Results mirror national increase in number of students paying back financial aid debt.
Results mirror national increase in number of students paying back financial aid debt.
The US Department of Education last week announced that the national student loan default rate has decreased to 11.3 percent, a .05 decrease from the previous year’s marks and the second consecutive year of increases in the number of students making payments on federal loans.
Federal officials lauded changes to the Pell Grant federal aid program and more flexible repayment options, but also credited historically black colleges and universities for being among the nation’s most active institutions in reducing their institutional default rates.
All of the nation’s 101 eligible HBCUs are below the 30 percent threshold for the total percentage of students in an annual cohort to have failed in making regular payments. From a departmental release:
“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.”
Officials from the United Negro College Fund praised the work of their member institutions, with more than 60 percent of member institutions included within the government’s list of schools to have successfully encouraged repayment from students and graduates in the FY 2013 cohort.
“UNCF-member institutions have devoted tremendous time, resources and effort to reduce student loan defaults, all while using scarce funds to do their part, and these efforts are paying off,” said Dr. Michael L. Lomax, UNCF president and CEO. “Now, federal policymakers must step up to the plate to provide debt relief and better student loan services to the 80 percent of HBCU students who must borrow to get to and through college.”
The federal government classifies loan default as a borrower who has failed to make at least one scheduled monthly payment for nine months.
