About 320,000 student borrowed who started to repay their loans in 2009 were in default by the end of 2010, according to the latest figures from the Department of Education.
The department said that 8.8 percent of borrowers who started repaying loans in 2009 were in default by the end of last year. In comparison, 7 percent of students who started repaying in 2008 were in default by the end of 2009.
Debbie Cochrane, program director at the Institute for College Access and Success, says the problem is more severe than these figures suggest.
“Research indicates that most student loan borrowers who default do so after the two-year window is over,” Cochrane says in a statement.
Default rates are highest at for-profit colleges, Cochrane’s group says. Fifteen percent of borrowers from for-profit schools were in default after the two years ended in 2010, compared with 7.2 percent at public colleges. And more than half of the increase of the latest defaults came form students attending for-profit schools.
Don’t just blame the economy, Cochrane says. Students at for-profit schools borrow more often than others. For instance, 92 percent of students at for-profits schools borrow, compared with 27 percent at public colleges.