Federal data released by the U.S. Education Department reveals that 500 colleges and universities have nonpayment rates of at least 40% among students who entered loan repayment between January 2020 and May 2025. The concerning figures apply to approximately 17 million borrowers and represent a significant deterioration in loan repayment across parts of the higher education sector.
Of the 500 institutions with high nonpayment rates, 424 are private for-profit schools, while only 15 are public institutions. By contrast, public universities and private nonprofit colleges maintain average nonpayment rates around 15%. Specific examples cited in the data include UEI College, a 22-campus for-profit institution with approximately 32,000 recent borrowers and a 55% nonpayment rate, and Miller-Motte College with 37,000 borrowers facing similar challenges. Smaller institutions also appear on the list, such as Legends Barber College in Texas, where 81% of borrowers are not repaying loans.
Analysts and policymakers point to multiple factors behind the elevated nonpayment rates. While pandemic-related disruptions to the student loan system have contributed to borrower confusion, critics argue that many of these schools charge excessive tuition for programs that do not adequately prepare graduates for employment or earnings sufficient to support debt repayment. Some economists note that particular program types, such as cosmetology and barbering schools, have historically produced graduates with lower earnings prospects.
The data has prompted calls for greater accountability. Preston Cooper from the American Enterprise Institute suggested that schools with such high delinquency rates might lose access to federal student aid, comparing the situation to private lending standards. The Education Department previously stated that institutions benefiting from taxpayer dollars cannot ignore borrower preparation for repayment and risk losing federal aid access.
Schools responding to the findings have indicated they are reviewing their practices. Miller-Motte’s parent company cited unprecedented external challenges in the loan landscape and stated the organization is implementing intervention strategies. Legends Barber College similarly indicated it is examining procedures to identify areas for improved borrower outreach and education.
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