Tennessee: Student Loan Default Rate — Locally And Nationally — Going Down

"It appears fewer college students — both locally and nationally — are defaulting on their education loans, according to data released this week by the U.S. Department of Education," Knoxville News Sentinel reports. ...

"While there’s no single reason to explain the turnaround, many financial aid administrators and policy experts have pointed to the slowly improving economy and the introduction of more flexible, income-based payment plans. ...

While declining default rates may be a good sign, it is only one piece of information when it comes to the national picture of student debt, said Brent Tener, director of student financial aid at Vanderbilt University and a former board member of the National Association of Student Financial Aid Administrators.

'I would describe the cohort default rate as trying to describe a person by just using their height,' Tener said. 'It doesn’t give you a full understanding of what that person is about.'

One issue, he said, is students who don’t complete their degrees or certificates and are therefore less likely to pay back loans. It’s part of why community colleges have higher default rates — they serve a more high-risk population of students who are less likely to graduate."

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.   

 

Publication Date: 9/29/2014

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