- The two-year default rate for federal student loans rose to just over 9% while the three-year rate dropped slightly to 13.4%, according to data released Friday by the Education Department.
- This is the first year the government has released the official three-year default rate instead of just the two-year, which is to later be used in determining colleges' federal financial aid eligibility.
- The slight decline in the three-year default rate was credited to increased awareness of available repayment deferment and forbearance options, while the blame for the increase in the two-year rate, now at its highest level since 1996, was placed on the struggling economy.
From the article:
WASHINGTON - Just over 9 percent of students default on their federal student loans in the first two years after they begin paying them back, and 13.4 percent default in the first three years, according to data released Friday by the Education Department. This is the first year the federal government has released the official default rate over three years, rather than two, which will later be used to determine colleges' eligibility for federal financial aid. ...