Indiana

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Indiana Student Loan Default Rate Tops All But Two Other States

Top Five Federal Student Loan Default Rates
1. Arizona 15.96%
2. Arkansas 11.74%
3. Indiana 11.61%
4. Iowa 11.56%
5. Colorado 11.55%
SOURCE: USA Today, USDOE

It’s no secret: College is expensive. Indiana students take on a lot of debt to pay for it.

As it turns out, though, it may be more debt than they can handle.

Indiana’s 11.61 percent default rate on federal student loans is higher than the rates in all but two states — Arizona and Arkansas. That figure comes from the USA Today which, in a report published Tuesday, points a finger at for-profit colleges:

Nearly half of all federal student loan defaults occur at for-profit schools, although the schools have only 10% of higher education students, Harkin found. (A default is a loan at least nine months behind in payments.) The Government Accountability Office also issued a report this year challenging how the schools recruited students.

Bottom Five Federal Student Loan Default Rates
47. New Hampshire 5.07%
48. Massachusetts 4.79%
49. Vermont 3.65%
50. Montana 3.48%
51. North Dakota 3.39%
SOURCE: USA Today, USDOE; includes D.C.

Congress and the Department of Education have approved new rules to try to reduce student loan defaults, although the effort’s success won’t be known for several years.

So if Indiana students are taking on too much debt, just exactly how much debt are they taking on?

We took a look at the numbers back in August, and found that undergrads at Indiana colleges or universities took on an average of $30,000 in debt for each degree they earned in 2009 — a debt load $10,200 per degree higher than the national average.

At Indiana University and Purdue University, students took on a lower-than-average debt load: about $18,000 in debt for each degree.

SOURCE: Education Sector, excluding outliers (College of Court Reporting, Inc. & Crossroad Bible College). Looks at undergraduate data only.

Comments

  • Bigdigs

    These findings do not surprise me at all. I taught for a year at a for-profit college in Indiana. Virtually NONE of my students were prepared to do college level work, but their grants and LOANS made it possible for them to be in class.

    Donald R. Dignam, MBA, CPA

    • http://twitter.com/StateImpactIN StateImpact Indiana

      Hi Mr. Dignam, thanks for your comment. Can you help connect the dots here… As you experienced it with your students, how does unpreparedness + access to loans = likely default?

      (By the way, if you feel comfortable, was it a brick-and-mortar for-profit or an online university?)

    • http://twitter.com/StateImpactIN StateImpact Indiana

      …or would you like to share off-blog? kdstokes@indiana.edu

  • Anonymous

    According to the Federal Reserve Bank of New York, Americans now owe more on student loans than on credit cards. http://bit.ly/njoZGS

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