HOBOKEN, N.J.–A new study reveals student loan default rates by school and state.
Among the key findings, according to LendEDU which published the report:
- While the national default rate was 10.10%, it was 15.66% at historically black colleges and universities, 5.35% at women’s colleges, and 9.45% at all other schools.
- For-profit schools had a collective default rate of 15.20% compared to 9.60% at public schools and 6.60% at nonprofit private schools.
- Nevada had the highest state default rate (18.16%) with the next highest being Mississippi (14.94%). Massachusetts had the lowest default rate (5.82%) with the next lowest being Vermont (6.17%).
- Southern states typically had very high default rates, while states in New England and the Midwest had the lowest, LendEDU said.
“Unfortunately, as colleges continue to raise tuition rates, and with outstanding student loan debt in the United States at an all-time high of $1.6-trillion, student loan default only figures to be a growing issue,” LendEDU noted.
LendEDU said it created the report using data from the Department of Education (ED) to detail student loan default rates for nearly 4,500 colleges throughout the U.S. In addition, it analyzed default rates on a state-by-state level.
Repayments Head South
Among some of the other findings, according to LendEDU:
- As noted above, Southern states in the U.S. had some of the highest default rates, according to the Department of Education’s default data. Mississippi’s default rate of 14.94% was the second highest in the country, behind only Nevada’s 18.16%, which was an outlier, said LendEDU.
Following closely behind Nevada and Mississippi was West Virginia (14.63% – 48th overall), Louisiana (13.50% – 46th), Alabama (13.38% – 45th), Kentucky (12.31% – 43rd), South Carolina (11.58% – 41st), Tennessee (11.57% – 40th), and Georgia (10.86% – 33rd).
- On the other end, states from both the New England and Midwest regions had some of the lowest student loan default rates. For example, Massachusetts had the lowest default rate in the country (5.82%), and was closely followed by Vermont (6.17% – 2nd) and Rhode Island (6.29% – 4th).
- For states in the Midwest, North Dakota had the third lowest default rate (6.21%), while Nebraska (7.31% — 5th), Minnesota (8.29% — 9th), and Wisconsin (9.02% — 15th) were not far behind.
Repayments Take a Hair Cut
LendEDU added one other interesting note in its analysis, and that is that barber schools lead to student loan defaults at an unusually high rate. Of the seven schools that were subject to lose Direct Loan Program and/or Federal Pell Grant eligibility due to three straight years with default rates above 30%, four were barber schools, while a fifth was a cosmetology school.
Out of the 11 schools that were subject to lose Direct Loan Program eligibility due to default rates above 40% for the 2016 fiscal year, six were barber schools, LendEDU said.
Amongst the 10 schools that had the highest default rates for the 2016 fiscal year, eight were barber schools and the ninth was a cosmetology school.
The full study can be found here.