Questioning Colleges’ Role in Bad Loans for Boot Camps
Alexis Gravely
June 17, 2021
The colleges appear to be leading students to risky loan providers, raising questions about the relationship between the institutions and lenders and how much information they’re disclosing to students.
A report released last week by the Student Borrower Protection Center shed light on public colleges and universities that have been promoting high-risk loans for short-term programs, but in several respects, the report prompted just as many questions as it offered answers.
Using publicly available data, SBPC showed that some colleges have been encouraging students to take out “shadow debt” — which it defines as the loans and credit outside the traditional private student loan market — that is marked by high interest rates and excessive fees, according to the report.
The colleges, along with contractors called online program managers who help facilitate online course offerings, have been advertising lenders like Climb Credit, Ascent Funding, Meritize and PayPal Credit on their websites. They’re most often suggested as financing options for boot camps, or non-degree-granting programs that train students in a variety of topics, like cybersecurity or computer programming.
