Why aren’t programs helping lower student-loan default rates?

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When I spoke to state Office of Education analyst Tricia Grimes on Friday about the increase in the student-loan default rate, I mentioned that Lumina Foundation’s Zakiya Smith had expressed alarm over the issue.

Smith had told the higher ed publication  Diverse that the defaulting students had begun their repayment period while the feds were trying to spread the word about programs — such as Income-Based Repayment and Pay As You Earn — designed to prevent default.

Although the law requires students to know about them, Smith said, the message isn’t being delivered clearly enough.

Grimes said she agrees with Smith.


“The students [who graduate] have to do something called ‘exit counseling.’ .. It’s usually online, but in that counseling, it does tell them some things about the repayment options. Frankly, my personal opinion is that many students just click through ‘Accept-accept-accept’ on all the screens try to get it done, without really paying attention to what it says. Because they don’t think they’re going to have trouble repaying their loans. …”

Dropouts should also receive exit counseling, she said, but the circumstances of their departure often make it difficult for college officials to give it to them.

Later, when the arrears notices start coming, she said:

“There’s this perfectly human tendency to think, ‘I can’t afford to pay my loans’ … and many just don’t answer the phone calls, don’t open the emails, don’t open the letters where people are trying to tell them about these options.”