National loan default rates dip for second straight year
- The U.S. Department of Education recently announced that the national student loan default rate has decreased for the second consecutive year, down to about 11.3%.
- Department officials attribute the decline to increased efforts from institutions to educate students and graduates about the long-term impact of loan default, and increased education about repayment options offered by the federal government.
- The rates reflect adjustments made for several institutions which have a specific amount of borrowers holding multiple federal loans in varying stages of repayment.
Of particular interest is that 101 federally-eligible historically black colleges and universities have been identified as compliant by the Department of Education's threshold for total loan defaults. This is a sign that some of the nation's most financially vulnerable schools may be safe, in one aspect, from penalties levied against for-profit institutions for similar postgraduate outcomes.
For these institutions, and others like community colleges, financial aid counseling is an essential part of the student experience. The federal government has created proposals on intrusive counseling that seems to be working, but the true test will not rely upon the school's effort or reported success in meeting with students, but in students and graduates actually making good on repayment.
- Inside Higher Ed Student Loan Cohort Default Rate Drops
- The Washington Post Student loan default rate dips, but ‘considerable work remains,’ education secretary says