In todays WSJ.
http://www.wsj.com/articles/obamas-student-loan-fiasco-1485126310
If you can’t get by the paywall.
https://www.nasfaa.org/news-item/11001/Opinion_Obama_s_Student-Loan_Fiasco
In early January the department disclosed that it had discovered a ‘coding error’ that incorrectly computed College Scorecard repayment rates—that is, the percentage of borrowers who haven’t defaulted and have repaid at least one dollar of their loan principal. The department says the error ‘led to the undercounting of some borrowers who had not reduced their loan balances by at least one dollar.’
The department played down the mistake, but the new average three-year repayment rate has declined by 20 percentage points to 46%. This is huge. It means that fewer than half of undergraduate borrowers at the average college are paying down their debt.
… The other scandal is that the Obama Administration used the inflated Scorecard repayment data as a pretext to single out for-profit colleges for punitive regulation. The punishment was tucked into a rule finalized in October allowing borrowers who claim their college defrauded them to discharge their debt. It requires for-profits in which 50% or fewer borrowers are paying down their principal to post the equivalent of a surgeon general’s warning in all promotional materials.
Another article on the issue from Inside Higher Ed.
https://www.insidehighered.com/news/2017/01/16/feds-data-error-inflated-loan-repayment-rates-college-scorecard
The Scorecard’s repayment rates, however, offered a distorted picture before the newly made fix. Several experts who crunched the numbers found a roughly 20 percentage point decline in the overall national rate.
“It turns out that the changes in loan repayment rates are very large,” Robert Kelchen, an assistant professor of higher education at Seton Hall University, wrote on his blog. “Three-year repayment rates fell from 61 percent to 41 percent; five-year repayment rates fell from 61 percent to 47 percent; and seven-year repayment rates fell from 66 percent to 57 percent. These changes were quite similar across sectors.”
So if a student has paid “a dollar” they’re counted as good?
The coding error and associated serious undercounting of defaults is an embarrassing error with real policy implications.
That said, the WSJ opinion piece is - not suprisingly - 100% wrong. Even with the corrected data - the repayment rates at for-profit institutions are by far the worst - I mean absolute garbage. It is depressing that there are still people out there defending the fraudulent diploma mills.
Apparently so. From the original announcement by the Department of Education:
https://ifap.ed.gov/eannouncements/011317UpdatedDataForCollegeScorecardFinaidShopSheet.html
Repayment rates measure the percentage of undergraduate borrowers who have not defaulted and who have repaid at least one dollar of their principal balance over a certain period of time (1, 3, 5, or 7 years after entering repayment). An error in the original college scorecard coding to calculate repayment rates led to the undercounting of some borrowers who had not reduced their loan balances by at least one dollar, and therefore inflated repayment rates for most institutions.
So, kept up with the interest payments, and paid down at least $1 of principal.
Keep in mind, that the original proposal, was to hold Public/Private/Non-profit/for-profit schools accountable for their results on the “College Scorecard”.