Community College Default Rate
by Daniel Luzer
It turns out it’s pretty high.
Apparently just attending a cheap school isn’t assurance that the student won’t default on student loans. According to a piece by Joanne Jacobs at the Hechinger Report:
New Education Department data shows 15.6 percent of community college students default on federal loans over the lifetime of the loan, reports College Bound. That’s lower than the 18.6 percent default rate for students of for-profit colleges, but considerably higher than the default rate for four-year, private, nonprofit institutions (5.6 percent) and four-year public colleges (6.3 percent).
This is despite the fact that, at an average $2,360 a year, community colleges are the least expensive form of higher education available.
It’s a little unclear why the default rate—the rate at which debt holders fail to make payments on the amount of money that they owe for their college loans—for community college students is so low, despite the relatively small loans community college students take out.
Jacobs posits that the reason so many community college students end of defaulting on their student loans is that most people who go through community colleges don’t actually become college graduates. Because the dropout rate at community colleges is so high, a lot of students leave such institutions without any real benefit; they just have the debt but they have limited career prospects to allow them to service that debt.