Nearly one in three students of The Washington Post’s embattled education unit default on their student loans within three years, according to data from the U.S. Department of Education.
Kaplan University’s 30 percent default rate jumped from last year’s 23.2 percent and placed Kaplan well above the 25 percent average for all for-profit colleges — more than three times the rate at private, nonprofit colleges — as the federal government investigates for-profit schools.
Of Kaplan’s 2009 graduates, 4,038 failed to make their payments on time within two years, for a 17.2 percent rate, up from last year’s 13.3 percent.
The University of Phoenix, the largest for-profit, had a 22.77 percent default rate over three years, while Corinthian Colleges’ Everest Institute in Texas climbed to 58 percent.
The federal government is moving to three-year rates, but will continue to supply two-year rates through fiscal 2011, in accordance with 2008’s Higher Education Opportunity Act.
The Department of Education proposed strict regulations in the fall after a federal probe of for-profits discovered low graduation rates, misleading recruitment practices and, in some cases, encouragement to forge federal aid applications to qualify for Pell Grants. For-profits received $24 billion in federal loans and grants last year.
Kaplan University is a wing of the Post’s Kaplan Higher Education unit, which laid off 770 employees, or 5 percent of its work force, as enrollment slowed in December. Kaplan generated 58 percent — or $1.5 billion — of the Washinton Post Co.’s revenues in 2009.
A spokesman for the company said the layoffs were not connected to litigation pending against Kaplan and other for-profit colleges.
A petition started several weeks ago by 25 former Kaplan students to shut down the for-profit school has exceeded 12,000 signatures. “More and more former Kaplan students are coming forward with horror stories about the bogus classes, surprise fees and deceptive policies they encountered as they struggled to achieve the American dream,” reads the petition, which is posted on Change.org.
Washington Post Co. spokesman Ron Iori said Change.org inflated the petition’s number of signers by issuing a news release and soliciting via e-mail without verifying the signers’ connection, if any, to Kaplan.
“It is unlikely that many of these signers are actually students,” he said in an e-mailed statement.
