Borrowers are defaulting on student loans at an increasing rate, according to new study
On an average, 1 in 10 borrowers will default on their student loan payments and in the past three years, the percentage of borrowers that defaulted on loan payments rose by 13.4 percent. The money being offered via federal grants and loans has also increased about one third to more than $37 million.
As family incomes decrease and tuition for schools steadily increases, the possibility of debt continues to be a major concern for a majority of Americans. The rate of students defaulting on federal loan payments rose by 9.4 percent, the highest since 2000. The Department of Education showed a new report which the New York Times tweeted about:
Report Shows More Borrows Defaulting on Student Loans nyti.ms/QxNMuY
— NYT National News (@NYTNational) September 29, 2012
In the report, Education Secretary Arne Duncan, as reported by The New York Times, shows concern by saying, “We continue to be concerned about default rates and want to ensure that all borrowers have the tools to manage their debt. In addition to helping borrowers, we will also hold schools accountable for ensuring their students are not saddled with unmanageable student loan debt.”
Congress is working on a easier process for students not to default on loan payments, by decreasing the amount of pay based on their annual income. In addition, according to Newsday, Patricia Nash Christel, a spokeswoman, recently said, “Congress has encouraged schools to reduce default rates, and we help them achieve that goal.”
Both the president and Congress are working together to provide better cooperation between school and student loan payments and helping students not default on payments.