Poor Odds « The Quick and the Ed

Poor Odds

While Ben provides an in-depth look at the recently released three-year cohort default rates, here’s another way to look at the numbers:

At 400 colleges, students have better odds of defaulting on their student loans than they do of graduating.

Some may argue that statements like this unfairly target schools serving low-income students, but they’re wrong. No one expects a community college serving mostly first-generation college students to have the same default rate as Harvard, but it is not unreasonable to expect students’ and taxpayers’ investments in tuition, grant and loan money to result in more positive returns than losses.

And it’s not all bad news. The three-year default rates have highlighted a problem that was already there–now that it’s out in the open and colleges are paying attention, they can do something about it. And there is a lot that colleges can do–an upcoming report from Ed Sector, due to be released early next year, will provide concrete strategies from institutions that have successfully lowered their default rates in the past. Strategies include better loan counseling, more contact with students, and the best strategy of all: improving student retention and graduation rates.

Default rates are a blunt measure of student success, but they’re the only measure we have right now with any real consequences. The more colleges that take their default rates seriously, the more students we’ll see earn degrees and get a positive return on their educational investment.

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