Data and Research

In May, we wrote about the 114 career education programs from which more students default than graduate (it’s actually even worse than that since they have more defaulters in one year than graduates over two years). With Corinthian Colleges now preparing to sell or close all of its campuses, it is worth noting that Corinthian runs 25 of the 114 programs with more defaulters than graduates.

These programs are shockingly bad. Everest College Phoenix Associates’ programs in Securities Services Administration and Management, and in Business, Management and Marketing both had more than three times as many defaulters as graduates. Everest University in Tampa has an Associate’s degree program in Computer and Information Sciences that also has three times as many defaulters as graduates.

An effective gainful employment regulation would help protect students and taxpayers from schools like Corinthian. By enforcing the law requiring career education programs to prepare students for gainful employment in a recognized occupation, a strong rule would hold programs to clear outcome standards and measure their performance against those standards regularly. It would force the worst performing programs to improve or lose eligibility for funding before burying countless students with debts that may haunt them for the rest of their lives.

We and more than 50 other organizations submitted written comments urging the Education Department to improve its draft gainful employment rule to better protect students and taxpayers, including by requiring schools to provide financial relief for students in programs that lose eligibility, limiting enrollment in poorly performing programs until they improve, and closing loopholes and raising standards. If a rule with the changes we called for had already been in effect, Corinthian would long ago have had to rapidly improve or close programs in a way that better protected students and taxpayers.

The final gainful employment rule will be too late to protect Corinthian students, but it is not too late to protect the millions of students enrolling in other schools’ career education programs and the taxpayers who subsidize them.

Click here for a sortable list of the 114 programs with more defaulters in one year than graduate over two years. To read the New York Times editorial on our May blog post, click here.

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As the Department of Education works on a final rule to stop federal funding for career education programs that over-promise and under-deliver, it needs to close loopholes to prevent unscrupulous colleges from gaming the system.

Under the draft regulation, career education programs would be judged by two different tests: how the debt of their graduates compares to later earnings, and how many of the programs’ borrowers default on their loans.  Programs that consistently exceed allowable thresholds of debt-to-earnings or rates of default would lose eligibility for federal aid.  While many in the for-profit college industry complain that the tests are too stringent, the data show the exact opposite and that the rule needs to be strengthened.

Exhibit A for a tougher rule is the fact that 20 percent of the 114 parasitic career education programs – those where more students default than graduate – would pass the proposed tests. And exhibit B would appear to be Education America Inc.’s Remington College, a formerly for-profit chain that began operating as a nonprofit in 2011.

Data released by the Department in conjunction with the rulemaking show three large certificate programs that have a collective repayment rate of 12 percent – meaning only 12 percent of borrowers are paying down their debt. The three are large medical/clinical assistant certificate programs at what appear to be Remington’s Texas, Ohio and Alabama campuses. (Some of the data files released by the Department do not include college names so only the Department can confirm which college’s programs these are.  However, looking across multiple data files, including a file with college names, strongly suggests these three low-repayment programs are the Remington programs.)

To make matters worse, these three programs would not fail under the Department’s draft regulation– the one that industry complains about being too strict.  Despite the extremely low repayment rate, the aggregate cohort default rate for the three Remington programs is only 14 percent, far below the threshold of 30 percent. Such a low rate of borrower default from programs where hardly any borrowers are paying down their loans suggests the college may be manipulating their default rates by putting former students in forbearance during the window when default rates are being measured – regardless of whether it is in the borrowers’ best interest to do so. In fact, a Remington College executive said as much in 2009, noting that “we’ve known all along what [the Department] finally figured out,” that borrowers receiving forbearance and deferment were later defaulting on their loans once it stopped tracking defaults after two years. The Department then changed its default monitoring to a broader three-year metric. “They [the Department] decided we were getting off too easy,” the Remington executive noted. (Note that colleges can and do manipulate three-year default rates, but it takes more work to do so than for two-year rates.)

Programs where most students borrow and the vast majority of borrowers cannot repay their loans should not keep enrolling students receiving federal aid. The Department could close this loophole in the gainful employment rule by instituting a repayment rate in addition to the other tests. It must also prohibit unscrupulous schools from manipulating their program default rates or their repayments rates by making small payments on behalf of former students.

Read more about these issues and recommendations in our comments on the Department’s draft gainful employment rule. -Debbie Cochrane

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The Obama Administration is moving forward in defining what it means for career education programs to “prepare students for gainful employment in a recognized occupation.” This requirement – which applies to programs at public, nonprofit, and for-profit colleges – has long been in federal law, but, without a rule defining what it means, the Department has been powerless to enforce it.

