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Default rate declines for student loans

Friday, September 17, 2010 | 6:56 a.m. CDT; updated 10:10 a.m. CDT, Friday, September 17, 2010

JEFFERSON CITY — Fewer Missourians are defaulting on their student loans.

The Department of Higher Education says the default rate was 5.8 percent this year, which was down from 6.09 percent last year.

The state agency says more than 77,000 people in Missouri are paying back their student loans on time, but 4,500 people from 164 schools are in default.

Missouri officials say the default rate is below the national average. They partly attribute that to grants offered to schools that want to cut their students' default rates. The grants are used for programs to teach students about money management.

The default rates track borrowers whose first loan payment was due from October 2007 through September 2008 and who defaulted before Sept. 30, 2009.

 


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Comments

Ellis Smith September 18, 2010 | 12:00 p.m.

Years ago, loan defaults were a problem in Pennsylvania. Their state agency decided to take out full page ads in the Philadelphia and Pittsburgh daily newspapers, listing in small but readable print the NAMES of those in default.

A significant number of those listed decided they could either pay out their loans or at least resume making repayments. It's amazing what bad publicity can accomplish.

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