New data from the Minnesota Office of Higher Education show that Minnesota for-profit college students take on crippling amounts of loan debt. Minnesota for-profit college students took out $408 million in student loans in the 2008-2009 school year, the highest of students in any category of Minnesota higher education institutions. On a per-student basis, for-profit college students took out over five times the amount in loans as students of public two-year colleges did in 2008-2009.
|"Minnesota Measures 2011," January 2012, p. 55-56|
State College students $2992The per-student calculation isn't a perfect measure, since it doesn't account for total credit load. Since a larger proportion of public two-year college students are part-time students, this reduces the average loan load. Despite this, the average still illustrates a stark difference in significance of student loan debt to for-profit college students. 96% of for-profit college students took out loans in 2008-2009, compared to 38% of public two-year college students.
State University students $5202
U of M Students $5504
Private non-profit $7825
Private for-profit $15385
Even worse, for-profit college students were far more likely to take out private loans than public college and university students. According to the Minnesota Measures report, 43% of Minnesota for-profit college students took out private loans. According to the Project on Student Debt:
Private student loans are one of the riskiest ways to pay for college.The majority of these non-federal loans are made to students by private banks and lenders. No more a form of financial aid than a credit card, private student loans typically have uncapped variable interest rates that are highest for those who can least afford them. Even when fixed rates are offered, private loans lack the basic consumer protections and flexible repayment options of federal student loans, such as unemployment deferment, income-based repayment, and loan forgiveness programs.High student loan debt is a tremendous burden for graduates. It's even worse for students who take on debt but do not complete a degree. It is impossible to discharge in bankruptcy, which as the Wall Street Journal put it, gives this type of debt a "unique type of hopelessness."
Nevertheless, new Office of Higher Education Director Larry Pogemiller, was confirmed promising to look to for-profit colleges for innovations that can be imported to public colleges. Even worse, he expressed willingness to discuss eliminating state funding for public higher education and creating a voucher program that would direct even more state money to for-profit colleges.
Let's hope that one of these "innovations" isn't the student debt load imposed on for-profit college students.
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