College Loan Defaults Hit 18-Year High

Photo Credit: AFP

Photo Credit: AFP

The moribund U.S. economy and the bleak jobs picture have collided to produce the highest college loan default rate in 18 years, according to data released Monday by the Department of Education.

“Some colleges are simply masking default problems until the federal government stops watching,” said The Institute for College Access and Success vice president Pauline Abernathy. “These kinds of deceptive tactics protect colleges while putting students and taxpayers at even greater risk after the school is off the hook.”

Student loan default rates have risen for the sixth year; 14.7 percent of federal student loan cohorts had defaulted on their loans within three years. The year prior, the three-year default rate was 13.4 percent. Between October 1, 2010 and September 30, 2011, more than 475,000 college students—an average 10 percent—defaulted on their loans.

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