New data collected by the U.S. Department of Education shows the number of students defaulting on their student loans has increased during the past year.
U.S. Secretary of Education Arne Duncan announced that the national cohort default rate from the fiscal year 2008 national cohort default rate was 7 percent, a 0.3 percent increase from fiscal year 2007, according to a press release from the Department of Education.
Default rates at public institutions rose from 5.9 to 6 percent, private institutions rose from 3.7 to 4 percent and for-profit schools rose from 11 to 11.6 percent, the press release stated.
The data collected represents the cohort of borrowers whose first loan repayments were due between October 2007 and the end of September 2008, and who defaulted before the end of September 2009. During this time, there were about 3.4 million students who entered repayment of and 238,000 who defaulted on their loans.
Students attending for-profit institutions are the most likely to default, Duncan said. During Award Year 2008-09, students at for-profit schools represented 26 percent of the borrower population and 43 percent of all defaulters.
"While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not," Duncan said. "Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use. This is a disservice to students and taxpayers and undermines the valuable work being done by the for-profit education industry as a whole."
Because of the rapid growth rate of debt load and default rates at for-profit universities, the Obama administration published a proposed regulation last June which, among other things, ensures that only eligible students and programs receive aid and provides consumers with better information about the effectiveness of career college programs. Another regulation released July 26 went even further to protect students from debt by requiring for-profit universities to better prepare students for "gainful employment," or employment that is best matched to the abilities and potential of the individual.
The University has among those institutions that has not been too impacted by this phenomena, as only 35 students out of 2,262 borrowers have defaulted on their loans, a mere 1.5 percent.
"Our population is not as impacted as populations at other schools could be," said Scott Miller, associate director of Student Financial Services.
Miller credited the University's high retention and graduation rates in assisting students to not default on their loans but added that "most of the default prevention comes from the guarantors of the student loans." It is part of the guarantor's responsibility to keep in touch with the students and make sure that they are making their payments, he said.
Miller also cautioned that it is better to be up front with your lender to prevent defaulting on your loans.
"If you're having a problem making your payments, then call your lender. It's better to tell them up front," he said.
Read More
Honor Committee plans Dorm Talks and finals week initiatives
By Lexie Stadler | 2 days agoIn an effort to enhance student outreach and introduce incoming students to the Honor System, the Committee will reintroduce Dorm Talks in the Fall 2024 semester.
BREAKING: Two fraternities suspended, one terminated after hazing allegations
By Ford McCracken | 2 days agoThe University’s chapter of Pi Kappa Alpha is the founding chapter of the fraternity, which was founded in West Range room 47 in 1868.
From the archives: April 22 – April 28
By Maisy Callahan and Grace Franklin | 2 days agoThose opposed to the Mall feared closing Main St. would create inconvenience and traffic, which would in turn decrease the income made by merchants.
