Eileen Connor, president and director of the Project on Predatory Student Lending, a nonprofit that reviewed the data, told NPR the numbers are “really jaw-dropping.” For comparison, the article states, average nonpayment rates at public and private, nonprofit colleges hovers around 15%.
The findings are based on an analysis of repayment rates for 17 million borrowers who started paying their loans back between January 2020 and May 2025. At many of the listed schools, more than half of recent borrowers have fallen at least three months behind on their payments or have defaulted due to being nine months behind, NPR found.
The revelations of low repayment rates at the 500 schools in question comes as the Trump administration speaks of weeding out weak schools with large numbers of student borrowers who aren’t repaying their loans.
Nicholas Kent, Under Secretary of Education, issued a statement in February that called on institutions to “do more to support successful loan repayment outcomes.”
“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,” Kent stated. “It’s time for institutions to step up or risk losing access to federal student aid.”
An institution may lose eligibility to participate in the federal student aid programs if its Cohort Default Rate – or CRD – is 30 percent or higher for three straight years, the Education Department states. A school may also lose eligibility to participate in the Direct Loan program if its CDR is 40 percent or higher for its most recent cohort fiscal year.
A new “do no harm” regulation holds institutions accountable for earnings of former students. In short, the new regulation states that graduates’ median earnings must be at least as much as that of working adults aged 25-34 who only earned a high school diploma. The rule takes full effect July 1, 2027.
One law firm says the rule represents “one of the most significant regulatory developments in federal accountability for higher education in decades.”
“While the general effective date of July 1, 2027, provides some runway for preparation, it is still anticipated that the first failing program rates will be released in 2027 with the first loss of Direct Loan eligibility occurring in 2028,” the law firm states.
Jamaal Abdul-Alim is a longtime education writer who resides in Washington, D.C. He occasionally teaches journalism and has completed fellowships at the University of Michigan, Columbia University and New America.