The draft rule would measure career education programs’ outcomes in two ways. First, the debt burdens of program graduates who received federal aid would be compared to their later earnings. Second, students’ ability to repay their loans – including both graduates and noncompleters – would be measured through a program-level cohort default rate.  Programs where graduates’ earnings don’t justify typical levels of debt, and those where borrowers too frequently default on their loans, would lose eligibility for further federal grants and loans unless the programs improve.

The data released by the Department in conjunction with its proposed rule are alarming. They couldn't make a better case for why the rule is desperately needed and must be strengthened to provide meaningful protections for students and taxpayers.

To illustrate:  Of the 4,420 programs in the dataset with complete data (meaning that both students’ debt burdens and default rates are calculated), there are 114 programs where the data show more defaulters than graduates.  In other words, students receiving federal aid to attend these programs are more likely to find themselves unable to repay their debt than they are to complete the credential they sought.  It’s also important to understand that this very much understates the problem at these programs.  That’s because, due to the way that debt burden and defaults are measured, these figures represent the defaults from one cohort year (those who entered repayment in 2009) compared to two years’ worth of completers (those who completed in either 2008 or 2009).

Here are a few facts about these 114 programs with more defaulters than graduates:

  • All 114 are at for-profit colleges, and most (82) are associate degree (AA) programs.
  • They include a sizable share of measurable programs in some fields. Seven of the 13 AA programs in ‘securities services administration/management’ have more defaulters than graduates.  Six of the 17 ‘accounting technology/technician and bookkeeping’ AA programs have more defaulters than graduates.  And the same is true for all three of the AA programs in ‘criminalistics and criminal science.’
  • Almost two dozen of them (23 of the 114) fully pass the proposed rule’s modest standards. Of the others, 14 are “in the zone” – a program limbo for those not good enough to pass and not bad enough to fail outright – and 77 fail.

The fact that 20% of the programs leaving more students in default than with credentials pass the Department’s proposed tests clearly shows that the tests aren’t strong enough. And even the 68% of programs that fail outright would remain eligible for federal funding under the proposed rule unless they failed again. What is also crystal clear from the data is that the stakes for students are high:

  • Many of the programs are huge: 33 of the 114 programs had more than 1,000 students who entered repayment in a single year, and 6 of them had more than 5,000 borrowers who entered repayment in that year.
  • There are seven programs where the number of defaulters exceeded the number of completers by more than 1,000.  All seven are at the University of Phoenix.

These are parasitic programs, consuming resources to the detriment of students and taxpayers. Reasonable people may disagree on certain aspects of the Department’s proposal, but the need to strengthen the rule so programs like these must shape up should not be one of them. Click here for a sortable list of the 114 programs with more defaulters in one year than graduate over two years. To read the New York Times editorial on our May blog post, click here. - Debbie Cochrane

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Much of the information we have on college costs, financial aid, enrollment, and completion comes from the U.S. Department of Education’s annual surveys of colleges, collectively called IPEDS. Researchers and policymakers rely heavily on IPEDS data, and the Department’s own consumer tools like College Navigator and College Scorecards do, too.

As important as IPEDS is, the data collected are far from perfect and opportunities to improve IPEDS as a whole are few and far between. But there is one such opportunity now – the federal government is asking the public for comments on how to improve IPEDS for the next three years. Here are some of our biggest asks:

