Utahs average rate of student loan default is exceeding the national average.’s default rate for 2005 was 5 percent, above the national average of 4.6 percent. The state’s community colleges have the highest default rates, led by Salt Lake Community College at 6.8 percent.
Utah State University has the smallest default rate among public universities in the state at 1.7 percent in 2005, the most recent year for which statistics are available.
This data measures the rate that defaults occurred during the first year that payment was required, rather than defaults over the lifetime of a loan.
Brigham Young University has the lowest default rate in the state at 0.7 percent.
While lower than most schools, Utah State’s default rate is increasing.
In 2004, 1.4 percent of the school’s loans were defaulted. In 2003, that number was 1.5 percent.
Still, USUs director of financial aid said he was not concerned.
“We have been around 2 percent (default rate) for 10 years,” Steve Sharp said. “It’s holding steady.”
Sharp said none of Utah’s school should worry.
“This year’s jump in Utah is a statistical anomaly,” he said. “This kind of variation probably is not very meaningful.”
Sharp believes that national default rates have gone down because many people consolidated their student loans.
This allowed them to pay back more slowly.
In Utah, differences in the way defaults are counted could have resulted in the bump.
“We have to see how it (the default rate) tracks over time,” Sharp said.
that doesn’t mean students shouldn’t be careful with their money, Sharp said.
He said students should borrow as little as possible and to stay in school to get a job that pays well.
“Historically, the people who default don’t finish their education,” Sharp said. “They often default early.”
The worst approach, Sharp said, is to just decide not to pay, hoping that the charges will go away.
“The problem with defaulting is that the government doesn’t give up,” he continued. “They can garnish your wages or take it out of your tax refund. … It’s bad for your credit and you can’t get away from it.”
Information from: The Herald Journal, http://www.hjnews.com
– Associated Press
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