TICAS Analysis of Official Three-Year Cohort Default Rates (FY17)
The 9.7% FY17 cohort default rate (CDR) published today by @usedgov is a decrease from the prior year’s rate of 10.1%, and is the lowest overall CDR since the current three-year rates went into effect nearly a decade ago. https://t.co/Vi7v0J6xUo
— TICAS (@TICAS_org) September 30, 2020
For borrowers, default is the worst #studentloan outcome and has serious consequences, including adding significantly to the cost of the loan. These latest CDR data show that nearly 420,000 of borrowers who entered repayment in FY 17 defaulted by the end of FY 19.
— TICAS (@TICAS_org) September 30, 2020
For schools, CDRs determine whether colleges can keep receiving federal financial aid. When too many former students default shortly into repayment, the college may lose the ability to offer federal grants and loans to students.
— TICAS (@TICAS_org) September 30, 2020
As in prior years, for-profit colleges have the highest rates of default (14.7%) and students who attended for-profit colleges account for vastly disproportionate share of #studentloan defaults pic.twitter.com/OB8OZFmmwQ
— TICAS (@TICAS_org) September 30, 2020
CDRs are a critical tool for holding colleges accountable for leaving students with debts they can’t repay, and declines are good news. But CDRs don’t tell the full story of default. Over a million borrowers default every year, and too many struggle to get – & stay – out of it. https://t.co/m61zr7nSkL
— TICAS (@TICAS_org) September 30, 2020
In response to the health and financial emergencies resulting from COVID-19, Congress and @usedgov implemented and then extended critical safeguards for #studentloan borrowers, including an interest-free payment pause for most borrowers & a stop to collections on defaulted loans.
— TICAS (@TICAS_org) September 30, 2020
For borrowers with covered federal loans, these benefits have prevented a pandemic-related spike in default. They are also set to expire at the end of December.
— TICAS (@TICAS_org) September 30, 2020
With twin health and economic crises ongoing, it is imperative that Congress act quickly to extend the COVID-19 monthly payment protections to all borrowers, and ensure they last through the duration of the crisis.
— TICAS (@TICAS_org) September 30, 2020