  • Collect data on cumulative debt at graduation for completers of undergraduate certificates, associate's degrees, and bachelor's degrees. The only currently available data on cumulative debt by institution are voluntarily reported, and as a result are incomplete. For example, the vast majority of for-profit colleges choose not to report these data. Better data could immediately be put to use in consumer tools like the College Scorecard and the President’s proposed rating system.
  • Collect graduation rates for Pell Grant recipients. This should be an easy ask of colleges since they’re already required by law to calculate graduation rates for Pell Grant recipients for the purposes of disclosure, and some are already reporting these rates voluntarily to U.S. News. But many colleges don’t comply with this disclosure requirement, and, even for those that do, there’s no easy way for consumers, researchers, journalists, or policymakers to find colleges’ Pell graduation rates across the board because the rates aren’t reported via IPEDS. Reporting the rates would create no extra burden on colleges and would serve as a check on noncompliant schools.
  • Collect graduation rates for part-time and non-first-time students immediatelyCurrently available graduation rates include only first-time students who enroll full time, leaving out substantial shares of entering students. The Department is finally poised to begin collecting graduation rates for part-time and non-first-time students, too, but has recently proposed delaying their collection until 2015-16. This delay is unnecessary.
  • Collect data on veterans' outcomes. IPEDS already includes questions on veterans’ enrollment and access to services, so collecting information on these students’ outcomes – in the same way other students’ outcomes are tracked – is reasonable and the fastest way to obtain data on veteran students’ outcomes.
  • Collect better data on for-profit colleges’ spending. The Department’s proposed changes to IPEDS already include increasing the level of detail in for-profit colleges’ reporting of revenues, expenses, assets, and liabilities, as recommended by a technical review panel focused on improving the finance survey for for-profit colleges. While this represents a good first step, IPEDS should also collect data on expenditures for recruiting, advertising, and marketing.
  • Make it easier to combine IPEDS data with other federal data. The Department provides important data about colleges outside of IPEDS (such as cohort default rates, or CDRs). However, it is difficult to view IPEDS data side-by-side with data from other federal sources that use a different system for identifying colleges. Adopting common identifiers for colleges across all data sets would address this problem. In the interim, the Department should provide tools that help users combine these data sets, for both research and consumer information purposes.

TICAS outlined these and other recommended changes in the first and second rounds of comments to improve IPEDS collection. So far, the Department’s responses to these suggestions have focused primarily on the additional burden they would impose on colleges. In some cases – like the Pell graduation rate reporting, discussed above – this is simply not true. But in the cases where new reporting requirements might in fact increase burden, why not offset the burden by eliminating reporting requirements that are duplicative or have become obsolete?

The Department needs to hear from others that these changes to IPEDS are important and urgently needed. The proposed IPEDS collection is out for comment for the third time, with comments due November 14, 2013 at

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As the possibility of Congress failing to raise the debt limit and the federal government defaulting on its obligations becomes more real, we looked at what impact this might have on federal student loans.

Since the U.S. government has never defaulted before, we cannot know for sure what impact it would have. However, when the government came close to defaulting in 2011, J.P. Morgan issued a report entitled “The Domino Effect of a US Treasury Technical Default.” It concludes that “any delay in making a coupon or principal payment by the Treasury — even for a very short period of time — would almost certainly have large systemic effects with long-term adverse consequences for Treasury finances and the US economy.” The report estimates that a default would likely lead to a 20 percent decline in foreign demand for Treasuries over a one-year period, increasing the yields on 10-year Treasury notes by 50 basis points.

Enacted in August, the Bipartisan Student Loan Certainty Act of 2013 ties federal student loan interest rates to the 10-year Treasury note yield (as of the May auction) plus a fixed increment. So how much would a 50 basis point increase in Treasury yields cost college students and their families in higher interest payments on their student loans?

For a college freshman who starts school in fall 2014, takes out the annual maximum in subsidized and unsubsidized Stafford loans, and graduates in four years, it will increase the cost of college by about $1,000. That’s a 10% increase in interest payments over 10 years on the $27,000 she borrowed. If the government’s defaulting were to increase rates by 100 basis points, it would increase this student’s costs by $2,000 — a 20% increase in interest payments. For a graduate student who starts a two-year program next year, borrows the annual maximum in unsubsidized Stafford loans, and finishes in 2016, a 50 basis point increase would cost him about $5,000 more and a 100 basis point increase would cost him about $10,000 more in interest payments over a 25-year repayment period. (See the tables below for more details.)

In addition, J.P. Morgan and others expect that a default would slow economic growth, lowering family incomes and making it even harder for those already struggling to pay for college.

Undergraduate borrower taking out annual maximum subsidized and unsubsidized Stafford loan amounts, starting college in        2014-15 and graduating in four years

Scenario Amount entering repayment  Total payments over 10 overs Total interest paid over 10 years
Based on current CBO FY projections for 10-Yr T-Note yields  $28,100  $37,150  $10,150
If 10-Yr T-Note yields increase by 50 BPs  $28,200  $38,150  $11,150
 Difference from current projections ($)  $100  $1,000  $1,000
 Difference from current projections (%)  0%  3%  10%
If 10-Yr T-Note yields increase by 100 BPs  $28,300  $39,150  $12,150
  Difference from current projections ($)  $200  $2,000  $2,000
  Difference from current projections (%)  1%  5%  20%


Graduate borrower taking out annual maximum unsubsidized Stafford loan amounts, starting college in 2014-15 and graduating in two years

