The distinction of having the highest student-loan default rate of any higher-education institution in Virginia goes to Everest College in Chesapeake. The default rate at the for-profit college (now doing business as Altierus Career College), which prepares students to be dental assistants, HVAC technicians and the like, is 36%, reports WVTF Radio IQ.
In absolute numbers, non-profit Liberty University took the top spot. A 10% default rate translated into 2,903 students.
The highest default rates tend to be small, for-profit vocational schools. Although the Radio IQ data doesn’t show it, some public colleges have a fairly high default rate as well. Low-income students are disproportionately likely to drop out of college — whatever the institution — and find themselves unable (or unwillling) to repay their loans.
Many progressives purport to be concerned about minorities and the high default rate blame for-profit colleges. The Radio IQ article quotes Diane Standaert with the Center for Responsible Lending (CRL) as noting that many for-profits are converting into non-profits to avoid state and federal regulations aimed at curbing “abusive practices.”
Acccording to CRL’s Virginia state profile, for-profit colleges disproportionately harm: low-income families, communities of color, and women.” Undergraduate enrollment at for-profits is 54% low-income, 45.4% African-American, and 60.9% female. Students at for-profit institutions in Virginia are less likely to graduate, more likely to take out student loans and graduate more indebted, and are more likely to default on their college debt, according to CRL.
What this analysis ignores is that there is considerable variability in the default rate for for-profit, private non-profit, and public non-profit institutions. The best for-profit institutions have lower default rates than the worst non-profits. Public institutions such as Norfolk State and Virginia Union University that cater to lower-income African-Americans have default rates comparable to many for-profits. Conversely, the for-profits cater to adult African-Americans — look at their television ads if you doubt me — who didn’t get a chance to attend college immediately after high school but, as adults, would like to advance their career and obtain a better job.
If mean ol’ fiscal conservatives wanted to shut down for-profit institutions with high default rates on the grounds that they were costing taxpayers, some progressive group would describe the disproportionate impact on upwardly striving African-Americans as racist. But the impetus for shutting down for-profits isn’t coming from the Right. It’s coming from the Left, hostile as always to the idea of someone somewhere making a profit.
The real problem isn’t whether an institution is for-profit or non-profit, it’s the fact that the federal government hands out student loans indiscriminately. Federal loans are not granted on the basis of a student’s likelihood to repay, whether based on SAT scores, class standing, credit score, years in the workforce or any other relevant factor. Why? Because objective lending criteria might impact minorities more than whites, which would constitute a different type of discrimination and invoke the inevitable cries of racism.
So, if you think with a leftist mindset, instead of insisting that the federal government establish standards to reduce the number of students defaulting on their debt, which would be racist, you attack for-profit institutions… even thought, by leftist standards, limiting educational opportunities for minorities by this indirect means also could be construed as racist. But if you think with a leftist mindset, that’s OK because you’re suspicious of for-profit enterprises anyway. Furthermore, you control the commanding heights that shape public opinion formulation — the media, academia, the educational bureaucracy — so you have the power to frame the issue the way you want.
That, folks, is democracy at work in America today.