LendEDU releases second annual student loan report
As defined by the report, a federal student loan is considered default if, “payment is late by 270 days, or roughly nine months.” The report outlines the impact of a federal or private student loan. These loans will significantly impact a student’s credit score among many other severe issues.
Additional issues include “possibly leading to the garnishment of your tax refund, Social Security benefits, or wages. In the most severe instances, you may have to deal with a debt collector, lawsuit, or even the U.S. Marshals if you continually ignore the issue,” the report said. The LendEDU report is put together mainly to analyze the prevalence of student loan default.
The Brookings article outlines the key concepts presented and examined within the Department of Education cohort.
“Applying these trends to the 2004 entry cohort suggests that nearly 40 percent of borrowers may default on their student loans by 2023,” stated Judith Scott-Clayton, Associate Professor of Economics and Education and Former Brookings Expert.
The student loan default rate was 10.10% last year and has now dropped to 9.70% in 2020. The following table shows the ratings of the top 5 default rates in the nation followed by the state of Indiana’s ranking of 27th on the list.
The following note about the tables was given in the report to help understand the information:
Note: Above are the 4,398 institutions that had their respective default rates published by the Department of Education for the 2017 fiscal year.
A negative percentage in the "Change From Default Rate FY 2016" column meant the school's student loan default rate decreased (improved) by that amount from FY 2016 to FY 2017. A positive percentage meant it increased by that amount YoY.
Indiana has 79 schools within the state. Within those schools, there are 11,503 borrowers in default. The default rate at the time (2017) was 9.57% and has since dropped .91% from its 2016 rates.
Within Indiana, Indiana State University ranks 62 with a default rate of 11.90% which dropped 1.70% from its previous rates. The following table shows the ranking of select schools in Indiana.