The study found that:
- Students at two-year for-profit colleges were nearly 50 percent more likely to borrow than students at public colleges, all other factors being equal.
- Latino and white students at four-year for-profit colleges were significantly more likely to borrow than Latino and white students at public or nonprofit schools.
- Students who took out debt borrowed over $1,300 more on average to attend two-year for-profit colleges than to attend two-year public colleges.
- There were few significant differences in predicted amount borrowed at four-year colleges.
- Students’ financial resources had a significant impact on the likelihood of borrowing and the amount borrowed.
- Student characteristics other than race or ethnicity had a bigger impact on the likelihood of borrowing than on the amount borrowed.
Based on these findings, we recommend:
- The Department of Education should strongly enforce the gainful employment rule to limit federal loans and aid to poorly performing for-profit colleges.
- The Department of Education should discharge the federal student debt of for-profit college students harmed by deceptive college practices.
- Regulators should continue to investigate and publicly report on the incentives and lending practices of for-profit colleges.
- The Consumer Financial Protection Bureau should enact student loan servicing standards that encourage affordable repayment options.