All of the nation’s historically black colleges and universities eligible for federal funding are below the U.S. Department of Education’s threshold for student loan default rates, based upon three-year repayment data.
It is the fourth consecutive year that participating HBCUs have not faced removal from Title IV and Pell Grant funding programs for posting loan default rates greater than 30 percent for three consecutive preceding years.
From the U.S. Department of Education
HBCUs have deployed innovative approaches towards default management and reduction. Such strategies include implementation of a default management plan that engages stakeholders, identifies approaches to reducing default rates, and tracks measurable goals. These schools have increased borrower awareness of obligations through incorporating borrower topics at orientation sessions and providing enhanced entrance and exit counseling. Other best practices include borrower tracking, increased contact with delinquent borrowers, taking advantage of the cohort default rate challenge/adjustment/appeal processes, and partnering with other stakeholders to optimize default prevention, resolution, and reduction.
Only Denmark Technical College was cited for a one-year default rate above 30% for the 2016 entering cohort but appealed to be removed from sanctions according to ED public information.
According to officials, a cohort default rate is the percentage of a school’s borrowers who enter repayment on certain federal loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year.
The national student loan default rate for all colleges and universities in the 2016 cohort is 10.1 percent, a decrease of more than 1.4% for all borrower default rates from 2014 cohort data.
