Student Loan Default Rate Increases

Source: U.S. Department of Education

U.S. Secretary of Education Arne Duncan today announced that the FY 2008 national cohort default rate is 7.0 percent, up from the FY 2007 rate of 6.7 percent. The default rates increased from 5.9 to 6 percent for public institutions, from 3.7 to 4 percent for private institutions, and from 11 to 11.6 percent for for-profit schools.

The default rate announced today -- the most recent data available -- is a snapshot in time, representing the cohort of borrowers whose first loan repayments came due between October 1, 2007 and September 30, 2008, and who defaulted before September 30, 2009. During this time, almost 3.4 million borrowers entered repayment, and more than 238,000 defaulted on their loans. They attended 5,860 participating institutions. Borrowers who default after their first two years of repayment are not measured as defaulters in today's data.

"This data confirms what we already know: that many students are struggling to pay back their student loans during very difficult economic times. That's why the Administration has expanded programs like income based repayment and Pell grants to help students in financial need," said U.S. Secretary of Education Arne Duncan.

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