CCA Says Cohort Default Rate Increase Reflects Tough Economic Times

The Career College Association said the recent climb in cohort default rates for private sector colleges and universities reflects the current economic times and the financial well-being of the borrowers, not the quality of the institution.

CCA President Harris N. Miller said: “In a climate marked by near double-digit unemployment, it is not surprising that former students continue to find it more difficult to repay their student loans than they might in better economic times. Studies such as one on Pell Grant recipients performed recently by Mark Kantrowitz, an expert in student borrowing issues, show that those individuals with fewer financial resources have a harder time repaying loans, whether in private sector colleges and universities, community colleges, or other types of higher education institutions. We will continue to work with the Department of Education, students, graduates, lenders, and our institutions on default prevention strategies, but we urge all involved to not use CDR rates, which fluctuate depending on the economy and are tied to student demographics, as a proxy on the value of our schools or the education we provide.”

Miller noted that a “deeper dive” by the Department on CDR data would serve to eliminate confusion about institutions and concentrate efforts on helping students avoid default.