A study released Thursday by a Washington, D.C., think tank found the rise in student loan delinquency and default rates was concentrated among borrowers who went to for-profit schools and community colleges.
The University of Phoenix, Phoenix campus was the number one recipient of student loan money, according to the study. In 2014, the for-profit college received more than $35 billion of borrowed money earning it the number one spot on the list.
To put that into perspective, in 2000 the University of Phoenix received slightly more than $2 billion dollars. The study, which was released by the Brookings Papers on Economic Activity, used data from the National Student Loan data base and tax records of 4 million borrowers. What they found was striking, even when compared to a public university.
At Arizona State University, they found that 17 percent of people were in default five years later. Compared with the University of Phoenix, 45 percent were in default five years later.
David Wessel, the Director of the Hudson Center on Fiscal and Monetary Policy at Brookings said the borrowing and default trends aren’t likely to continue, especially since the government has started cracking down on many for-profit institutions. For example, Corinthian Colleges abruptly shut its doors earlier this year.
