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
Local

Preachers rail at NYPD at Eric Garner's funeral

Preacher after preacher stepped up to the pulpit at a sweltering Brooklyn church on Wednesday to express fury at the city's police force during the funeral of Eric Garner, who…

Local

Newark schools probed after claims of race discrimination

The U.S. Department of Education said on Wednesday it was investigating complaints that a plan to reorganize public schools in Newark, New Jersey, discriminates against black students.

National

Dogs are capable of feeling jealousy - U.S.…

By Curtis Skinner(Reuters) - Dogs are a man's best friend, and research released on Wednesday says canines want to keep it that way.Dogs are capable…

Local

G train riders brace for five-week shutdown

G train service will be suspended between Brooklyn and Queens between Friday, July 25, and Tuesday, Sept. 2.

Going Out

Where to go drinking on National Tequila Day…

Thursday is just close enough to the end of the week to make you envision yourself already sunning on a beach towel or lounging by…

Going Out

Things to do in NYC this week: July…

Performing arts A 70’s Summer Night Friday, 6:30 p.m. The Green Building 452 Union St., Gowanus $35, 347-529-6473 Party like it’s summer in the 1970s…

Going Out

5 must-try dishes at Edible Manhattan's Good Beer

Rooting out the exotic amid the New York City bar scene is noble quest. But if you’d like to have it all come to you,…

Books

Art imitates life (almost) in David Shapiro's new…

David Shapiro talks about his book, "You're Not Much Use To Anyone."

NFL

Jerry Reese confident with Giants, skipping countdown clocks…

Last year, Giants GM Jerry Reese installed a countdown clock in the locker room to inspire Big Blue to play in their own stadium for Super Bowl XLVIII.

MLB

Brandon McCarthy finds his calling on Twitter

Yankees starter Brandon McCarthy joined Twitter three year ago for the same reason many people do: to get news quickly.

Sports

NBA great LeBron James sends 800 cupcake apologies…

By Kim PalmerCLEVELAND (Reuters) - NBA star LeBron James, whose recent return to the Cleveland Cavaliers in his home state of Ohio sparked a frenzy…

NFL

Fantasy football: Johnny Manziel could give your running…

Fantasy football: Johnny Manziel could give your running game a boost

Food

Recharge with a post-workout smoothie from Nicky Hilton

Some people can roll out of bed right as their alarm goes off. And that alarm isn’t set for 20 minutes before they have to…

Education

Colleges are increasingly embracing the concept of gender-neutral…

  Northwestern University recently made headlines after announcing that it would be installing two gender-neutral bathrooms in the university's student center. “These are two gender-open…

Career

How to prepare to interview for your dream…

    Congratulations! You landed a job interview at your dream company! A lot of hard work has gone into determining which companies to apply…

Style

The shirtdress is a summer must-have

  We love throwing on our boyfriend’s shirt and a pair of jeans (no matter how much he grumbles that it’s his turn to wear the…