Cooking the Books: For-Profit Schools Look For Ways to Avoid Government Sanctions
In an editorial that appeared yesterday in The New York Times, the paper's editors pointed out a troubling problem for student loan borrowers, especially those contemplating or already enrolled at for-profit colleges and institutions - misleading advice. Facing possible sanctions and loss of all federal student aid for colleges whose graduates have default rates of 30 percent or higher over three consecutive years or 40 percent in any one year, some for-profit schools have resorted to recommending "default management" programs (aka forbearance) so that their graduates would not fall into default (thereby keeping the schools out of the negative limelight).
We agree with the NYT that Income-Based Repayment programs offer a great alternative to forbearance or default and students and borrowers of all sorts need to know more about them. To learn more about IBR, visit our tools page. To read the editorial, follow me.
