Over 500 U.S. colleges see at least 40% of recent borrowers fall behind on federal loans

New federal nonpayment-rate data covering roughly 17 million borrowers who began repayment from January 2020 to May 2025 shows that 500 colleges and universities have delinquency or default rates of 40% or more. Only a handful of these schools are public; the vast majority are private, for-profit institutions that depend heavily on federal student aid for revenue. Schools such as UEI College, Tulsa Welding School, Miller-Motte College and Legends Barber College appear on the list, with many borrowers struggling to repay after receiving low-quality training and limited job placement.

Analysts argue that the high reliance on federal funds—often the bulk of these schools’ income—creates a risky dynamic for taxpayers and may warrant tighter federal oversight. The Department of Education has signaled that schools with sustained high default rates could lose access to federal aid, and a new “do no harm” test is slated to assess graduate earnings against high-school earnings starting in 2028-2029.