Arizona Student Loan Default Rate Highest In Nation

While more students are graduating college than ever before at the country’s colleges and universities, for far too many students, the nation’s higher education system isn’t delivering what they need and deserve, that is according to a report from the U.S. Department of Education. Primarily, students are not “graduating in a timely way with a meaningful degree that sets them up for future success,” according to the report.

Nearly half of all students who begin college do not graduate within six years, and the consequences of taking on debt but never receiving a meaningful degree can be severe. Students who borrow for college but never graduate are three times more likely to default. A stronger focus on outcomes for students means change for everyone – schools, students, states, accreditors, and the federal government asserts the report.

The report revealed that Arizona had the highest student loan default rate in the country, with 18 percent of Arizona students defaulting compared to the national average of 11 percent.

On the plus side, Arizona State University awards about 60 percent more degrees today than it did a decade ago, and has doubled its number of African-American and Hispanic students during the same time period.

Findings:

College graduates with a bachelor’s degree typically earn 66 percent more than those with only a high school diploma; and are also far less likely to face unemployment.[1]

Over the course of a lifetime, the average worker with a bachelor’s degree will earn approximately $1 million more than a worker without a postsecondary education.[2]

By 2020, an estimated two-thirds of job openings will require postsecondary education or training.[3]

Even as a college degree or other postsecondary credential or certificate has never been more important, it has also never been more expensive. Colleges have not focused on keeping costs down, and tuition has spiraled out of control. Meanwhile, states have slashed their investments in higher education, and Congress has failed to protect the purchasing power of Pell Grants over the decades. Consequently, college costs for hardworking students and families have grown dramatically, with wages failing to keep up.

Over the past three decades, tuition at four-year colleges has more than doubled, even after adjusting for inflation.[4]

Between 1992 and 2012, the average amount owed by a typical student loan borrower who graduated with a bachelor’s degree more than doubled to a total of nearly $27,000.[5]

Even after historic investments by the Obama Administration, the maximum Pell Grant in 2015 covers only about 30 percent of the cost of a four-year public college education – the lowest proportion in history and less than half of what it covered in 1980.[6] Despite that fact, Congressional Republicans have proposed to cut the real purchasing power of Pell Grants even further.

Students’ ability to repay their loans depends more strongly on whether they graduate than how much total debt they take on.[7]

Students who take out college loans but don’t graduate are three times more likely to default than borrowers who complete.[8]

The median debt of borrowers who default is under $8,900, which is barely half of the median debt load for all students, and the average debt for students in default is $14,500, which is half the average debt of those who graduate.[9]

States with the highest default rates for their four-year colleges tend to be near the bottom on completion rate too; and states with the lowest default rates tend to rank higher in four-year completion rates. [See Appendix for state-by-state data].

  • More than 40 percent of first-time full-time students who enroll in a bachelor’s degree program don’t graduate within 6 years.[10]
  • Low-income students, first-generation college students, and minority students, in particular, are being underserved by the current system. Just 9 percent of students from the lowest income quartile graduate with a bachelor’s degree by age 24, compared to 77 percent for the top income quartile.[11]
  • Students from low-income families are also less likely to enroll in and complete college than their peers, even when academic ability is taken into consideration.[12]

 

Innovative programs are lighting the path toward the future of higher education – one that allows all types of students to pick the environment and learning style that is best for them. Not everyone’s college experience will look the same, but they must all have one thing in common: an unyielding commitment to student success and outcomes.

APPENDIX: Graduation Rates and Cohort Default Rates, by State and Sector, among Students Attending Four-Year Institutions

graduation-rates-and-cohort-default-rates.jpg

 

 

