Feb. 11, 2011 is the day my first student loan payment is due and like most students, I’m dreading repayment. While some students can handle the monthly amount, others are struggling to find work and the income to pay off their debt. In a tough job market, it’s no surprise that the student loan default rate continues to increase.
Education secretary Arne Duncan released a statement last Monday saying that he isn’t happy with the continued rise of student loan default rates. He attributes a significant amount of default rates to for-profit colleges, like the University of Phoenix or National American University.
“While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not,” Duncan said in a statement on Sept. 13. “Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use.”
Duncan said that as of the 2008 fiscal year, the most recent period for which data is applicable, the total student loan default rate was 7 percent. The fiscal year before that, it was 6.7 percent. And before that it was 5.2 percent. Read the rest of this entry »