Student Loan Defaults Continue to Rise in SD, Nationwide
"Data from the U.S. Department of Education shows that an increasing number of students in South Dakota and across the nation are defaulting on their federal loans after completing college," reports Capital Journal. "The Federal Reserve Bank of Minneapolis District, which includes the states of South Dakota, North Dakota, Montana, Minnesota, part of Wisconsin and the Upper Peninsula of Michigan, all have rates below the national average, but each state is following the national trend with steadily rising default rates. South Dakota saw a particularly large increase in the two-year default rate of students entering payment in fiscal year 2010, with 8.5 percent compared to 6.5 percent in fiscal year 2009. “The Federal Department of Education quantifies loan default rate as the two-year rate, so they look at the cohort of students who are coming in to repayment during a given fiscal year, and then they look at the number of those students who have defaulted on their federal student loans before the end of the next fiscal year,” said Daniel Palmer, director of institutional research for the South Dakota Board of Regents. In fiscal year 2010, students from all institution types entering repayment nationwide generated a cumulative loan default rate of 9.1 percent, compared to the 8.8 percent rate in fiscal year 2009. The 2010 default rate for all South Dakota colleges and universities was 8.5 percent, ranking near the middle of all states. North Dakota was lowest at 3.9 percent, and Arizona was highest at 15.3 percent. “South Dakota’s rates look high if you are comparing them to neighboring states like Minnesota and North Dakota, but a closer look shows that South Dakota doesn’t perform all that poorly,” said Ron Wirtz, editor of the fedgazette, a publication of the Federal Reserve Bank of Minneapolis. The U.S. Department of Education has begun analyzing three-year default rates, which tend to provide a clearer trend, Palmer said."
NASFAA's "Financial Aid in the News" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.