It’s not a good start to the year of the rabbit for for-profit colleges, or any colleges that care about the new 3-year default rate measure. The 2008 3-year cohort default rate data released by the Department of Education today shows that three-year default rates have increased across the board, and most rapidly among for-profit colleges.
Below is the summary from the Department of Education, comparing the 2-year CDR’s for the 2008 cohort with the 3-year CDR’s for the same group of students. The overall default rate nearly doubles, from 7 percent* to 13.8 percent with the change from a two-year to a three-year calculation. Increases were highest in the for-profit sector, where default rates more than doubled with the added year – from 11.6% to 25%.
The 2008 3-year cohort default rate also increased by two percent from 2007′s CDR, from an average of 11.8 percent to 13.8 percent. As the chart below shows, this continues four years of increases in the three-year default rate.
More to come on this as we dig through the new data.
*The original Department of Education release showed the FY2008 CDR as 6.7%, but that’s actually the 07 CDR. I’ve corrected the FY08 CDR to 7%.