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OU default rate lower than national average

Even though defaults on federal college loans have jumped nationally during the past year, Ohio University has remained well below the average, as it has for several years.

The average percentage of students in default in the U.S. in fiscal year 2009 — which included students who started paying off loans in 2009 and defaulted before the end of 2010 — was 8.8 percent.

“We think there are two trends behind these default rates. … We do see a strong relationship between default rates and unemployment rates,” said James Kvaal, deputy undersecretary of Education. Last month, the national unemployment rate was 9.1 percent, according to the U.S. Bureau of Labor Statistics.  

The “National Student Loan Cohort Default Rate” is a measure of how many students have defaulted on their federal loans nationally. Federal student loans must be repaid with interest and failure to repay can result in default, according to the U.S. Federal Student Aid website.

In Ohio, the average rate of default was 8.5 percent in 2009, slightly below the national average. At OU in 2009, the default rate was 5.4 percent, a 1.5 percent increase from 2008.

“Ohio University students and alumni have historically experienced lower default rates than the average public institution rates,” said Becky Watts, chief of staff to OU President Roderick McDavis, in an email.

“This is likely attributable to a number of factors, including the employment rate of our graduates, as well as the concerted effort Ohio University has made to control tuition costs while increasing the amount of institutional aid available to students,” she added.

With 302 students in default of 5,567 with federal loans, OU has the sixth-lowest default rate among Ohio universities.

Although the most-recent national default rate is the highest in 12 years, the ratings for fiscal year 2009 are far from the all-time high, which came in 1990 at 22.4 percent.

“For students, the consequences of not managing their student loan debt can be quite severe,” Kvaal said. “The administration takes student loan affordability very seriously ... that students are able to manage their student loan obligations.”

dd195710@ohiou.edu

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