Default Rates Continue to Rise For Federal Student Loans
According to The U.S Department Of Education http://www.ed.gov/news/press-releases/default-rates-
continue-rise-federal-student-loans. The federal government burrowing of student loans and not paying them
back is rising tremendously. The national two year cohort default rate rose from 13.4% for FY 2009 to
14.7% for FY 2010.The Department is replacing its CDR calculations from two-year to three-year
calculations as required by the Higher Education Opportunity Act of 2008. Congress included this
provision in the law because more borrowers default after the two-year monitoring period; thus, the
three-year CDR better reflects the percentage of borrowers who ultimately default on their federal
student loans.
The FY 2010 three-year cohort default rate is the second that the Department has issued, following
the release of last year’s FY 2009 three-year cohort default rate. Under the law, only three-year rates
will be calculated starting next year. At that time, THREE 3-year rates will have been calculated (FY
2009 published in 2012, FY 2010 published in 2013, and FY 2011 published in 2014).
“The growing number of students who have defaulted on their federal student loans is troubling,”
U.S. Secretary of Education Arne Duncan said. “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.” I think
that if you KNOW you cannot pay back the student loan when you first go and talk to you're financial
aid person about how much you will be getting back in student loans, and they offer something that
you know is way out of you're range to pay back then SAY SOMETHING TO THEM. It's pointless to me
that our government is sending these people money to pay for their college when they aren't paying
them back for it. That's one of the reason were probably in trillions of dollars in debt.
To ensure that students are aware of the flexible income-driven loan repayment options available
through Federal Student Aid (FSA), this fall the Department will expand its outreach efforts to
struggling borrowers to inform them about the different plans. The Department has also released new
loan counseling tools to help students and families make more informed decisions about planning for
college.
I agree with the above statement. I think we do need to be able to pay back our loans, not just for
our beneficial profits but also for our countries. Having a department that will work with the families
struggling to pay back their student loans is a awesome thing too have. You do need to always plan,
plan, plan before entering college and figuring out how you're going to pay for it.
