Missouri student loan default rate rises
Wed, 16 Sep 2009 19:16:29 GMT —
A new report shows that the recession has more Missouri students defaulting on their students loans.
The Missouri Department of Higher Education said the default rate has jumped to about six percent, up from just over four percent last year.
However, Missouri is still below the national average.
Across the country, the default rate rose from about five percent to nearly seven percent.
"Its definitely what we would typically see, especially in a recession like this that's characterized by high unemployment," Missouri Department of Higher Education Deputy Commissioner Paul Wagner said. "That obviously has a direct link to people's ability to repay their student loans."
The default rate is still better than it was nearly 20 years ago, when over 20 percent of borrowers were not repaying their student loans.
Wagner points out that the vast majority, nearly 76,000, of Missouri's borrowers today are repaying their student loans on time.
Wagner said higher education officials expect the default to stay the same or increase more next year as economists predict the unemployment rate will remain high through 2010.