Student Loan Default Rate Increases

The default rate on federal student loans is increasing. According to an announcement by the U.S. Department of Education:

The draft FY 2009 national student loan cohort default rate is 8.9 percent. The draft rate increased from the national FY 2008 official rate of 7.0 percent and the national FY 2007 official rate of 6.7 percent.

The FY 2009 draft cohort default rates represent the percentage of borrowers in the Federal Family Education Loan and William D. Ford Federal Direct Loan programs who began repaying their loans between October 1, 2008 and September 30, 2009, and who defaulted on or before September 30, 2010.

That means that there are nearly 90,000 more people defaulting on their student loans than the year before.

Students who attended for-profit schools accounted for 47 percent of the defaults. Only 10 percent of college students, however, attend proprietary schools.

Support Nonprofit Journalism

If you enjoyed this article, consider making a donation to help us produce more like it. The Washington Monthly was founded in 1969 to tell the stories of how government really works—and how to make it work better. Fifty years later, the need for incisive analysis and new, progressive policy ideas is clearer than ever. As a nonprofit, we rely on support from readers like you.

Yes, I’ll make a donation

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer