By Andrew Gillen
The Department of Education reports that the default rate on student loans for the latest cohort is now 6.9%.
So 6.9% of students who began repayment between Oct 06 and Sept 07 were in default by Sept 08. That in and of itself is pretty distressing, but even more so is the fact that this is 50% higher than the rate just two years ago (4.6% in FY 2005, 6.9% in FY 2007). Be sure to check out Tim Ranzetta at Student Lending Analytics and this Quick Take at Inside Higher Ed for more discussion. Why this isn't getting more attention is beyond me, though perhaps it has to do with the fact that nothing gets a headline anymore unless it involves a trillion dollars.
I’m starting to get the feeling that we’re encouraging students to mimic the rest of the country in taking on unsustainable debt. (The upper right chart here shows the astronomical increase in our dept to GDP ratio).
That didn’t work out so well for the country. I hope the students fare better.