The U.S. Department of Education has published nonpayment-rate data identifying 500 colleges and universities where at least 40% of recent federal student loan borrowers are not making payments. The data, drawn from a late-May 2026 federal analysis of roughly 17 million borrowers who entered repayment between January 2020 and May 2025, exposes a concentrated pattern of loan failure overwhelmingly tied to private, for-profit institutions.
Key Takeaways
- The U.S. Department of Education’s nonpayment-rate data flags 500 colleges where 40% or more of recent federal student loan borrowers are not repaying their loans
- Of those 500 institutions, 424 are private, for-profit schools and only 15 are public colleges
- For-profit colleges posted an average nonpayment rate of 33%, roughly double the 16% rate at public colleges and 15% at private nonprofits
- Florida Career College recorded a 61% nonpayment rate among 28,000 evaluated borrowers
- Undersecretary of Education Nicholas Kent warned that institutions failing to prepare students for repayment risk losing access to federal student aid
For-Profit Schools Account for the Vast Majority of Flagged Institutions
The breakdown across institution types tells a clear story about where federal loan dollars are going out and not coming back. For-profit colleges averaged a 33% nonpayment rate in the Department of Education’s data. Public colleges averaged 16%. Private nonprofit institutions came in at 15%. The gap between for-profit schools and every other category of higher education is not marginal — for-profit institutions carry roughly double the nonpayment burden of their public and nonprofit counterparts.
Of the 500 schools that crossed the 40% threshold, 424 are private, for-profit colleges. Just 15 are public institutions. The remaining schools fall into the private nonprofit category. That concentration matters because many of these for-profit schools actively market to low-income students and rely heavily on federal financial aid dollars for their operating revenue, creating a cycle in which taxpayer-funded loans flow into institutions whose graduates frequently cannot or do not repay them.
The pattern is not new. A previous federal administration cracked down on for-profit college chains with high default rates, pressuring two large chains to close. What this latest data release does is put hard, updated numbers behind a problem that has persisted across multiple administrations and multiple rounds of attempted reform.
Individual Schools Show Nonpayment Rates Well Above 50%
Several specific institutions stand out in the data for nonpayment rates that go far beyond the 40% floor. Florida Career College, a for-profit school with campuses across the state, recorded a 61% nonpayment rate among roughly 28,000 evaluated borrowers. The U.S. Department of Education previously moved in April 2023 to cut Florida Career College off from federal aid after finding that staff had manipulated the “ability to benefit” test used to admit students without a high school diploma. Despite that earlier intervention, the institution’s borrowers continue to show up in the data at strikingly high nonpayment levels.
Tulsa Welding School, another for-profit institution, had nearly 20,000 recent borrowers in repayment, but more than half were not actively making payments. Miller-Motte College, a career training school operating campuses in Tennessee, Georgia, North Carolina, and Oklahoma, had 37,000 borrowers on its books. Approximately half of those borrowers were not repaying.
UEI College, a for-profit institution offering certificate programs, posted a nonpayment rate hovering around 55%. A UEI College spokesperson acknowledged the institution is not fully sure why its rate runs higher than even the for-profit sector average, adding that the school is working to reconnect with former students to understand what is happening. That admission stands out given that UEI College charges tuition rates that reached $19,500 for a single certificate program as recently as 2015, according to borrower records reviewed in the data.
Borrower Outcomes Illustrate the Human Cost Behind Institutional Numbers
Behind the institutional data are individual borrowers dealing with the consequences of these numbers on their credit, their wages, and their long-term financial trajectories. Lisa Collenbaugh, a former UEI College student, still owes the federal government $10,389.47 for a certificate program she could not afford to finish. Collenbaugh enrolled after a period of housing instability, drawn by the promise of a career path and stability. The training she received did not lead to the career outcomes the school had marketed.
Collenbaugh’s experience is not an outlier at institutions with nonpayment rates above 50%. At those schools, more former students are behind on their loans than current on them. That reality has downstream effects on borrowers’ ability to qualify for housing, auto loans, and other forms of credit — consequences that ripple outward from a single enrollment decision made years earlier. Student loan payments enter default after 270 days of nonpayment, and credit bureaus are typically notified as early as 90 days overdue, meaning the damage begins well before loans formally enter default status.
Preston Cooper, who studies higher education at the American Enterprise Institute, noted that many for-profit schools have long carried higher delinquency and default rates compared with more traditional institutions. The difference with this data release is that the Department of Education has now attached specific nonpayment rates to named institutions, making it possible for prospective students, parents, and policymakers to see exactly which schools are producing the worst borrower outcomes.
Federal Officials Signal Potential Consequences for Institutions
Nicholas Kent, undersecretary of education, issued a statement alongside the data release that carried a direct warning. Kent stated that institutions cannot continue to benefit from taxpayer dollars while ignoring the fact that a significant share of their students are not prepared to repay their loans. Kent added that it is time for institutions to step up or risk losing access to federal student aid.
That warning carries weight because many of the flagged for-profit schools depend on federal financial aid for a substantial portion of their revenue. Under existing federal rules, proprietary schools must derive at least a portion of their revenue from sources other than federal financial aid — but the threshold has historically been set high enough that most schools clear it. If the Department of Education uses this nonpayment data to tighten eligibility criteria or enforce existing accountability measures, the financial model underlying many of these institutions could face direct pressure.
Eileen Connor, head of the Project on Predatory Student Lending, a nonprofit that advocates for borrowers and that reviewed the data, called the numbers jaw-dropping. Connor emphasized that institutions should not be able to profit from taxpayer-funded lending programs while their graduates consistently fail to reach repayment. The data is publicly available through the Federal Student Loan Portfolio data center, and it represents the most current institutional-level snapshot of where federal student loan borrowers are falling behind — and which schools are producing those outcomes at the highest rates.
FAQs
What Does a Nonpayment Rate Mean for a College?
A nonpayment rate reflects the share of recent federal student loan borrowers from a given institution who are at least 90 days behind on payments or have already passed the 270-day mark into default. A rate of 40% or higher means that at least four out of every ten recent borrowers at that school are not actively repaying their federal loans.
Which Types of Schools Have the Highest Nonpayment Rates?
Private, for-profit colleges account for 424 of the 500 institutions flagged in the data. The for-profit sector averaged a 33% nonpayment rate, compared to 16% at public colleges and 15% at private nonprofits. Only 15 public institutions appeared on the 500-school list.
Could Schools Lose Federal Student Aid Over This Data?
The Department of Education has signaled that institutions with persistently high nonpayment rates could face consequences, including potential loss of access to federal student aid programs. Undersecretary of Education Nicholas Kent stated directly that schools that fail to prepare students for loan repayment risk losing that access.
How Many Borrowers Does This Data Cover?
The Department of Education’s analysis covers approximately 17 million federal student loan borrowers who entered repayment for the first time between January 2020 and May 2025. The nonpayment rates are calculated from this cohort at the institutional level.
What Happens to Borrowers Who Stop Making Payments?
Federal student loan payments are considered delinquent after 90 days of nonpayment, which is when credit bureaus are typically notified. After 270 days of nonpayment, loans enter default. Default can result in wage garnishment, tax refund seizure, and long-term damage to credit scores.
