Recommended Reading: Guess Which Schools and Degrees Produce the Most Student Loan Defaults? Hint: It’s Not the Humanities

There’s a lot of talk in the news this week about the number of people defaulting on student loans. We’re told that the student loan crises is due almost entirely to students taking out loans to go to liberal arts schools to learn “useless” things like literature or sociology. We’re also told that the loan crises could be solved by telling potential liberal arts students to eschew advanced education for a job in a trade, but data tells us that narrative couldn’t be further from the truth. Yves Smith writing for Naked Capitalism:

Looking at the top-ten by default rate, it doesn’t take a PhD in data science to recognize some patterns. Nine of the ten are beauty schools. Of the nine the Rob Roy Academy, appears twice, representing two different schools. Rob Roy is also in fifteenth place taking a full one-third of the top slots for the fifteen highest school default rates. The one school not in the top-ten that is not a beauty school is a tribal school, probably struggling with first-generation students.


At the other end of the list there is a heavy grouping of medical schools, theology seminaries, and prominent business schools, all with a default rate of zero. Cornell and Harvard are one slot apart, at 4,555 and 4,556 respectively, with a default rate of .7%.


Let’s briefly dive into one of these businesses (err, schools). I chose to lookup Cheryl Fell’s School of Business because, honestly, the name is ridiculous.


In 2014 there were apparently 71 students enrolled plus 84 students in repayment and 19 in default, a default rate of 22.6 percent. This puts them at number 389 on the list, sandwiched right between Lil Lou’s Beauty and Barber College LLC and the Olympian Academy of Cosmetology (no, I’m not making this up). There are three Paul Mitchell schools with higher default rates.

Cheryl offers four programs: Accounting Assistant, Administrative Assistant/Accounting, Medical Receptionist, and Medical Secretary. The instructional hours required are 900, 1,500, 900, and 1,500 respectively. Fees are $8,500, $14,100, $8,500, and $14,100. Classes include, among other things, “Keyboarding” I, II, III, and IV.

These “Academic Programs” lie at the heart of the student loan program. Basic typing and computer literacy skills are likely necessary for these jobs but, judging by the ages of the people hanging outside the school, they’re likely to know how to operate web-based software. They can probably type just fine but if they can’t then Google returns 11.3 million entries for “free online typing class.”

Reiterating, there’s nothing more wrong with Cheryl’s business school than any other similar program but none of them should be eligible for federal student funds. Nobody should take out a loan for a degree to be a receptionist. Even if the tuition were free, which it isn’t, the 900 hours is at least 860 more than necessary. Any reputable medical office will allow for a week of on the job training for a promising job candidate. Paul Mitchell, with a personal fortune of $3.1 billion, can guarantee dischargeable loans to his cosmetology schools if he’s confident the students are receiving a valuable education and can pay him back.

Honestly, this should be required reading. Obviously, beyond the type and field of education discussed in the article there is a strong need for a discussion surrounding class and economics. The socioeconomic class being targeted by these cosmetology and business programs are targeted for a reason. What’s truly sad is that these people are taking on an education and the loans that come with it in hopes of bettering their economic situation, instead they are simply  pawns in yet another manifestation of the grifter economy (see also, payday loans).

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