9/26/2023 0 Comments Student loan defaults nix![]() Southern states had some of the highest default rates, according to the Department of Education’s default data. The wider implications this will have on the economy remains to be seen, but one can reasonably assume they will be damaging.ĭefault rates Default rates by school Observations and Analysis Southern states among highest default rates, New England and Midwest States lowest In fact, the Brookings Institute estimates that 40% of borrowers may default on their student loans by 2023. Unfortunately, as colleges continue to raise tuition rates and with outstanding student loan debt in the United States at an all-time high of $1.6 trillion, student loan default only figures to be a growing issue. ![]() Marshals if you fail to address the issue. Your credit score will be severely damaged and you may have to deal with a lawsuit, a debt collector, and, in rare cases, U.S. The consequences of student loan default can be severe, like having your tax refunds, Social Security benefits, or wages garnished. Southern states typically had very high default rates, while states in New England and the Midwest had the lowest. Massachusetts had the lowest default rate (5.82%) with the next lowest being Vermont (6.17%). Nevada had the highest state default rate (18.16%) with the next highest being Mississippi (14.94%). While the national default rate was 10.10%, it was 15.66% at historically black colleges and universities, 5.35% at women’s colleges, and 9.45% at all other schools.įor-profit schools had a collective default rate of 15.20% compared to 9.60% at public schools and 6.60% at nonprofit private schools. In addition, we analyzed default rates on a state-by-state level. Department of Education to detail student loan default rates for nearly 4,500 colleges throughout the U.S. ![]() To provide a closer look at just how prevalent student loan default has become, LendEDU has created this report using data from the U.S. The standards for private student loan default vary by lender, but typically loans will be deemed in default when a payment is late by three or fourth months. If a federal student loan payment is late by 270 days, or roughly nine months, the loan is considered to be in default. Otherwise, the loans can fall into default. Which States and Schools Are Worst for Student Loan Defaults?Īs with any form of financing, student loans must be paid back according to the the agreed-upon repayment plan.
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