The University of the Rockies has a good federal student-loan default rate. Only 7 percent of borrowers from the for-profit graduate school default on their loans within three years of leaving the university — a better record than its peer institutions. But a closer look at the data reveals a strange pattern. From October 2008 to September 2011, nearly 1,300 borrowers from the University of the Rockies started repaying their loans. Yet the university awarded only 316 degrees during the 2008-2011 academic years. In other words, for every degree earned at the University of Rockies, four borrowers have their debts come due. So while many of the students aren’t defaulting, they aren’t graduating either.
This disconnect between repayment, completion, and default exposes a significant flaw in the key metric the federal government uses to police its student-loan programs and decide which colleges to bar from eligibility. And it highlights the weakness of current attempts at accountability around student loans.
The current measure of student-loan performance ignores what research shows is the most important indicator in determining whether students are able to avoid defaulting on their loans: whether they finished college.Borrowers who drop out with debt are also more likely to be unemployed and earn less than their peers who graduated. In fact, of student borrowers who entered college in the 2003-4 academic year and defaulted by 2009, 63 percent had dropped out.
Read more at The Chronicle of Higher Education: http://chronicle.com/article/Student-Loan-Default-Rates-Are/228771