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Data Suggests More Default on Loans than Government Reports


Jul 13, 2010
An analysis of long-term data conducted by The Chronicle of Higher Education has found that the number of students who default on their loans is far greater than what the federal government has been reporting. According to the data, about one in every five federal student loans overall has gone into default since 1995; the default rate for student loans covering costs at for-profit colleges is even higher, at 40 percent. The default rate for community college students is about 31 percent. The federal government’s numbers are much lower. The U.S. Department of Education reported default rates for federally guaranteed student loans at about 6.9 percent for fiscal year 2007’s cohort. Why the disparity? The Chronicle says the government’s numbers only show those students who defaulted on [...]
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77 months ago 0 comments

As Congress continues to puzzle out questions of student loans and consumer protection, new information released today suggests that young adults attempting to repay their student loans may be having even more trouble than previously thought. As a condition of the Higher Education Opportunity Act, the US Department of Education has started tracking three-year instead of two-year default rates [...]

84 months ago 0 comments Read More

The U.S. Supreme Court began hearing arguments today on the intricacies of one student's 20-year-old debt that could change the way bankruptcy law handles student loan cases. The case, United Student Aid Funds Inc. v Espinosa, goes back to 1992, when Francisco Espinosa, a technical school graduate, filed for Chapter 13 bankruptcy. Espinosa by then owed nearly $18,000 in not only student loans [...]

84 months ago 0 comments Read More

For-profit career colleges have had a rocky history, being met with skepticism and criticism from traditional academic institutions, as well as undergoing a great degree of government scrutiny over the years, as some institutions have been revealed to engage in a variety of questionable practices. So, when the Government Accountability Office announced an investigation of proprietary institutions [...]

87 months ago 0 comments Read More

According to newly released data, default rates on federal student loans continued to climb in 2008, reaching a nine-year high of 6.7 percent, most likely as a result of the recession. The annual cohort default rate, released by the Department of Education on Monday, covers federal student loans that went into repayment between October 2006 and September 2007 and had gone into default by [...]

87 months ago 0 comments Read More