October 17, 2021

Default management creates a big shift in default rates between 2 and 3 years.

Education Department data released last month shows that rates at nearly all institutions rose when measured for three rather than two years, as federal law will soon require.  Duh… Yet at 243 colleges, or about 8 percent of the 3,168 degree-granting institutions The Chronicle examined, the three-year rate was at least 15 percentage points higher than the two-year rate, a substantial increase, how is that a surprise???  Of those, 83 percent were for-profit colleges We would wager that most loan portfolios would show an increase in defaults when compared to a longer period of time.

YET, the college showing the biggest gap was Professional Business College, a private nonprofit institution in New York City, where the difference between the two-year rate and the three-year rate was more than 30 percentage points.

Link to article: http://chronicle.com/article/Many-For-Profits-Are/126689/?sid=wb&utm_source=wb&utm_medium=en