Default rate on federal student loans

 

default rate on federal student loans

Defaults on federal student loans declined from a year earlier, as the U.S. government bolsters programs to prevent borrowers from skipping payments.

The rate, measured over the first three years that borrowers are required to pay their loans, was 13.7 percent, down from 14.7 percent last year, the Education Department said today in a statement. The data encompasses borrowers who would have begun paying in 2011.

“The drop is almost certainly the result of multiple things, including an improving economy, greater school focus on preventing default rates, some for-profit colleges manipulating their default rates and increased borrower enrollment in income-driven repayment plans,” said Pauline Abernathy, vice president of the Institute for College Access & Success, a nonprofit research and advocacy group in Oakland, California.

Default rate on federal student loans

Challenge West Virginia is a statewide organization of parents, educators and other West Virginians committed to maintaining and improving small community schools. Our goal is to reform education in the Mountain State so that citizens have a voice in policy decisions and every child has the opportunity to receive a first-class education and the promise of a bright future.

Presidential contenders’ increasing talk of alleviating the massive U.S. college student debt burden has outsize implications for West Virginia – which has, according to the latest federal data, the country’s third-highest default rate on federal student loans.

Nearly 6,700, or 18.2 percent, of the Mountain State’s roughly 36,700 students who entered repayment in federal fiscal year 2010-11 had defaulted before the Oct. 1, 2013, start of last fiscal year – 4.5 percentage points higher than the national rate.

Defaults on federal student loans declined from a year earlier, as the U.S. government bolsters programs to prevent borrowers from skipping payments.

The rate, measured over the first three years that borrowers are required to pay their loans, was 13.7 percent, down from 14.7 percent last year, the Education Department said today in a statement. The data encompasses borrowers who would have begun paying in 2011.

“The drop is almost certainly the result of multiple things, including an improving economy, greater school focus on preventing default rates, some for-profit colleges manipulating their default rates and increased borrower enrollment in income-driven repayment plans,” said Pauline Abernathy, vice president of the Institute for College Access & Success, a nonprofit research and advocacy group in Oakland, California.

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