already knew that college graduates are facing more debt now than ever before, but a new report from the U.S. Department of Education breaks down the harsh reality." /> Borrowers of federal student loans defaulting at higher rate - Metro.us

Borrowers of federal student loans defaulting at higher rate

How can students stop borrowing more than they will be able to repay?

We already knew that college graduates are facing more debt now than ever before, but a new report from the U.S. Department of Education breaks down the harsh reality.

People who borrowed using federal student loans had an 8.8 percent default rate in the 2009 fiscal year, according to the report. That’s an increase compared with 7 percent the year before.

The most significant increase was from borrowers who attended for-profit schools. They defaulted at a rate of 15 percent, up from 11.6 percent the year before:

The rates announced today represent a snapshot in time, with the FY 2009 cohort consisting of borrowers whose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. More than 3.6 million borrowers from 5,900 schools entered repayment during this window of time, and more than 320,000 defaulted. Those borrowers who defaulted after the two-year period are not counted as defaulters in this data set.

Schools that have excessive default rates could even lose eligibility for federal student aid programs. Tidewater Technical in Norfolk, Trend Barber College in Houston, Missouri School of Barbering & Hairstyling in St. Louis, Sebring Career School in Houston, and Human Resource Development & Employment – Stanley Technical Institute in Clarksburg are all subject to sanctions. These schools each had cohort rates that either exceeded 25 percent for three consecutive years, exceeded 40 percent in the latest year, or both.

“These hard economic times have made it even more difficult for student borrowers to repay their loans, and that’s why implementing education reforms and protecting the maximum Pell grant is more important than ever,” said U.S. Secretary of Education Arne Duncan.

There are some glimmers of hope, however. Some students might find respite in the form of the income-based repayment plan (IBR). Monthly loan payments are capped based on income and family size.

Officials from the U.S. Department of Education also say they are taking further steps to protect students from the risk of defaulting:

Through a series of regulations finalized over the past year, the Department has tightened loopholes to protect students from misleading or overly aggressive recruiting practices; taken action to ensure that institutions are offering high-quality programs; and established rules that require career college programs to better prepare students for gainful employment or risk losing access to federal student aid.



News
Entertainment
Sports
Lifestyle
News

Rock legend Neil Young files for divorce after…

The legendary Canadian rocker Neil Young has filed for divorce from his wife of 36 years.

Local

FDNY debuts new fire simulator for blazes at…

The New York City Fire Department christened its newest, state-of-the-art, custom-built simulator at its training academy on Randall's Island Tuesday.

Local

Bronx cop saves baby who stopped breathing

A Bronx police officer is credited with saving the life of a 2-month-old baby who stopped breathing Tuesday morning. Police Officer Johnny Castillo, 38, was…

Local

Brewer celebrates Women's Equality Day with voter pledge

Manhattan Borough President Gale Brewer celebrated Women’s Equality Day Tuesday by pledging to register at least five women voters before the Oct. 10 deadline. Brewer…

Movies

Review: The uneven 'Life of Crime' mostly gets…

Elmore Leonard's "The Switch" becomes the new indie crime dramedy "Life of Crime," with Jennifer Aniston as a kidnapped woman whose husband won't pay up.

Movies

Review: Pierce Brosnan gets a cut-rate Bond knockoff…

Pierce Brosnan tries to reclaim his glory days with the spy thriller "The November Man" but instead gets a sad DTV-style ripoff with lame action.

Music

Tiesto headlines Made in America

Electronic music legend Tiesto is ready to get in touch with his inner Rocky at the Jay Z-curated Budweiser Made in America festival this weekend…

Gossip

Ariana Grande addresses Big Sean dating rumors

Now that Ariana Grande and Big Sean were caught on camera holding hands, she has something to say.

College

When are 2014 college football playoffs? (Schedule, date,…

When and where are 2014 college football playoffs? A look at the schedule, date, TV, time for the semi-finals at championship game.

NFL

Dimitri Patterson suspended only for rest of preseason…

Dimitri Patterson ended up getting just a slap on the wrist.

Sports

Eugenie Bouchard excited for 'rowdy' fans at US…

Eugenie Bouchard is sure to endear herself to New York's tennis faithful as she tries to win her first grand slam title across the next two weeks.

MLB

MLB Power Rankings: Angels and A's still at…

MLB Power Rankings: Angels and A's still at top, Nationals climb

Parenting

Lure your baby to sleep with Maroon 5…

These new renditions of "Moves Like Jagger" and "Payphone" are Maroon 5 like you've never heard them before.

Wellbeing

Who is having the most orgasms?

  Single lesbians report having orgasms more often than heterosexual women but both gay and straight men still come out on top of the climax…

Home

Jonathan Adler shares his tips for a great…

Jonathan Adler took a break from boogie boarding at his beach house to tell us how to keep that Labor Day party festive.

Travel

Most popular Labor Day weekend destinations

Priceline.com released its Top 20 destinations for the end of summer, including Labor Day weekend. If you’re heading to any of these spots, expect a…