Default Rates Highlight Growing Student Loan Crisis

" ... Nearly 40 percent of student loan borrowers are either in default or more than 90 days past-due on their payments, according to a new report from the think tank Demos," Marketplace reports.

"And like Cockey, more than half of people struggling to pay owe less than $20,000. Students who borrowed less than $10,000 were about as likely to default as those owing more than $100,000.

'That was perhaps the most surprising part to me, that in essence there was no correlation between the amount borrowed and the default rate,' said the study’s author, Robert Hiltonsmith.

One likely reason: People who didn’t graduate, and didn’t get that boost in the labor market, were twice as likely to default as those with degrees.

'That’s really the hidden story of student loan default in this country,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators. 'It’s not the students who have racked up tens of thousands of dollars in loan debt. It’s the students who have relatively low amounts that have to, for whatever reason, drop out or stop out of school, and then find themselves in a world of hurt when they default.'"

NASFAA's "Headlines" 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.

 

Publication Date: 2/2/2017


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