As the another week in for-profit higher education enters the annals of history, we pause to consider what we've witnessed.
Mounting student-loan debt commanded headlines this week, owing perhaps to the Occupy Wall Street protests occurring in New York City. It appears that even Ivy League institutions are not immune to this growing problem. "[Princeton] University’s default rate is the highest of the country’s top 20 universities as ranked by the U.S. News and World Report, according to an analysis by news website Business Insider," reports an October 7, 2011 Daily Princetonian article. "The website reports that the University’s default rate tops the list at 2.2 percent, with peer institutions such as Massachusetts Institute of Technology and California Institute of Technology reporting figures near 0 percent."
This low rate of default doesn't diminish the fact that the economy in its present anemic condition creates the conditions in which even the academic cream of the crop can go rogue on their debt.
The usual suspects remain essentially the same. "Default rates increased for public, private and for-profit schools alike," the Princetonian article continues. "However, for-profit schools saw the highest increase from 11.6 to 15.0 percent, with schools such as University of Phoenix and ITT Technical Institute reporting increases of 18.8 percent and 22.6 percent, respectively."
For Floridians, on the other hand, the default conditions are somewhat more critical. "The statistics on loan defaults among college students show Florida with a higher overall rate, at 10.5 percent, than the national figure of 8.8 percent," reports an October 7, 2011 Orlando Sentinel editorial. "The numbers at the state's 100 or so for-profit colleges, including Centura, are even worse. All but a few posted higher default rates than the Florida average."
The editorial goes on to paint a general picture of indifference in The Sunshine State: "Florida's response? (Imagine crickets chirping.) Instead, leaders' hair should be on fire, knowing a big share of the next generation will enter the working world with the decked stacked against them."
A similar sentiment is felt in Northern California. "Both Forbes magazine and The Economist published 'higher-education bubble' stories this year; each made the case that student loans are the next subprime mortgages," reports an October 6, 2011 Sacramento News Review article And just before the start of this academic year, Moody’s Analytics, a wing of the behemoth Wall Street credit-rating agency, released 'Student Lending’s Failing Grade.' This study suggested that tuition hikes, record student debt and unchecked lending are fostering conditions that alarmingly parallel the real-estate bubble and bust of the 2000s."
Such dire warnings, whether issuing from California, Florida, or elsewhere, offer some sense of the uncertainty plaguing these times. An educated populace adds real and lasting value to any advanced economy. But if an unreasonable measure of this value is siphoned into dark usurious pools, there's not a whole lot that can be done to keep the status quo's boat afloat.