College Decisions: The Worst Educational Investments

The latest Higher Education Research Institute freshmen study shows that 82 percent of incoming students selected being “very well off financially” as essential or very important to their college choice — and it had better be, as the national student default rate rose to 11.3 percent.

In today’s job market, a college education is an almost mandatory investment. It’s typically not a risky one, and in most cases it pays off — but just as not all schools are equal in how much of a return they provide, some schools are particularly risky choices.

And while a college’s median salaries and employment rates serve as excellent benchmarks for success, just as important is the darker side — the probability that graduates will fail and be stuck with an enormous burden… one that weighs about four years and $150,000, on average.

To help shine a light on the riskiest educational investments, in addition to the map at the top of this article, we at Zippia we’ve put together a list of the four-year programs in each state that you should be wariest of.

If you were wondering about the safest investments in your future we’ve got that too — but here are the ten Most Financially Risky Colleges, with the full list at the bottom of this page:

1. South College at Asheville — North Carolina
2. Allen University — South Carolina
3. Concordia College — Alabama
4. East-West University — Illinois
5. Martin University — Indiana
6. Wiley College — Texas
7. Broadview University — Utah
8. Central State University — Ohio
9. Martin Methodist College — Tennessee
10. Rust College — Mississippi

Get a job that keeps you out of loan default
We analyzed millions of resumes to determine what jobs people with your degree are most likely to land right out of college and how they pay — search by geographical area or desired field.

How we determined the most secure college investments

Looking at a college education as an investment, we used several factors to come up with a ranking index: how much each school costs, what the risk is, and how easy it is to pay it back.

We used Integrated Postsecondary Education Data System (IPEDS) to determine how much the schools cost to attend — which is the cost of the investment. To approximate the risk of taking out loans to finance this venture, we took Department of Education data on school default rates.

And finally, we used CollegeScoreCard data to gauge the median salary at six years — this is the most critical payment success period. We assigned values to these metrics to select the Most Financially Risky Colleges in each state. Then we ranked each state’s school according to their rating.

1. North Carolina

College: South College
City: Asheville, NC
Default Rate: 27.9 percent
This satellite campus of a larger one in Tennessee is a prime example of a weak college trifecta: a high default rate bordering on losing its Title IV funding, high tuition, and a low salary. Considering that one of its touted programs is the typically lucrative allied health, this doesn’t bode well for graduates.

2. South Carolina

College: Allen University
City: Columbia, SC
Default Rate: 28.9 percent
Not to be confused with Allen College, which is actually a phenomenally sound investment, Allen University also had a six percent graduation rate in 2010 and one of the lowest salaries on this list.

3. Alabama

College: Concordia College
City: Selma, AL
Default Rate: 31 percent
Its second lowest salary on this list explains, in part, its dubious honor of second highest default rate… maintaining a rate over 30 percent for three years will lead to loss of eligibility for federal student loans and grants. It got accreditation in 1994, but that might not last for too long.

4. Illinois

College: East-West University
City: Chicago, IL
Default Rate: 14.5 percent
In 2013, East-West had the second lowest average student loan debt per graduate in America — which makes one wonder why the default rate is well above the national average.

5. Indiana

College: Martin University
City: Indianapolis, IN
Default Rate: 21.3 percent
Martin University employs a learning method known as andragogy, as opposed to pedagogy, where it involves adult learners in the learning process, encouraging them to bring their life and work experiences into classroom discussions.

Maybe it shouldn’t.

6. Texas

College: Wiley College
City: Marshall, TX
Default Rate: 29.2 percent
About 96 percent of students of the students at this open admission college receive some financial aid, but the school still boasts a sky-high default rate.

The debate team was featured in the Denzel Washington movie The Great Debaters — but the school lacks a history department and the movie apparently did as well, since the school they beat was actually USC, not Harvard.

7. Utah

College: Broadview University
City: West Jordan, UT
Default Rate: 20 percent
Broadview University was founded in 1977, began offering bachelor’s degrees in 2005, and its accreditor lost its accreditation when the Department of Education de-recognized it in 2016.

8. Ohio

College: Central State University
City: Wilberforce, OH
Default Rate: 29.5 percent
With the most exceedingly vague name of any college ever, the $19,100 salary is the worst on this list of pretty terrible salaries. And hey Trump fans, protege Omarosa from The Apprentice is an alumnus — come to think of it, even Trump University may have performed better.

9. Tennessee

College: Martin Methodist College
City: Pulaski, TN
Default Rate: 19.4 percent
Martin Methodist has a 19.4 percent default rate, $23,200 a year tuition costs, a 43 percent graduation rate, and a 5’9″ former basketball player who won the 2012 Slam Dunk contest.

10. Mississippi

College: Rust College
City: Holly Springs, MS
Default Rate: 21.3 percent
Another interesting set of Rust College percentages: 73 percent of its students have GPAs under 3.0 and only 57 percent of freshmen return for their sophomore year.

Some of the takeaways

The Department of Education began tracking individual schools loan default rates in an effort to measure quality outcomes of federal loan programs.

And these institutions care about Big Brother watching, because if a school has a cohort default rate over 30 percent for three years or 40 percent for one year, it loses eligibility to participate in the Federal Family Education Loan (FFEL), Direct Loan, and Federal Pell Grant Programs for the year.

One of the most important things to today’s college freshmen is that the college they choose will help them get a good job — but the most important thing is that the college experience will at least not leave them crushed by a mountain of debt and bad credit — check graduation rates and accreditation.

Get a job that keeps you out of loan default
We analyzed millions of resumes to determine what jobs people with your degree are most likely to land right out of college and how they pay — search by geographical area or desired field.

Most Financially Risky Colleges

As a note, the University of Wyoming is in this list by default… there are so few colleges in Wyoming that it’s also the most financially secure college as well.

Author

David Luther

David Luther was the Content Marketing Editor for the Zippia Advice blog. He developed partnerships with external reporting agencies in addition to generating original research and reporting for the Zippia Career Advice blog. David obtained his BA from UNC Chapel Hill.