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DSU cohort loan default rates
stay ahead of National Average
Dakota State University students continue to remain well above the
national average when it comes to repaying their student loans. DSU has one of
the highest repayment rates of federal loans in the nation with 97.5 percent of
the students paying back their student loans. The most recent national loan
Cohort default rate, (fiscal year 1999) shows the national average at 5.6
percent, with Dakota State less than half that rate at 2.5 percent. This year
marks the 10th year that both the National and DSU’s default rate
have dropped. In Fiscal year 1990 the National default rate was 22.4 percent,
compared to DSU’s rate of 5.7 percent during the same time.
Rosie Jamison, director of financial aid at Dakota State says there are
several factors involved with the national and Dakota State’s lower default
rates.
“Since 1990 there has been a concerted effort nation-wide of schools, lenders, guarantee agencies and the Department of
Education to better inform borrowers about their loans and provide more diverse
repayment plans for students. These things combined have helped federal loan
borrowers better meet their repayment obligations,” said Jamison. “DSU has a
higher placement rate and good starting salary for graduates,
which allows our students more ability to make payments on student loans.
Borrowers plan to repay their loans and having the financial ability to do so
certainly helps.”
Other factors include the region Dakota State is located in, which
according to Jamison, has had a habitually higher repayment rate than the rest
of the nation. Also, the regional guarantee agency Education Assistance
Corporation (EAC) of Aberdeen, assists borrowers beyond what is required. This
helps more borrowers remain in good status on their loans and schools maintain a
low default rate.
Jamison says borrowers are becoming increasingly more aware of the
options available to pay back their debts. “As always, students plan to pay
back their loans,” said Jamison. “Borrowers who understand their rights and
obligations are more apt to stay in good status on their student loan repayment.
When this occurs, the federal government, DSU, and tax payers all reap the
benefits.”
The EAC and the federal government provide help to students and the
university with enhanced communication about student loans, thus helping toward
a low default rate.
The cohort default rate measures the percentage of borrowers who enter
repayment in a federal fiscal year and default on their loans before the end of
the next federal fiscal year. The national rate reflects loans to borrowers
among 6,700 schools that participate in the Family Federal Education Loan
Program and the William D. Ford Federal Direct Loan Program.
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