LOANS: Getting an F In Finance

Getting an F In Finance

Any business student knows that bad loans come in waves. The largest U.S. guarantor of student loans is learning that lesson the hard way. The Higher Education Assistance Foundation, a nonprofit group that has guaranteed $9.6 billion in student debt, acknowledged last week that a rising tide of defaults is threatening to push the agency into insolvency. HEAF's trouble was caused primarily by its heavy commitment to trade-school students, the group with the highest default rate. More than one-third of HEAF's loans were made to students attending for-profit institutions that promised careers in fields from hairdressing to truck driving.

The Education...