The number of college students who defaulted on their federal student loans climbed in the fiscal year that ended in September 2008, according to new government data released Monday.
And once again, those who attend for-profit colleges and universities were the most likely to default.
The grim numbers are no surprise, given that the timeframe roughly aligns with the start of the recession. But they come at a politically charged time, as for-profit colleges fight proposed regulations that would cut off federal aid to some programs if too many students default on loans or don’t earn enough after graduation to repay them.
Figures from the U.S. Department of Education show that 7 percent of borrowers of federal student loans defaulted within two years of beginning repayment, up from 6.7 percent the previous year and 5.2 percent the year before that.
Default rates crept up in all sectors of higher education — from 3.7 to 4 percent for private nonprofit schools, 5.9 to 6 percent for public nonprofit schools, and 11 to 11.6 percent for for-profit schools.
The data covers borrowers whose first loan repayments came due between Oct. 1, 2007, and Sept. 30, 2008, and who defaulted before Sept. 30, 2009.
“Even before the economy went down, student borrowing had doubled in this decade,” said Patrick Callan, president of the National Center for Public Policy and Higher Education in San Jose, Calif. “More students borrowed, and they borrowed more money, and they’re now going out in a very tough economy.”
