Student Borrowing Higher at For-Profit Than Public Colleges

Students attending for-profit colleges are more likely to take out student loans than those who attend any other type of institution, according to new data released Monday by the Department of Education.

Seventy-five percent of students at four-year for-profit schools borrowed money to finance their education, compared with an average of 62 percent at private institutions and less than 50 percent, on average, at public four-year schools, the 2011-2012 National Postsecondary Student Aid Study revealed.

The difference in borrowing for students at nonprofit public and for-profit two-year schools was even more stark: 17 percent versus 64 percent, respectively, according to the data.

Not only did a higher percentage of students at for-profit colleges borrow money, they also took out larger loans.

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At four-year public institutions, the average student borrowed $6,950 - including federal, state, private and school-sponsored loans. Those attending a four-year for-profit school borrowed $8,300. Undergrads at private institutions borrowed slightly more, averaging $8,500 in student loans for the year.

Students at two-year for-profit colleges borrowed $2,500 more than their peers at comparable public schools. The higher borrowing can be attributed, in part, to higher tuition, says Jack Buckley, commissioner of the National Center for Education Statistics.

"It's well known that in many cases these private, for-profits are charging considerably more than their public, two-year counterparts and students have to find that money someplace," Buckley says.

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All told, 90 percent of undergraduates attending a four-year for-profit college received some type of financial aid during the 2011-2012 school year, compared with an average of 72 percent at public schools.

Active, and sometimes pushy, student loan counselors at proprietary colleges can also play a role, he says.

"Certainly the for-profits, I think, can occasionally be aggressive in terms of ensuring that their students take advantage of all possible aid opportunities," Buckley says.

Those opportunities are not restricted to loans, either.

Seventy-one percent of undergraduates at four-year for-profit and 65 percent at two-year for-profit universities received grants, scholarships or tuition waivers - essentially, free money.

Those figures drop to 51 percent at two-year public schools and an average of 58 percent at four-year public institutions, according to the report.

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Some public universities may lack the staffing or expertise necessary to help students navigate the financial aid process, Buckley says. That could result in fewer students capitalizing on funding opportunities.

Student demographics also play role, says Noah Black, spokesman for the Association of Private Sector Colleges and Universities, an organization of close to 1,700 proprietary institutions.

For-profit schools tend to attract older students who have families and hold down full-time jobs while enrolled, he says. They also draw a larger percentage of low-income and minority students, he adds.

"It's not that our schools are asking students to borrow more," he says. "It's just that sometimes they don't have a savings or the family background to be able to pay more of the tuition in cash."

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