Student Loan Default Rate Up for 6th Consecutive Year
Published: Tuesday, October 22, 2013
Updated: Tuesday, October 22, 2013 02:10
The percentage of graduates that default on federal student loans has risen for the sixth year in a row, the U.S. Department of Education announced in early October.
The report measured students who default less than two years after beginning the repayment process. This year’s default rate, which measured 2010 graduates, was 10 percent, the highest rate measured in the past two decades and an increase from the previous 9.1 percent, which measured 2009 graduates.
Georgetown graduates, however, have been going against this trend. According to the DOE website, the default rate for 2010 graduates was 0.5 percent, representing a continuous decrease from 0.6 percent for 2009 graduates and 0.8 percent for 2008 graduates.
“There are many reasons for our low default rate, including productive employment of our graduates, smaller average loan amount per student and efforts to help our students and families understand and access appropriate financial aid,” Director of Media Relations Rachel Pugh said.
In addition, many Georgetown students that take out federal student loans demonstrate an early awareness of the importance of paying off the debt in a timely and responsible manner.
“I’ve started saving money so that I can pay the debt off in a timely fashion,” Rashaad Eshack (SFS ’14) said. “I’ve also planned my post-grad potential opportunities knowing the fact that I’ll have to pay off debt.”
Nick Baker (COL ’15) agreed.
“I’m not worried because I’ve been aware of this since before I even chose to attend Georgetown,” Baker said. “Because of that, it’s been a part of my planning for the future.”
Despite Georgetown graduates’ relative success, the nationwide trend remains concerning. An increasing number of institutions have either seen a default rate of 40 percent or more in one year or a default rate of 25 percent or higher for three consecutive years — such institutions are not eligible to receive federal student aid. The DOE reported that eight institutions, up from two last year, have failed to meet these minimum standards.
U.S. Secretary of Education Arne Duncan expressed grave concern about the amount of debt many students face upon graduation.
“The growing number of students who have defaulted on their federal student loans is troubling,” Duncan said in a press release. “The department will continue to work with institutions and borrowers to ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions and students — as well as the business, labor and philanthropic leaders — to improve college affordability for millions of students and families.”
Regardless of his debt, however, Eshack stressed the value of a Georgetown education.
“There’s always a certain amount of risk you take on when you have debt, but the value you get out of a Georgetown education is well worth it and will give you the tools to accomplish much more down the road,” Eshack said.