The U.S. Department of Education has changed the student loan default rates at 21 colleges to allow them to continue receiving federal funding.
Colleges with default rates at more than 30% for three consecutive years or 40% for one year are subject to losing their federal funding and grants from the Education Department, according to a report in The Wall Street Journal.
Federal law allow colleges to file appeals with the Education Department to have their default rates adjusted. In 2014 and 2015, the Education Department made voluntary adjustments to some colleges’ default rates as a result of some students having multiple loans.
"Adjusting the default rate for one or more of those years can give the colleges a reprieve that preserves their ability to offer federal student aid,” The Wall Street Journal reports.
The reason for the recent adjustments is unclear, with Education Department officials only stating that the changes are "part of the department’s deliberative process."
Ten of the 21 schools with adjusted rates are for-profit colleges and together students at the campuses received more than $145 million in federal aid in 2014/15, according to the article.
