Default Data On Parent PLUS Loans
Career College Central summary:
The national default rate for Parent PLUS loans has nearly tripled in recent years, but it remains well below the default rates for other federal student loans, according to data released for the first time last week by the U.S. Department of Education.
Of all parent borrowers whose PLUS loans entered repayment in the 2010 fiscal year, the data show, 5.1 percent were in default three years later. That figure has risen steadily from the 1.8 percent default rate for the cohort of borrowers in the 2006 fiscal year.
Breaking down the 2010 figure by type of institution, for-profit colleges had the highest default rate, at 13.3 percent, compared with 3.4 percent and 3.1 percent, respectively, at private nonprofit and public institutions. The data do not distinguish between two- and four-year institutions or types of degree.
The release of new information about the performance of PLUS loans comes as the department is considering changes to the eligibility criteria for such loans. In 2011, the Education Department touched off a wave of controversy when it tightened the standards for those loans, which led to large numbers of students and their families being denied PLUS loans.
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