Buried within the federal government’s new report on student loans is a statistic causing concern for some community colleges: Loan defaults in that sector have increased to nearly 10 percent.
The official loan-default rate in the sector is 9.9 percent, up from 8.4 percent a year ago, the Department of Education reports. This rate is significantly above the nationwide default rate of 6.7 percent among all institutions of higher education.
The statistics also point to a longtime dilemma facing two-year colleges: With low tuitions, few of their students typically apply for loans. But even a handful of borrowers who do not repay loans can give the college a high default rate, something that can trigger federal sanctions.
