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

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Oliveira, A. (2026, September 18). Hundreds of colleges where up to 80% of students fail to pay their loans — sticking taxpayers with the bill. New York Post. https://nypost.com/2026/09/18/us-news/hundreds-of-colleges-where-up-to-80-of-students-default-on-loans/

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New York Post · collected 2026-09-18 · by Alex Oliveira

Quick Summary

A new NPR report reveals that at least 500 colleges and universities in the U.S. have student loan nonpayment rates of at least 40%, with some reaching as high as 70-80%. These figures disproportionately affect private, for-profit vocational schools, where federal loans often account for over two-thirds of revenue. For example, Diversified Vocational College in Los Angeles had a default rate of 73% for the 2024-25 school year, with student loans making up nearly 90% of its income. The report questions why the government continues to fund these institutions despite high repayment failures and suggests that federal oversight needs to be stricter regarding both schools and students who rely heavily on federal aid.
Written by AI on 2026-09-18, from this article's own text only (the story summary below draws on all the coverage).

AI analysis

Story summary

Hundreds of colleges, at least 500, across the U.S. have student loan default rates exceeding 40%, with some institutions like Construction Training Center in South Carolina and Legends Barber College in Texas reporting nonpayment rates as high as 70-80%. A new NPR analysis reveals that these schools rely heavily on federal loans, which account for more than two-thirds of their revenue streams. For instance, at Diversified Vocational College in Los Angeles, 73% of students defaulted on their federal loans in the 2024-2025 academic year, while $3.5 million in federal loans made up nearly 90% of the school's revenue for that period. The majority of these struggling schools are private, for-profit institutions focused on vocational training. Critics argue that such high default rates should prompt lenders to reconsider funding these institutions, but government support continues despite poor repayment histories.

Written for “Student Loan Defaults Crisis” on 2026-11-03, grounded in this article and the 0 other(s) covering the same event.

Story

📰 Student Loan Defaults Crisis
Education · 1 article(s) covering the same event.

Compared with similar articles

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How this article was measured signals, leaning charts, publisher record, byline, topics and claims

Signals How these are calculated →

Claims extracted
22
sentences that state something as happening or true
Uncertain
14%
3 of 22 hedged ("reportedly", "may", "according to")
Leaning
withheld
no quote in the article backed the model's score
Publisher signals
66/100
New York Post's corrections and hedging, across everything collected from it. Not a measure of accuracy.
Outlets on this story
1
Education
Same framing elsewhere
1
articles that frame the event the way this one does
Analyzed 2026-09-18 · how these are computed

How this is being covered How these are calculated →

Article leaning vs. publisher reliability
Source leaning vs. consistency

Publisher

New York Post · 16405 article(s) · 35 correction(s) detected
Running correction rate · 35 correction(s)

Who wrote this

Alex Oliveira
57 article(s) here · 1 carrying a prediction
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🔮 “This is a situation you created and that you could have completely avoided.”
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🔮 Mayor Zohran Mamdani stumped with Gov. Kathy Hochul for the first time Friday — hoping to give the moderate Democrat a boost with his lefty base in New York City less than two weeks before Election Day.
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Also by Alex Oliveira
Nothing else under this byline is closely related to this article, so these are simply their most recent.
All 57 articles by Alex Oliveira →

Topics

Construction Training Center Diversified Vocational College Legends Barber College NPR South Carolina

Subjects

Diversified Vocational College ORG · 3× NPR ORG · 3× Construction Training Center ORG · 1× Legends Barber College ORG · 1× Los Angeles GPE · 1× Preston Cooper PERSON · 1× South Carolina GPE · 1× Texas GPE · 1× the American Enterprise Institute’s ORG · 1× the US Education Department ORG · 1×

Narrative

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.
framing: assertive · carried by 1 article(s) · first seen 2026-09-18
🔮 “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 Cooper, who studies the finances of higher education.

Claims (22 extracted, 3 hedged)

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. uncertain
schools → be → bill
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. asserted
analysis → have → NPR
And the taxpayer-backed cash is keeping the small schools afloat, accounting for more than two-thirds of the institutions’ entire revenue streams. asserted
cash → back → 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. asserted
million → take → 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. asserted
who → mean → government
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. asserted
majority → specialize → training
They accounted for 424 of the 500 schools with nonpayment rates over 40%, data from the US Education Department showed. asserted
data → account → Department
Public schools accounted for just 15 on the list, while 61 were private non-profits. asserted
61 → account → list
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. asserted
they → mean → 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 Cooper, who studies the finances of higher education. asserted
who → look → education
“Why does it make sense for the federal government and for taxpayers?” he added. asserted
he → make → taxpayers
Part of what is driving the problem appeared to be what the schools teach — the vast majority of the 500 schools specialized in trades that tend to pull on lower-wealth demographics, and train them for industries that don’t often lead to high-paying jobs. asserted
that → drive → jobs
Barber and hairstylist schools dominated the list, as did trade schools for construction and healthcare aid jobs. asserted
schools → dominate → jobs
Confusion over the loan process — deepened during pandemic-era suspensions, and President Biden’s mass loan forgiveness promises — have also complicated the situation in recent years, according to NPR. uncertain
Confusion → deepen → NPR
But the accountability largely lies on the federal government to not only enforce repayments from students — but also to be more strict with the schools they’re attending, according to experts. uncertain
they → lie → experts
Start your day with all you need to know Morning Report delivers the latest news, videos, photos and more. asserted
Report → start → news
“If the federal student loan program did not exist, these schools would not exist,” the Project on Predatory Student Lending’s executive director Eileen Connor told NPR. asserted
director → exist → NPR
“Why would any bank give or lend money to someone to go to these schools when it’s a near certainty that they’re not going to be able to repay it?” asserted
they → give → it
Connor called giving such student loans was “is the definition of predatory lending.” asserted
Connor → call → lending
The federal government has moved to crackdown on the situation, with President Trump’s One Big Beautiful Bill introducing measures to restrict federal funding from schools which can’t demonstrate that its students earn more than people in their industry without degrees. asserted
students → move → degrees
“Institutions cannot benefit from taxpayer dollars while ignoring the fact that a significant share of their students are not well-prepared to repay their loans,” the Department of Education said in a statement. asserted
Department → benefit → statement
“It’s time for institutions to step up or risk losing access to federal student aid.” asserted
institutions → ’ → aid
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