Sharp Uptick in Federal Student Loan Default Rates
New data released by the U.S. Department of Education shows a sharp increase in the rate at which student loan borrowers are defaulting. The official “two-year cohort default rates” show that 8.8 percent of student loan borrowers who entered repayment in 2009 had defaulted by the end of 2010, up from 7 percent for those entering repayment in 2008. Across all colleges, about 320,000 borrowers who entered repayment in 2009 defaulted by the end of 2010 – 81,000 more than the 239,000 borrowers who entered repayment in 2008 and defaulted by the end of 2009. More than half of this increase came from students who attended for-profit schools: about 49,000 of the 81,000.
