The Forgotten Faces of Student Loan Default

By Colleen Campbell

The U.S. Department of Education recently released new data on student loan default rates and is touting a success story: The national default rate is 10.8 percent, down from 11.3 percent last year. But this decline doesn’t mean that students are no longer struggling to repay their loans or suffering the consequences of default. Though data on federal loans is notably poor, over the past three years, researchers have identified certain groups of students who face particularly high risks of default on their federal student loans. The Center for American Progress (CAP) and others have found that African American borrowers, students who are parents, and low-income students have higher-than-average default rates, in some cases topping 50 percent. This article highlights five additional groups of students that debt disproportionately burdens and typical analyses neglect » These students are an important part of the American postsecondary education system, yet they are too often underserved by it. But there are steps that can be taken to improve the situation. First, the Department of Education must make additional information available so that researchers and policymakers can better understand the outcomes of vulnerable students and appropriately target reform efforts. Policymakers should also follow the recommendations outlined in CAP’s “Beyond Tuition” report, thus ensuring that institutions are held accountable for closing equity gaps; states provide equitable funding for postsecondary institutions; and students can access programs that reduce the burden of high monthly student loan payments.