Monday, February 21, 2011

States and Student Loan Default Rates

By Christopher Matgouranis

This chart depicts the ten U.S. states with the highest student loan default rates from fiscal year 2008 (the last year of data availability). There were several characteristics that these high default rate states had in common. First, on average the states with higher default rates were poorer, with 8 out of 10 having a per capita personal income below the U.S. average. Secondly, these states typically had higher unemployment rates. Neither of these two results are surprising since both low income levels and high unemployment would suggest that students would typically have a more difficult time earning enough to repay their loans. However, the high default states had more affordable colleges (that is, lower than average public tuition and fees) than the states with lower default rates.

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