Abstract
Despite its great social and financial importance, there is little prior empirical research on student-loan default that focuses on the role of for-profit universities. I find student loan default to be positively associated with whether the institution is for-profit, even when controlling for previously identified important factors, such as the percentage of students who are low income and from minority groups; as well as graduation rates and whether the institution is 2-year. Overall my results are consistent with for-profit institutions encouraging ill-advised loans. The results are economically significant, with default rates generally 5–6% higher for private for-profit institutions.
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