Loan Repayment Rates Among Large Online Universities

Considering an online university? Use these rates to help determine their value.

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For-profit universities, many of which have heavy online course offerings, have come under great scrutiny from legislators and regulators in recent months. Given that a vast majority of online students are funded by federal loans, the chief concern of the U.S. Senate Committee on Health, Education, Labor and Pensions is to ensure that students educated online are able to secure stable jobs with their degrees and can repay those student loans funded by American taxpayers. Federal loan repayment rates, released by the Department of Education, are indicative of a school's ability to prepare students for their professional lives. According to the newest data, many well-known online schools fall short.

[Read about schools with high student loan repayment rates.]

This data was pieced together using federal loan repayment rates from students who either graduated or left college from October 2004 to March 2008. If a student has made any payment on those loans, no matter how small, they are deemed to be in repayment (Students who make payments that only cover interest charges are not deemed to be in repayment). The Department of Education has proposed rules that would pull federal funding from schools at which fewer than 45 percent of students are able to enter into repayment on their federal loans.

[Read about surprises in the loan repayment data.]

The table below highlights the median debt and loan repayment rate for students who have left some of the nation's largest online-oriented universities. For comparison, below the list of online schools is a list of four lower-tier national universities. Each of these schools is ranked by U.S.News & World Report as a second-tier national university (the classification of traditional school deemed to be most comparable to online universities) and represents a different region of the country.. As shown in the table, the average repayment rate for students at these brick-and-mortar schools is 20 percentage points higher than their online counterparts, though the level of indebtedness is nearly identical.

[Learn more about online education.]

If you're considering enrolling in an online program, it's important to evaluate each school's loan repayment rate, given that many of them are below the government's 45 percent threshold:

Large Online-Oriented Schools Median Federal Debt for Those Entering Repayment Loan Repayment Rate (Rounded to nearest percent)
Grand Canyon University $19,818 52%
American Public University System $4,436 47%
University of Phoenix $14,299 44%
Walden University $22,450 41%
Capella University $20,613 40%
American Intercontinental University $12,908 39%
DeVry University $12,010 38%
Kaplan University $8,642 27%
Strayer University $9,225 24%
     
Average $13,482 40%
     
Second Tier National Universities (By Region)    
University of Northern Colorado (West) $12,583 64%
Indiana University of Pennsylvania (North) $15,328 61%
Northern Illinois University (Midwest) $13,533 60%
Georgia Southern University (South) $13,525 51%
     
Average $13,742 59%

Source: Department of Education