More Default Danger Ahead

For student aid administrators, few factors are as seemingly unpredictable — and as important — as the cohort default rate, which measures how many students default on their loans in the first years after graduation.

Next year, when the government starts measuring the percentage of student borrowers who default on their loans in the first three years after entering repayment, rather than the two currently used for measurement, those rates, which help determine which colleges’ students are eligible for federal financial aid programs, are expected to increase for many institutions.

At the annual conference of the National Association of Student Financial Aid Administrators, which began here on Sunday, college financial aid officers discussed ways to prevent students from defaulting and the factors that might lead them to stop making payments on their loans. While they recommended several strategies, including financial literacy classes, advising students to borrow as little as possible and requiring counseling sessions for those who are borrowing a large amount of money, they also said that many of the factors that go into defaults are ultimately outside of institutions’ control — except for one.

Students who complete college are far less likely to default than are those who drop out, said Jacob Gross, policy and planning research analyst at the West Virginia Higher Education Policy Commission. "The most important thing we can do to help students not default is to help them finish their credential," Gross said at one of two default-rate sessions Sunday.

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INSIDE HIGHER ED

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