For-profit colleges under scrutiny as students default on loans

U.S. Education Secretary Betsy DeVos recently rolled back several Obama-era initiatives that would increase protections for student loan borrowers and curtail loan servicer misconduct. The initiatives were the result of three memos issued by the Obama administration to reform debt repayment. They involved creating a single platform system for loan repayment and banning collection fees for defaulted borrowers. DeVos rescinded the memos on April 11, explaining that the reform process “has been subjected to a myriad of moving deadlines, changing requirements and a lack of consistent objectives.” In response, 22…

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National Student Loan Cohort Default Rate Declines Steadily

The U.S. Department of Education today announced that the three-year federal student loan cohort default rate dropped from 11.8 percent to 11.3 percent for students who entered repayment between fiscal years 2012 and 2013. The trend has moved downward since FY 2010, when the cohort default rate stood at 14.7 percent. It’s the third straight year that the overall rate has fallen. From FY 2012 to FY 2013, cohort default rates fell for public and proprietary institutions while rising slightly among borrowers who attended private and foreign schools. “The Obama…

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