500 colleges and universities in the United States are facing a concerning common feature: at least 40 percent of recent graduates who received federal loans are not repaying them. This information is based on new data released by the U.S. Department of Education.
Concerning Status of Student Loans
This data examines approximately 17 million borrowers who entered the loan repayment process for the first time between January 2020 and May 2025. At many schools, more than half of new borrowers are at least three months behind on their payments or have defaulted after nine months.
Read more: Trump Agrees to Bipartisan Ethical Proposal in Cryptocurrency Bill
One explanation for this situation is the disruptions caused by the pandemic in the student loan system, which has left many borrowers confused. However, the story of Lisa Kalemba, one of the graduates, shows that several of these schools charge high fees without providing adequate skills to students.
Consequences of the Current Situation for Borrowers and Taxpayers
Kalemba, who enrolled at UEI College over a decade ago, says she paid nearly $20,000 for an educational program but did not receive the expected skills. With growing public concerns about student debt and doubts about the value of higher education, this data highlights hundreds of private, for-profit schools that clearly have issues in this regard.
This data is not only concerning for borrowers but also represents bad news for taxpayers. Many of these schools are not only benefiting from federal aid but are dependent on it. Priscilla Cooper, a researcher at the American Institute for Publishing, says this data raises questions about whether some of these schools should lose access to federal aid entirely.
Of the 500 schools with a default rate of 40 percent or more, only 15 are public institutions. Most of them (424) are private, for-profit schools. Various schools such as Tulsa Welding School and Miller-Motte College are also on this list and have concerning default rates.
Read more: Abbott Reaches Agreement to Settle Complaints at Infant Formula Factory in Michigan · Increase in Family Income and Decrease in Poverty in 2025
Source: npr.org
