Illinois universities exceed student loan repayment average, but Chicago City Colleges lag behind
Only 22 percent of students who attended City Colleges of Chicago (CCC) schools are repaying their student loans, compared to 66 percent of student loan recipients at other Illinois public universities.
Students at universities that are part of the Illinois Board of Higher Education (IBHE) repay their loans at about 20 percentage points over the national average of 46 percent, but CCC students are more than 20 percentage points below, according to new data made public by the U.S. Department of Education.
IBHE schools include University of Illinois at Urbana/Champaign, Chicago and Springfield; Eastern, Southern and Western Illinois Universities; and six others. CCC is comprised of seven schools including Malcolm X College and Harold Washington College.
The overall 22 percent repayment rate for Chicago’s higher education system ranges from a low of 10 percent for Olive-Harvey College to a high of 45 percent for Richard J. Daley College. All seven CCC colleges are below the national average of 46 percent, while only two of 12 state universities are.
The U.S. Department of Education maintains its “College Scorecard,” an online tool that displays key data points for consumers to use to compare higher education institutions. Among other information, the data includes tuition cost, graduation rates, average salary for graduates and repayment rates among student loan borrowers.
To be considered as someone who is repaying a loan, the borrower must not have defaulted and must have repaid at least one dollar of loan principal.
In January, the Obama administration reported that a “coding error” resulted in incorrect repayment rates being posted for public nonprofit institutions. As a result of its revised calculations, the Department of Education announced a repayment rate among these institutions 20 percentage points lower than had been previously reported.
As a result, its new national average three-year repayment rate dropped from 66 to 46 percent.
Under the previous administration, the unadjusted figures were used to require for-profit educational institutions which had a less-than-50 percent repayment rate to issue a warning to prospective students in all their marketing materials.
“A record of overpriced education, crippling student loans and suspect diplomas are not only catching up with the worst for-profit schools, they are casting doubt on the better schools,” Sen. Dick Durbin (D-IL) said in a statement at the time the rule was issued.
However, the “coding error” did not apply to for-profit schools and their repayment rates remain unchanged. The new data reveal that the performance among for-profits is not significantly different than that of nonprofit public institutions, which were not required to make the same warning to prospective students as for-profit ones.
This disparity has raised the skepticism of higher education watchdogs.
“Through manipulation of facts presented by the Department of Education, the public has been provided false impressions of outcomes and performance metrics for all institutions of higher education,” Mary Lyn Hammer, CEO at Champion College Services, said.
The revised data also reveal that nearly all Historically Black Colleges and Universities have repayment rates below 50 percent. This is also true for CCC, which has a predominantly minority enrollment.
"Lower loan repayment rates are a function of students being caught in a financial vice created by bad higher education policy,” Bruno Behrend, a senior fellow for education policy at The Heartland Institute, said. “First, the costs of attending college have skyrocketed based upon the over-staffing of unnecessary administration positions, and second, the quality of education has not kept pace with the rise in cost. The government induces you to go into debt to finance the expansion of higher education employment, and then you can't find a job upon graduation to pay them back."
Among IBHE schools, the 78 percent repayment rate at U of I at Urbana/Champaign (U of I) ranks highest, but the overall state performance is weighed down by the troubled Chicago State University (CSU), whose students only perform on 25 percent of their loans.
“We do normal loan counseling requirements and reach out to former student who are delinquent in making their loan repayments, but think the primary reason for our rate is that our students are receiving a great education, graduating and getting good jobs, which provides them with the financial resources to repay their loans,” Daniel Mann, director of financial aid at U of I, said.
The performance of universities in this area closely correlates with graduation rates and post-college earnings. The graduation rate at CSU is 20 percent and the salary after attending is $33,000, while U of I graduates 84 percent of its students with an average salary over $56,000.