Scenario Amount entering repayment Total payments over 25 overs Total interest paid over 25 years
Based on current CBO FY projections for 10-Yr T-Note yields  $45,100  $91,100  $50,100
If 10-Yr T-Note yields increase by 50 BPs  $45,450  $96,050  $55,050
 Difference from current projections ($)  $350  $4,950  $4,950
 Difference from current projections (%)  1% 5%  10%
If 10-Yr T-Note yields increase by 100 BPs  $45,750  $101,150  $60,150
  Difference from current projections ($)  $650  $10,050  $10,050
  Difference from current projections (%)  1% 11%  20%

Calculations by TICAS based on February 2013 CBO fiscal year projections of 10-Year Treasury Note yields from "The Budget and Economic Outlook: Fiscal Years 2013-2023,” The dependent undergraduate student takes out a total of $27,000 in Stafford loans ($19,000 subsidized and $8,000 unsubsidized) and the graduate student takes out a total of $41,000 in unsubsidized Stafford loans. Figures in the table are rounded to the nearest $50 and 1%.Pauline Abernathy, Diane Cheng and Jessica Thompson

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The nonpartisan Congressional Budget Office (CBO) recently released a report that explores the growth in the Pell Grant program between 2006-07 and 2010-11, citing factors such as the economic downturn and legislated policy changes. We are planning to dig deeper into the CBO’s analysis over the coming weeks, but wanted to highlight one important point in the report.

Although the cost of the Pell Grant program increased substantially between 2006-07 and 2010-11, that pace of growth is not expected to continue. In fact, CBO projects almost no annual growth in Pell Grant program costs between 2012-13 and 2023-24, after adjusting for inflation. Over that entire 11-year period, the program’s costs are only projected to increase by 1% in real terms.

It’s clearly time for policymakers to stop asking whether Pell Grants are sustainable and focus instead on whether they’re sufficient. Even after recent increases, the maximum grant covers the smallest share of the cost of attending a four-year public college since the start of the program. Pell Grant recipients are more than twice as likely as other students to have to borrow to pay for college. The CBO data drive home the need for a comprehensive approach to financial aid and higher education policy, so that all students who are willing to study hard can afford to go to college and graduate.

For more information about Pell Grants, please visit TICAS’ Pell Grant Resource Page: For TICAS’ recommendations for increasing the effectiveness of Pell Grants, see our white paper at  

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Both the President’s FY14 Budget and the Comprehensive Student Loan Protection Act, reintroduced in the Senate this week, propose significant changes to federal student loan interest rates. Rather than being set by Congress, interest rates on new student loans would be tied to the U.S. Treasury’s 10-year borrowing rate that year and remain fixed for the life of the loan, even if interest rates dropped substantially. Though not identical in their details, both proposals would lower the interest rates for students and families who borrow this fall, but allow interest rates to rise steeply for those who borrow in the coming years. Based on CBO projections, interest rates for unsubsidized Stafford loans would exceed 6.8% by 2016 and rise above 8% by 2018.

Moreover, both proposals would eliminate the cap on student loan interest rates, which means that actual rates for all types of federal student loans could rise even higher than currently projected. For the first time ever, there would be no limit to how high rates could go. In addition to increasing the costs of loans and college, uncapped interest rates could deter students from enrolling in or completing college, particularly during periods of high and/or rising interest rates.

Some have suggested that an interest rate cap is not necessary if borrowers have access to an income-driven repayment plan, such as Income-Based Repayment (IBR) or Pay As You Earn (PAYE). In IBR, which is widely available, monthly payments are capped at 15% of discretionary income, and after 25 years of qualifying payments any remaining debt is discharged. In PAYE, currently only available to some current students and recent graduates, monthly payments are capped at 10% of discretionary income, and any remaining debt is discharged after 20 years. New borrowers in 2014 will have access to a similar repayment plan. The President’s budget goes a step further by providing access to existing as well as new borrowers starting in 2014. It also prevents the taxation of debt discharged through income-driven plans.

Although these programs can help keep monthly payments manageable, income-driven repayment plans are no substitute for a cap on interest rates.  First, under current law, not all federal loans or loan borrowers are eligible for an income-driven repayment plan. 

For example, to qualify for IBR or PAYE, borrowers must have a relatively high debt-to-income ratio. Second, even borrowers who qualify for IBR or PAYE can have to pay much more in total with higher-interest-rate loans. In income-driven repayment plans, the interest rate can affect both the monthly payment amount as well as the length of time in repayment. For example, a single borrower who enters repayment with $20,000 in debt and starts out making $30,000 a year (AGI increasing 4% a year) ends up paying much more in PAYE with a higher interest rate than a lower interest rate.

