Student Loan Defaults On The Rise For First Time In Five Years
Student loan defaults are on the rise for the first time in five years, according to a Wednesday Department of Education report.
The Department of Education cited that 11.5 percent of the five million borrowers who started repaying federal loans in October 2013 defaulted by September 2016, reported The Washington Post. The proportion of borrowers who defaulted in the prior report was 11.3 percent.
If 30 percent of funds borrowed by debtors from a particular school are defaulted for three straight years, or 40 percent for a single year, the Department of Education can deny future funding to the corresponding institutions. The department slammed ten colleges, seven of which are for-profit and most of which are barber or cosmetology schools, with such sanctions in 2017.
While the default rate of public college students remained consistent at 11.3 percent, the rates for private nonprofit college students and for-profit college students went up from seven to 7.4 percent and 15 to 15.5 percent, respectively.
Despite this slight uptick, the percentage of defaulting borrowers has dropped from 14.7 to 11.5 percent over the past five years.
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