Student loan defaults on the rise

The U.S. Department of Education released a report on Monday showing the default rate for federal student loans has increased, again.

Among students who started paying back their loans between 2008 and 2009, 8.8 percent are in default,  that’s nearly 2 percent more than the year before.

During that time the default rate for students at for-profit colleges took a big jump nationally.  It went from 11.6 percent to 15 percent.

In Minnesota the default rate is lower, but it’s on the rise as well.  Overall, the default rate went from 3.7 percent to 5.8 percent.

Here’s the breakdown from the Minnesota Office of Higher Education:

The folks over at OHE tell me the increase is likely tied to the tough economy. Students (especially those who drop out of college) are having a tough time finding work.

Students who have difficulty paying back their loans can file for a deferment if they’re unemployed or because of an economic hardship.

The National Association of Student Financial Aid Administrators offers up this info on preventing loan defaults as well.