Graduation Rate

Cohort Default Rate

State

All

Public

Private

For-profit

All

Public

Private

For-profit

AK

29%

27%

39%

35%

13%

12%

8%

16%

AL

48%

49%

44%

46%

13%

11%

12%

21%

AR

42%

39%

53%

18%

14%

15%

10%

AZ

29%

57%

52%

23%

18%

9%

5%

19%

CA

64%

64%

73%

44%

9%

6%

4%

15%

CO

50%

54%

62%

24%

12%

7%

3%

19%

CT

67%

63%

73%

29%

6%

6%

5%

14%

DC

73%

16%

76%

16%

11%

19%

4%

15%

DE

66%

73%

30%

8%

7%

10%

FL

51%

50%

55%

51%

14%

13%

9%

20%

GA

45%

44%

58%

16%

13%

11%

9%

23%

HI

44%

47%

41%

22%

8%

9%

6%

IA

63%

68%

62%

29%

15%

5%

6%

20%

ID

45%

41%

56%

23%

10%

12%

3%

IL

60%

62%

63%

31%

12%

7%

6%

19%

IN

57%

53%

68%

38%

15%

10%

6%

22%

KS

53%

54%

49%

31%

9%

8%

9%

19%

KY

48%

47%

50%

38%

13%

11%

10%

22%

LA

46%

45%

60%

18%

9%

9%

8%

MA

69%

58%

75%

30%

6%

8%

5%

13%

MD

65%

63%

73%

31%

8%

9%

4%

ME

54%

46%

68%

18%

9%

11%

6%

MI

55%

60%

42%

26%

10%

8%

12%

MN

62%

59%

71%

39%

10%

5%

5%

13%

MO

57%

55%

61%

51%

10%

10%

8%

21%

MS

49%

50%

48%

11%

11%

9%

MT

48%

47%

52%

10%

10%

5%

NC

60%

61%

59%

44%

9%

9%

11%

20%

ND

48%

49%

40%

33%

5%

5%

7%

NE

57%

56%

62%

41%

5%

5%

4%

4%

NH

65%

69%

68%

35%

7%

4%

6%

16%

NJ

65%

67%

64%

30%

10%

6%

5%

24%

NM

40%

41%

42%

31%

17%

17%

9%

10%

NV

37%

37%

55%

29%

11%

11%

4%

NY

60%

53%

67%

43%

7%

7%

5%

18%

OH

55%

53%

64%

42%

11%

13%

8%

14%

OK

45%

43%

51%

45%

13%

13%

10%

19%

OR

58%

56%

68%

47%

6%

6%

4%

15%

PA

65%

62%

71%

35%

8%

8%

5%

23%

RI

67%

58%

72%

7%

7%

6%

SC

57%

61%

49%

51%

10%

8%

14%

1%

SD

49%

49%

53%

22%

11%

6%

7%

21%

TN

51%

48%

59%

31%

11%

11%

8%

20%

TX

51%

50%

59%

27%

10%

10%

9%

20%

UT

51%

44%

67%

49%

10%

8%

4%

24%

VA

64%

70%

56%

31%

8%

5%

8%

14%

VT

64%

64%

64%

49%

6%

7%

6%

17%

WA

63%

62%

71%

33%

7%

7%

4%

20%

WI

58%

57%

63%

30%

6%

5%

5%

17%

WV

45%

44%

51%

14%

14%

15%

11%

15%

WY

54%

54%

48%

5%

5%

All

55%

55%

64%

32%

11%

9%

7%

19%

 

DEFINITIONS:
STATE: The state in which the institution is reported to be located, including for distance and online education schools.
COHORT DEFAULT RATE: The three-year cohort default rates (CDRs) represent a snapshot in time.  The FY 2011 rates were calculated using the cohort of borrowers who entered repayment on their federal student loans between October 1, 2010 and September 30, 2011 and who defaulted before September 30, 2013. Source: Office of Federal Student Aid
COMPLETION RATE: The 2013 graduation rate is based on the number of students who entered the institution as full-time, first-time, degree-/certificate-seeking undergraduate students in a particular year, and who graduated within 150 percent of normal time to completion (meaning within six years for a four-year degree). Source: IPEDS

5 Comments

  1. These defaulters should be turned over to collections just like any other person who does not pay for what they take.

  2. As a father who is paying loans that my kids took out because they cannot afford to pay them I urge anyone considering a government school loan to do a serious cost analysis first. Specificially if your kids plan to stay and work in Tucson. $27,000? I wish! Additional money is given or tacked on as they go through school for who knows why. Good luck finding out. Like our public schools kids are flushed through as fast as they can hand out diplomas to get more students in and pile up the money. The fees are way out of proportion for what you receive. I’m not putting blame on anyone else. I’m just warning ‘buyer beware’. If your kids are 18 they can get these loans on their own and you may end up owning the loans or watching your kids lousy paychecks get garnished. That or they come back home, and that ain’t happening!

    • If you didn’t cosign for the loan, there’s no way the bank can come after you. If by saying “you end up owning the loans” you mean helping your kids out so they can live, I’m already expecting it. My wife and I pay for four years of school. If they change their major and need to go longer, that’s on them. One the smartest things a young college student can do is go to a junior college their first two years and live at home. My youngest daughter did that and we paid it out of pocket, no loans. We’ll pay off the loans for her last two years. Won’t be nearly as expensive as sending her all four years to UA. We’ll do the same with our last kid in a couple years. PCC has programs with UA for specific degree tracks so that all the credits transfer.

      Tuition rates are out of control. For us, we’d rather suck it up for our kids so they can have a better start in life than we did.

      • You’re correct Mike. We are helping our kids because garnishment is a bad deal and as long as we can help there ain’t gonna be no welfare. Sounds like we’re both blessed that we can help our kids and ourselves to keep our empty nest. My youngest is married, working and following the PCC route as well. For our others hind site is 20-20.

  3. It is time to give these “Parasites” 2 choice’s. Re-pay the loans or go to prison for FRAUD and THEFT of government funds.

Comments are closed.