Our Changing Gears project is looking at student debt... and we know that many families struggle to afford traditional colleges.
But a lot of student debt comes from attending private, for-profit schools that focus on vocational training.
These students default on their loans twice as often as students from public colleges.
Kate Davidson has the story of one small school battling big defaults.
America's student loan debt is now bigger than its credit card debt. It's almost a trillion dollars. And default rates are rising.
HOWELL: I guess I do what everyone else has been doing, dodging the phone calls, you know. Because we don't have 15 thousand to pay.
Mark Howell is on the verge of default. In fact, the school he went to has the highest student loan default rate in Michigan. It's not U of M, not Kalamazoo College.
(buzz ambi) DESMOND: Ouch. AMUNDSON: You stay still…
It's barber college. In Ohio and Wisconsin beauty schools have the highest default rates. Now, these are small schools, so their default rates are volatile. But this is a story about why they matter at The Flint Institute of Barbering. So, picture an overgrown barber shop. It's big and cheap and cheerful.
DAVIDSON: What style of haircut do you want? DESMOND: A college boy.
Desmond is five. The student palming his head like a basketball is 50. Tom Amundson was an auto designer for 30 years but got laid off. Enter his buddy, the barber.
AMUNDSON: He talked to me about it and he said why don't you get into the business? And I said kinda old. And he said no you're never too old to cut hair.
So Amundson took out federal loans, just like three quarters of his class. Martha Poulos's runs this school, it's eight grand for a year. But she says most of her students are low income. So the cost of living and supporting kids and just avoiding poverty, all of it affects default rates.
POULOS: The three year ago rate was 15.5%. Our 2008 cohort was 29%. Our 2009 cohort - and these are the official rates - was 30.5%.
That means almost a third of those who started repaying their loans in fiscal year 2009 had defaulted two years later.
POULOS: We were very alarmed. And not happy … and … we're trying to work as much as we can and do the best we can…
Now, this is a woman who will dye her student's jeans black …
POULOS: I have to use a laundry tub…
by hand …
POULOS: And stir it and leave it there for hours and hours and hours…
if they can't afford to meet the school's dress code. But in the end, she hired a service to track delinquent students who are delinquent on their loans. She says she had to. Schools with high default rates can lose access to federal student aid. And more than half this school's revenue comes from that aid.
DEMING: They are so reliant on federal financial aid dollars.
David Deming is an assistant professor at Harvard's Graduate School of Education. He's talking about the larger for-profit sector, which he says gets almost 75% of its revenue from federal student aid. And as for students who borrow money…
DEMING: If you take out a five figure loan for a relatively short program, if you don't find employment relatively soon after that program it's going to be very hard to pay back your loan.
HOWELL: Time slips away in between all of that, you know what I'm saying? And it is not gonna wait for you.
Remember Mark Howell? He's working, he's cutting hair in a kind of hard to find corner of a mall in Flint. And he loves it. But he says building clientele is slow in a town that's saturated with barbers.
HOWELL: You can't make the payments, but at the same time, you're trying to find work to make the payments. And if you don't make the payments, you gotta deal with the consequences behind that, which is your license at stake.
He's already gotten a couple loan deferments. In the meantime, he says, he's scratching and hustling to make ends meet. And he's not the only one.
For Changing Gears, I'm Kate Davidson in Flint.