For many students, the U.S. system of higher education works very well. Even with rising tuition, most four-year and community colleges still offer a good -- even great -- deal for bright young people with the fundamental skills necessary to graduate.

For others, however, our college system offers more debt than education. More than 13 percent of students who began repaying their loans in 2009 defaulted within three years, according to a recent Department of Education report.



Here is a chart showing loan-default rates across different kinds of colleges -- from two-year public colleges to four-year for-profit institutions. Overall, those institutions serving marginal and lower-income students fared the worst. The most miserable performers of all were for-profit schools, shown in green, where around one out of every five borrower defaulted.

What this tells us isn't merely that for-profits are a problem (though they are). Rather, they tell us that higher education for certain borderline students is a dicey bet to begin with. By failing to offer better options than for-profit schools, we're simply encouraging them to bet bigger than they can afford.



Borrowers at community colleges, for instance, don't have a much better default rate than their for-profit-attending counterparts. But only 23 percent of community college students have to borrow for their educations.* By comparison, 96 percent of for-profit students take out loans, as the cost of attendance can reach tens of thousands of dollars year. The striking result: even though they only make up about 13 percent of all undergrads, students at for-profits accounted for 47 percent of all defaulters. Of those who went into repayment in 2009, about 230,000 of them failed to keep up with their payments, compared to about 98,000 at community colleges.