Coruscation

though the for-profit system serves only a little more than a tenth of those in postsecondary education, it accounts for nearly half of student loan defaults. The losses are generally of little concern to the companies themselves, because most of the tuition is paid by federal loans backed by the taxpayer. The defaulting students often end up with their lives in financial ruin.

Bankruptcy makes it possible to escape credit card and gambling debt but nearly impossible to escape student loan debt. As a result, students who default on school loans may never be able to have that weight lifted and can end up with creditors garnishing their wages.

The Obama administration has tried to address these problems with new rules to make programs with especially high levels of student debt and very low repayment rates ineligible for federal student aid. But these rules are insufficient.