12 PM An Honest (and Fair) Look Into For-profit College Student Loan Policies

By Daniel Luzer

One of the many problems with how we discuss for-profit colleges is that it’s often difficult for researchers to find good data about such institutions. Proprietary colleges, driven as they are directly by market reputation, have an understandable interest in keeping information to themselves. Everything here is great! People get jobs and their debt is manageable. No follow-up questions.

While real colleges do this to some extent, they’re often a little more open about what works in their institutions and what doesn’t, at least in part because such institutions are full of social science researchers eager to perform new studies.

But now academics are getting an opportunity to look into for-profit loan policies. According to an article by Goldie Blumenstyk in the Chronicle of Higher Education:

Now two professors at the University of Wisconsin at Madison will attempt to bridge both challenges with a new six-year study set to begin this September at DeVry University.
The researchers, Sara Goldrick-Rab, an associate professor of educational-policy studies and sociology, and J. Michael Collins, an assistant professor of consumer science, will be studying the borrowing practices of 10,000 online students at DeVry.

The question, which I find very interesting, has to do with whether or not providing information about student loan terms actually matters. Does it impact behavior? The research question is, “Does information affect loan-taking at all?” Blumenstyk:

All of the students in the study will receive loan counseling through a special online portal offering basic, intermediate, or intensive levels of loan counseling that the researchers will design. Students will be assigned randomly to one of the levels. Then, with the cooperation of DeVry, the researchers will track the students’ borrowing patterns and academic progress.

The study will run though 2019, but Goldrick-Rab expects to have useful results in a year.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer