This issue brief details how for-profit schools work with third-party companies to skirt accountability requirements designed to protect borrowers who attended schools with high default rates. A growing body of evidence shows that these companies manipulate schools’ student loan default rate, a metric known as cohort default rate (CDR), by driving borrowers into forbearance—a short-term repayment option that increases loan costs and is often a precursor to long-term financial hardship.
The brief provides detailed recommendations for how the Biden administration can strengthen accountability for schools and companies in order to protect borrowers.
Read the Blog: A Shadowy Industry Manipulates Student Loan Borrowers’ Default Rates—It’s Time to Stop these Practices