While more college graduates are defaulting on their student loans, the number of Southwestern University graduates who are defaulting on such loans is actually going down.

A recent report based on data from the government’s National Student Loan Data System found that the number of college graduates who are defaulting on their student loans has been increasing steadily since 2003. The government calls this the “Cohort Default Rate” (CDR). The CDR tracks repayment of Stafford Loans, which are federal loans available to almost all college students. No payments are required on the loans while students are in school at least half-time. Payments begin six months after a student graduates, leaves school, or drops below half-time enrollment.

The report found that the overall national cohort default rate is 7 percent. Students graduating from for-profit colleges had the highest default rate (11.6 percent), while the rate for public colleges is 6 percent, and the rate for private colleges is 4 percent, up from 3.7 percent the previous year.

Southwestern’s Cohort Default Rate decreased from 2.2 percent last year to 1.4 percent this year.

“This speaks well about the ability of our graduates to keep their loans in good standing either because they have gotten jobs that enable them to make payments or they have continued on to graduate or professional school,” said James Gaeta, director of financial assistance. “This is especially good news given the state of our economy.”  

Gaeta said the recent report should give comfort to families concerned about whether they should take out loans to finance their children’s college education. “Borrowing is not necessarily a bad thing,” he said.


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