With many students defaulting on federal loans, two for-profit educators, Corinthian Colleges and Kaplan will deny enrollment to high school drop-outs who pass a basic-skills test known as an “ability to benefit” test, reports the Chronicle of Higher Education.
Kaplan discontinued the tests last year at some institutions citing poor student performance. Corinthian announced it will drop the tests because “ability to benefit” students default on their loans at twice the rate of other students.
Starting in 2014, “the Education Department will hold colleges accountable for defaults of student cohorts for three years after the students graduate or leave college, a year longer than under current law,” reports the Chronicle of Higher Education.
About 15 percent of Corinthian’s students in the last academic year used the ability-to-benefit test. The company, which operates more than 100 campuses across North America, estimates it will lose 16,000 potential students and about $120-million in the next fiscal year as a result of this decision, but it will also lose the risk of higher default rates those students would bring. The 15-percent enrollment of ability-to-benefit students was a decrease from 24 percent the previous year, credited to a greater focus on default management at Corinthian, as well as the growth of its online division, which does not enroll such students.
If colleges can’t help ability-to-benefit students succeed, it’s not far to load them up with debt, said Deborah Cochrane, program director at the Institute for College Access and Success.
Last year, a GAO report found “testing officials at a for-profit college helped students cheat on an ability-to-benefit test, the Chronicle reports. The Education Department said it would strengthen monitoring.
People who’ve failed to complete high school or a GED are likely to be weak in persistence as well as reading and math skills. If they’re cut off from for-profit options, they can try adult education or community colleges: Their success rate will be low at lower cost.