Magazine article Black Issues in Higher Education

WASHINGTON UPDATE; Student Loan Default Rate Lowest Ever

Magazine article Black Issues in Higher Education

WASHINGTON UPDATE; Student Loan Default Rate Lowest Ever

Article excerpt

The U.S. Department of Education's efforts to assist student loan borrowers are paying off, says Education Secretary Roderick Paige. The nation's student loan default rate has dropped to an all-time low of 5.4 percent, and for the first time ever, all schools have rates low enough to ensure they remain eligible for federal financial-aid programs, Paige said last month.

Paige applauded improved efforts by the financial-aid community to counsel borrowers and to inform them of the numerous flexible repayment options designed to meet individual repayment needs.

The national default rate has dropped nearly every year since 1990, when it peaked at 22.4 percent. The fiscal year 2001 rates released represent the most current data available and include data on borrowers who attended some 6,200 schools that participate in the Federal Family Education Loan and William D. Ford Federal Direct Loan programs. The FY 2001 default rate is a snapshot in time of borrowers who began repaying their loans between Oct. 1, 2000, and Sept. 30, 2001, and who defaulted before Sept. 30, 2002. …

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