FEDERAL LOAN DEFAULT RATES SUBSTANTIALLY LOWER AT PRIVATE COLLEGES
SEPTEMBER 29, 2014
After increasing for years, the rate at which students default on their loans several years after leaving college has ticked slightly down across all sectors of higher education, according to a U.S. Department of Education report released on September 24.
The share of borrowers defaulting on their loans within three years of when they were supposed to begin repaying them declined to 13.7 percent from 14.7 percent last year, according to new federal data. This year's rate represents more than 650,000 individuals who defaulted on their loans. This year's figure measures the number of borrowers who entered repayment between October. 1, 2010 and September 30, 2011, and who defaulted on their federal loans before the end of last September.
Community colleges and for-profit institutions continued to see the highest rates of default among the students who borrow at those institutions. More than one in five students who took out federal loans to pay for community colleges defaulted on their debt even through many community college students don't take out loans in the first place because of lower tuition costs. For-profit colleges had a 19.1 percent default rate, down from 21.8 percent the previous year.
Four-year public and private non-profit colleges and universities had the lowest lowest rates--8.9 percent and 7.2 percent respectively. Even more noteworthy is the fact the default rates among private Christian higher education institutions associated with the Association for Biblical Higher Education and the Council for Christian Colleges and Universities are less than five percent.
Federal financial (Title IV)) aid is is a special benefit that is available to American students whether they are studying in the U.S. or abroad. But with this benefit comes responsibility. Student borrowers-- please pay back your loans!
Larry J. McKinney
Higher Education Consultant