  • An interest rate of 6.8% rather than 3.4% would increase the borrower’s total cost by about $12,000.
  • An interest rate of 8.0% rather than 3.4% would increase the borrower’s total cost by about $19,000.

Comprehensive reform is needed to keep federal loans affordable over time, streamline the program, and better target benefits, but these recent proposals miss those marks. There is a better way forward. TICAS’ recent white paper proposes changes that keep loans affordable, simplify loans, and target benefits to those with more financial need. Our proposal includes both a universal interest rate cap and a guarantee that rates for borrowers in repayment will never be too much higher than the rates being offered to current students. As also detailed in our white paper, the benefits of the improved IBR plan should be targeted so that borrowers with very high incomes do not receive substantial forgiveness when they could well afford to pay more. Read our statement about the President’s FY14 Budget and our white paper on improving federal student aid to increase college access and success. 

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Consumers, policymakers, and researchers all need user-friendly access to meaningful financial aid data – data that can deepen our understanding of important issues and inform decision-making at all levels. A recent report from the National Postsecondary Education Cooperative (NPEC) provides important, actionable suggestions for how to improve federal data on this topic.

The report presents the findings and recommendations of NPEC’s Working Group on Financial Aid Data, chaired by Matthew Reed of TICAS. The group brought together leading financial aid researchers and practitioners as well as representatives of all sectors of higher education and the National Center for Education Statistics (NCES).

Here’s the TICAS take on some particularly important suggestions:

Adopt common identifiers for colleges across all data sets. Different agencies within the U.S. Department of Education use different codes used to identify colleges and branch campuses. In addition, some track data for each campus, while others group related campuses together. This makes it difficult to bring together data on financial aid, enrollment, and student success from different sources to look at a variety of student outcomes at the college level. It can also lead to incomplete or misleading information for consumers. For example, a student using the FAFSA to apply for aid at the University of Phoenix will only see tuition and fees, net price, and graduation rates for one specific campus in Arizona, where less than two percent of the university’s students attend. Until common identifiers are established, the Department should provide tools to help researchers connect the different data sets.

Collect and disseminate college-level data on debt at graduation and private (non-federal) loans. As student debt levels continue to rise, both consumers and policymakers need timely information about student borrowing. Prospective students should be able to see average debt at graduation for whatever colleges they are considering, not just those that happen to report it voluntarily. In addition, borrowers and colleges should be able to see all of a student’s loans, federal and private, in one place.

As TICAS has long recommended, the NPEC report suggests that the Department make incremental changes its annual survey of colleges to collect information on cumulative debt and on private loan borrowing for all undergraduates. We have also long called for the Department to track private as well as federal student loans in its student loan database, which is ultimately the best way to provide accurate and comprehensive data on these topics. TICAS continues to urge the Department of Education to make these short-term and long-term changes, including working with the Consumer Financial Protection Bureau (CFPB) to ensure the collection of comprehensive private loan data from lenders.

Provide more detailed loan volume data. Currently, the available college-level data on federal loan usage makes it very difficult to estimate the number of undergraduates using federal student loans at each college, their use of unsubsidized versus subsidized Stafford loans, or the average amount they borrowed. As the report recommends, providing separate figures for undergraduate and graduate students, as well as for all Stafford recipients, would paint a much clearer picture of federal loan borrowing patterns.

Improve access to and analysis of data already in the federal student loan database. The Department’s student loan database contains a wealth of information about financial aid, but it is currently underutilized. The legislation authorizing this database directs the Department to use it in part for research and policy analysis, but it has only done so on a very limited basis. The report recommends increased collaboration between the operational and analytical agencies within the Department so that more data are analyzed and made publicly available, enhancing understanding of student borrowing patterns and informing better decision-making at all levels.

We encourage those interested in financial aid data and trends to read the report and share any feedback with Archie Cubarrubia of the Department of Education.

For examples of existing data on financial aid as well as other affordability and diversity information at the college, state, and national levels, visit College InSight.

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Some community colleges and for-profit colleges have expressed concerns that their students borrow more than they really need in federal loans. We looked into available data and found no evidence that “over-borrowing” is a problem at either community colleges or for-profit colleges. Read our fact sheets dispelling the “over-borrowing” myth at community colleges and for-profit colleges.  

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