Published November 2012. Financial aid and student loan rules change often, so some details may be out of date. Ask us about your situation.
Before applying to a school, prospective students and their parents should first look into what post-grad life is like for those who have been out of the higher education system for at least a couple of years.
This is why every September the U.S. Department of Education (DOE) releases the Federal Student Loan Cohort Default Rates study of individuals who had graduated from college both two and three years prior. The report essentially paints a picture of how many post-grads have been able to get jobs that pay well enough to support their loan burden immediately after college.
The two-year analysis takes a fresh look at post-grads while the three-year report follows up on figures from the study conducted 12 months earlier to see if the job prospects and financial outlook for these graduates had improved.
In the 2012 report, students who had graduated in 2009 and 2010 saw greater rates of default in the short span following graduation than students who were monitored in the 2011 report. The two-year rate rose to 9.1 percent compared to the 8.8 percent seen in last year's study.
This year's report found that the 8.8 percent of borrowers who had reported defaulting since 2008 in the previous two-year analysis had ballooned to 13.4 percent in the 2012 three-year study.
According to the research, the default rates were led by graduates who had attended for-profit institutions that on average leave students with larger debt burdens than those who attended public and nonprofit schools.
A good example is Alaska, whose public university system takes the top five spots on the list of lowest three-year default rate. On the flip-side, for-profit schools, like the Centro de Estudios Multidisciplinarios, in San Juan, Puerto Rico, and Tidewater Tech, in Norfolk, Virginia, face potential closure from the DOE for having exceedingly poor default rates year after year.
To learn more about the best student loan repayment options borrowers should take advantage of the knowledge and expertise of the financial aid consultants at College Financing Group.