Hundreds of colleges where up to 80% of students fail to pay their loans sticking taxpayers with the bill

There are at least 500 colleges and universities across the country where at least 40% of students fail to pay their federal student loans, according to a new report — sticking US taxpayers with the bill while the schools cash out.Some schools — like Construction Training Center in South Carolina, Legends Barber College in Texas — have nonpayment rates of 70-80%, a new analysis from NPR found.And the taxpayer-backed cash is keeping the small schools afloat, accounting for more than two-thirds of the institutions’ entire revenue streams.At Diversified Vocational College in Los Angeles, for example, 73% of students taking federal loans defaulted on payments for the 2024-2025 school year — while students’ $3.5 million in federal loans that year accounted for nearly 90% of the school’s revenue.That means nearly three-quarters of Diversified Vocational College students paid tuition with federal money, who then went more than three months without paying the government back.And the overwhelming majority of the schools with the worst nonpayment rates were similar to Diversified Vocational College — private, for-profit schools specializing in vocational training.They accounted for 424 of the 500 schools with nonpayment rates over 40%, data from the US Education Department showed.Public schools accounted for just 15 on the list, while 61 were private non-profits.

The average federal loan non-repayment rate at all schools nationwide, meanwhile, was only about 15%.Those shocking numbers mean many of the 500 schools on the list are depending on federal loans to keep the lights on — which has left education experts scratching their heads at why the government keeps handing out loans to students who say they’re headed for these schools.“If a private lender were looking at a school that has a 40%, 50% delinquency rate on past loans, they would probably say, ‘We’re not going to lend to that school,'” said the American Enterprise Institute’s Preston Coo...