650,000 Student Loan Borrowers Who Began Repayment In 2011 Have Defaulted On Federal Loans

Career College Central Summary:

Maybe more consumer are realizing the long-lasting negative effects that can come from not repaying their student loans.
Or maybe not. we don’t really know why, but we do know that the number of borrowers defaulting on some federal student loans is decreasing.
A new report from the Department of Education found a drop in the percentage of borrowers who are defaulting on their student loans in the first years they are due.
Of the more than 4.7 million borrowers who began paying back their student loans in 2011 only 650,000 have defaulted.
That number represents 13.7% of borrowers, a full percentage point less than the default rate of those who began repayment the year before. In all, the default rate dropped for each of the three main college sectors.
The default rate was 12.9% for students at public schools; 7.2% for students at private, nonprofit schools; and 19.1% for students at for-profit colleges.
Any school with a default rate of 30% or more for three consecutive years, or a 40% rate for one year, faces the loss of access to those federal programs.
This year, the Department identified 21 schools that had default rates high enough to lose eligibility for federal aid programs.
Of those schools, 20 were from the for-profit sector. Each school will have an opportunity to appeal the loss of funds.

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