Students at 19 Michigan colleges and community colleges are enrolled in schools where borrowers are likelier to default on a loan than full-time freshmen are to graduate, an analysis of federal data shows.
Two Michigan community colleges challenged the report, saying the numbers are inaccurate and misleading.
In a new report, “In Debt and In the Dark,” the Education Sector identified 514 of what it calls “red-flag colleges,” schools where the percentage of borrowers who started repaying loans in 2009 and had defaulted by 2012 was higher than the school graduation rate. A look at the report by USA TODAY focused on 265 of the 2,711 colleges where at least 30% of students borrow.
Nationwide, nearly half the schools that meet that criteria are operated by for-profit colleges, the data show. About one-third are public community colleges. In Michigan, nine of the 19 schools cited in the report are community colleges, including Henry Ford Community College and Wayne County Community College District.
Seven of the Michigan schools are various branches of Baker College, including those in Allen Park, Auburn Hills and Clinton Township. The Metro Detroit campus of the University of Phoenix is also on the list. Baker College did not respond to several calls seeking comment.
“These colleges should set off a red flag in the minds of prospective student borrowers — and their parents,” said Andrew Gillen, research director for Education Sector, a nonprofit, nonpartisan think tank on education policy that gathered the federal data. “Many students at these colleges will, no doubt, take out loans, graduate and get good jobs. But the high default rates and lower graduation rates suggest that many will not.”
WCCCD said the 7% graduation rate cited in the study is inaccurate and is actually between 28% and 29%.
“WCCCD is the largest urban community college in Michigan and one of the largest urban community colleges in the nation,” Chancellor Curtis Ivery said in a statement. “More than 80% of our students are on some form of financial aid. This is the highest number of students on financial aid in an educational institution in the state. To compare our numbers with any other institution is disproportionate and misleading. Over the past five years, our students have experienced the most drastic circumstances in our lifetime. Our mission is to serve the people of Wayne County with higher educational opportunities that help improve their lives. Our graduation rates reflect our success.”
Henry Ford Community College said using the federal graduation measure, which calls for community college students to complete their degrees in three years, isn’t a fair measurement.
“Our students often follow a different path to graduation and completion of their goals,” the college said in a statement. “Many transfer to four-year colleges and universities and, if this data is added to the picture, the completion rate for Henry Ford Community College is 37%. Most of our students attend part time because they must work and raise . ...
“Our students take five years or longer to complete their degree, not three years. At five years, the graduation rate plus the transfer rate is nearly 50%. Measures have been put in place to the default rate, including tightening the admission process. However, it will take a few years before we’ll see the impact.”
The Education Sector analysis, a snapshot of data from the U.S. Department of Education, looks at U.S. colleges where at least 100 borrowers started repaying loans in 2009 and the equivalent of at least 250 full-time students were enrolled in the 2009-10 academic year, the latest year for which complete data are available.
The flagged schools are in 40 states, the District of Columbia and Puerto Rico. The analysis comes as Congress decides whether to intervene to stop interest rates on new federally subsidized student loans from doubling.
Leaders of community and for-profit colleges have long argued that graduation and default rates have more to do with the challenges faced by their students, who are among the neediest and most likely to struggle academically, than with the quality of their institutions. Also, each number counts different populations and applies only to subsets of students — those who borrow and those who began attending the college as first-time, full-time students.
Nevertheless, the two data sets are the federal government’s “best estimate” for identifying and holding accountable schools that are eligible to receive federal student aid, Gillen said.