The Department of Education released new data last Friday demonstrating that loan repayments are significantly lower than had been previously assumed or expected. This is of particular concern to for-profit schools who must demonstrate a repayment rate of at least 45% to continue their respective financial aid programs' eligibility for federal student aid under the department's proposed new Gainful Employment regulations.
While there's certainly a lot to digest and the various parties with a stake in the outcome of the Department of Education's proposed new regulatory scheme have already begun to dispute the Department's approach, one undeniable fact can be gleaned from these numbers: student loan default rates are much greater than had previously been reported.
