Ranking the Highest Student Loan Default Rates in RI
Monday, November 04, 2013
See Which Schools In Rhode Island Had the Highest Number of Students Defaulting BELOW
"Defaulting on a student loan has a lot of serious consequences. Students and families should be very careful to borrow within their means and make sure they will be able to afford their monthly payments prior to taking on any debt. Federal student loans aren’t dischargeable in bankruptcy," said Chad Pastorius with the Rhode Island Student Loan Authority. "If you default on a federal student loan you may be sued, have your wages garnished or your federal and state income tax refunds withheld."
Pastorius continued, "Defaulting also negatively affects credit, which can lead to a number of problems, including a person’s ability to secure a mortgage, rent an apartment, and in the worst cases, get a job since some employers check credit before making hiring decisions. On top of all of this, a student becomes ineligible for any future federal student aid if they have a defaulted federal student loan."
DOE Looking at Longer Cohort Data - Rhode Island Seeing Signs of Improvement
“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.”
Overall, the national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010
"We are yet to see a reduction in student borrowing so it's hard to see how we will see a decline in loan defaults without better economic conditions and a more robust job market for recent college graduates," said Pastorius.
Still, Pastorius saw signs of hope in Rhode Island.
"In Rhode Island, the state schools, URI, RIC, and CCRI, along with private schools such as Roger Williams University, have frozen tuition. Many schools have introduced financial literacy education programs and some have dedicated additional resources to counseling borrowers before and during repayment," said Pastorius. "These efforts have had success at some schools here in the state as evidenced by their declining cohort default rates in an environment where rates are increasing on the state level and nationally.
He continued, "RISLA provides repayment counseling services to schools to assist with informing borrowers of these and other options that can help borrowers avoid defaulting on their loan obligations and the consequences that go along with default. RISLA also provides software to schools to help them identify borrowers in trouble and manage the repayment performance of former students."
Related Slideshow: SLIDES: Ranking the Highest Student Loan Default Rates in RI
The U.S. Department of Education announced the official FY 2011 two-year and official FY 2010 three-year federal student loan cohort default rates (CDR).
The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010.
Below are the FY 2010 default rates for all post-secondary schools in Rhode Island listed with the Department of Education, from lowest default rates -- to the highest.
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