Five-hundred colleges and universities in the U.S.now share one alarming distinction: At least 40% of recent students who borrowed federal loans aren't paying them back.
That's according to the latest federal nonpayment-rate data published by the U.S.Education Department.The data looks at the roughly 17 million borrowers who entered repayment for the first time between January 2020 and May 2025."These numbers are really jaw-dropping," says Eileen Connor, head of the Project on Predatory Student Lending, a nonprofit that advocates for borrowers and that reviewed the data.At many schools, more than half of recent borrowers are at least three months late on their payments or have already passed nine months, which means they're in default.What's going on?One explanation is that pandemic-driven disruptions to the student loan system have left many borrowers feeling confused.
But Lisa Collenbaugh's story offers another possibility: Many of these troubled schools charge too much for too little — and aren't being held accountable.Collenbaugh enrolled in one school on the list, UEI College, more than a decade ago, agreeing to pay nearly $20,000 for a short-term training program to become a computer systems technician.But she says the program didn't deliver the life-changing skills she had hoped for.
"I thought that I was gonna actually be prepared for a career path and my life was gonna change because of that.And looking back, it's like, 'Oh, they got me.'"With rising public fear over student debt — as well as skepticism about the value of higher education — this data shines a hot light on hundreds of mostly for-profit schools where something is clearly not working.Loading...The new data isn't just worrying for borrowers — it's also bad news for taxpayers.
That's because many of these schools don't just benefit from federal student aid; they depend on it.Preston Cooper, who studies higher education at the conservative-leaning American Enterprise Institute, says t...