For profit colleges face a 25% student loan default rate with the first three years of repayment, according to a government report seen by the Washington Post.
The government previously announced a crackdown on loans to these corporations. One of the looming threats to the sector is that, as default rates rise, these schools could become ineligible for government loan aid for students.
The headline number on defaults is having a damaging impact on the industry’s biggest players today, with shares falling for its biggest names.
- Apollo Group down 1.30% (APOL)
- Strayer Education down 0.95% (STRA)
- The Washington Post Company down 1.05% (WPO)
- Corinthian Colleges Inc. down 4.34% (COCO)