Nobody really likes the federal government’s method of measuring and reporting student loan cohort default rates. Some members of Congress and advocates for students, arguing that the rates are no longer a realistic assessment of how individual institutions (and lenders) are faring in keeping student borrowers on track to repayment, want to extend to three years from two the period over which borrowers’ defaults are measured.
Their effort to do so during debate over renewing the Higher Education Act last winter was turned aside, though, by career college officials and others who agree that the default rates are flawed — but for completely different reasons. They think the federal government should stop using them as an indicator of students’ indebtedness or, more importantly, of colleges’ malfeasance.
For now, though, the default rates — imperfect as they are — aren’t going anywhere. In its annual report on the cohort default rates Tuesday, the Education Department said that the 2006 default rate — the proportion of federal loan borrowers who began loan repayments between October 2005 and September 2006, and who defaulted on their loans by the end of September 2007 — had risen to 5.2 percent, from 4.6 percent the year before. Increases were greatest among borrowers who attended for-profit colleges. Read full story. (Inside Higher Ed)