As the US Department of Education weighs new rules for so-called for-profit colleges, the president and CEO of Devry Inc., a major player in that arena, told CNBC Thursday that half the loans for higher education would fail under the government's proposed changes.
“It’s a new definition of repayment,” said Daniel Hamburger of Devry , whose market cap is $3 billion. “It sounds like repayment, but it’s not. By this definition, half of all colleges in the country would fail the test. Harvard Medical School has a 24 percent repayment rate.”
The education department has estimated that Devry has a 34 percent default rate. And according to the department, for-profit students represent 26 percent of borrowers and 43 percent of those who default. It favors tying student loan repayments to federal aid eligibility.