Non-Profit Colleges See Spike In Loan Forgiveness Claims
Mark Kantrowitz
March 24, 2025
More than 20% of borrower defense claims involve public or private nonprofit colleges, not just for-profit schools.
Approval rates for private nonprofit college claims are double those for for-profit institutions.
Complaints often focus on employment outcomes, program cost, and credit transfer, varying by institution type.
The borrower defense to repayment program is often associated with students defrauded by for-profit colleges. But newly obtained federal data paints a more complicated picture—one that reaches far beyond the for-profit sector.
According to recent data obtained in response to a Freedom of Information Act request, 22% of all borrower defense claims involve public and private nonprofit colleges. Even more surprising, applications involving nonprofit colleges had a higher approval rate than those filed against for-profit schools: 50% compared to just 23%. That data contradicts years of assumptions that borrower defense issues are isolated to one sector of higher education.
The allegations span a wide range of misconduct, from overstated job placement rates and inflated program costs to false claims about accreditation and credit transfer. And while the bulk of claims still stem from for-profit colleges, the presence of nonprofit and public institutions in this space suggests a broader pattern of student issues.
